Presentation on Landscape of

Automobile Industry in India

Consulting Club
 Evolution of Automobile Industry
Initial Years
Early to mid 90s
Manufacturing was licensed
•Seller’s market and long
•High Customs duty on import Mid 90s – Early 2000s
waiting periods
•Steep excise duties & •Buyers market
•Delicensing in 1993
•sales tax
•Increase in Indigenization
•Removal of capacity
•2 Major players:
restrictions
Premier Automobiles Ltd •Easy Auto finance
& Hindustan Motors
•Decrease in customs &
•Manufactures diversifying
excise
1980s into related activities:
finance lease, fleet
•Auto finance boom- more
•Entry of MUL, better product, management, insurance
players (foreign banks &
with government support and used car market
non banking companies,
better schemes.
•Seller’s Market

•Long Waiting Periods

 AUTOMOBILE

PASSENGER COMMERCIAL
2 WHEELER 3 WHEELER
VEHICLE VEHICLE

I.C.V. M.C.V. H.C.V.

MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS

 Trends in the automobile sector…
Production of automobiles
Domestic Sales of automobiles

10 CAGR 15.4% CAGR 14.2%

8.5
10
million numbers

8 7.2 7.9

million numbers
6.3 8 6.8
5.9
6 5.3 6 5.2
4.8 4.6
4
4
2
2 0
2000-01 2001-02 2002-03 2003-04 2004-05
0
2000-01 2001-02 2002-03 2003-04 2004-05
Exports of automobiles

•Domestic Sales have been growing strongly 0.7 0.63

0.6
CAGR 39%
• Exports have nearly tripled in the last 5 years

million numbers
0.48
0.5
•Largest three wheeler market in the world 0.4 0.31
0.3
0.18
•4th largest passenger vehicle in Asia 0.2
0.17

0.1
•4th largest tractor in the market 0
•5th largest commercial vehicle market in the world 2000-01 2001-02 2002-03 2003-04 2004-05
 Segment wise market share…
Three 3.9% CVs
4.03%
Growth Rates of different segments
Wheeler 13.44%

23.5
25
20

4 year CAGR
Passenger 15 11.3
14.3 14 14.2

vehicles 10
5
0
Commercial Passenger Two Three total
Two Wheeler Vehicles Vehicles wheelers wheelers Automobiles
78.63% Segments

•The industry has not experienced much change in its structure over the last 6 years
•Two- wheelers form the major share of domestic sales
•Passenger vehicles lead the exports market(57.4%)
•2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles
•The growth in the two wheeler market is driven by the motorcycle market and is
expected to grow at 14-15 % YOY
 The Key Players…

Two wheeler Passenger vehicle

Commercial TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force
vehicles motors, Eicher Motors

Passenger TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra &
vehicle Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler Bajaj Auto, Piaggio India

 KEY ENABLERS KEY CHALLENGES

• Favorable Demographics •Cost Pressure

• Improving income curve •High Expectations
• Reducing interest rates •Inadequate Infrastructure Development

Key Focus Areas

• Product development( includes collaboration, new products developed)
• Vendor base (quality of vendors, skill levels , size etc.)
• Manufacturing capability( quality levels, productivity & skill levels, technology )
• Service levels
• Supply chain
• Labor law
• Leverage IT

Key Features of Future Auto Policy

• Foreign Direct Investment
• Import tariff
• Incentives for Research and Development (R&D)
• Environmental Aspects
• Other measures
THANK YOU