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Automobiles & Auto Components : Global Scenario
Automobiles & Auto Components : Indian Scenario
Automobiles & Auto Components : Tamil Nadu Scenario
Government Support
Investment Opportunities
CONTENTS
Global Automobile Industry
61.7 77.5 79.8 84.2 87.3
105
2009 2010 2011 2012 2013 2020
Global Vehicle Production in million units
16.5
32.8
11.6 9.6 8.6 11.0
6.0 5.7 3.8 4.5 1.7 1.6
2008 2013
Top Contributors to the Automobile Production (in Million Units)
BRIC
Japan
USA
Germany
South Korea
UK
Source: OICA, IHS automotive
Global auto industry is a key sector of the economy for every major country in the world. Total of 87.3 million automobiles (cars & commercial Vehicles)were produced in 2013 (3.7 Increase over 2012). Target of 105 Million automobiles (cars & commercial vehicles)for 2020 BRIC nations will play a key anchor for Global automobile Industry in the Future.
7% Contribution
to GDP
2nd in global two wheeler Production
1st in Tractor & 3 Wheeler Production
8th in commercial
Vehicle Production
6th in Passenger
Cars production
Industry providing direct and
indirect employment to 19 Million
Industry has output of $ 63 Billion
RS. 20,000 Crores of
investment is planned as per 12th Five
Year Plan Well
Established auto clusters
in North, South, West
Regions
Auto mobile Industry – Indian Scenario Automobile Industry is poised to become one of the Sunshine sectors in India
1.78 1.84 2.36 2.98 3.15 3.23 3.11 0.55 0.42 0.57 0.76 0.93 0.83 0.71 0.50 0.50 0.62
0.80 0.88
0.84 0.83
8.03 8.42
10.51
13.35 15.43 15.72
16.90 10.85 11.17
14.06
17.89 20.38 20.63 21.55
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Production of automobiles (in Million Units)
Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
Category Major Players Contribution to total Production
Passenger Vehicles Maruti, Hyundai, Mahindra, Nissan Renault, Tata
~80%
Two wheelers Bajaj, Hero, Honda, TVS, Royal Enfield
~90%
Commercial Vehicles Tata, Mahindra, Ashok Leyland, Eicher
~90%
Three Wheelers Piaggio, Mahindra, Bajaj ~90%
14% 3%
4%
78%
Market Share of Different categories of Vehicles (FY14)
Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers
Indian Automobile Manufacturing is dominated by Two Wheeler production (78%) followed by Passenger Vehicles (14%) Production of automobiles has doubled in last 6 years following a CAGR of 12%
Overview of Indian Automobile Manufacturing Industry
1.55 1.55 1.95 2.50 2.62 2.69 2.52 0.49 0.38 0.53 0.68 0.81 0.79 0.63 0.36 0.35 0.44
0.53 0.51 0.54 0.48 7.25 7.44
9.37
11.77 13.44 13.80 14.81 9.65 9.72
12.30
15.48
17.38 17.82 18.44
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Domestic Sales of Automobiles (in Million Units)
Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
0.22 0.34 0.45 0.44 0.51 0.55 0.59 0.06 0.04 0.05 0.07 0.09 0.08 0.08 0.14
0.15 0.17
0.27 0.36 0.30 0.35
0.82 1.00
1.14
1.53
1.95 1.96 2.09
1.24
1.53 1.80
2.32
2.91 2.90 3.11
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Export of Automobiles (in Million Units)
Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
Domestic sales of automobiles in India dominate total Production contributing to more than ~80% Domestic sales have followed a growth trajectory with a CAGR of 11% (2007-2014)
Exports have grown consistently with a CAGR of 12% over last 7 years Major Export Market comprise of USA, Europe, UK, UAE, Africa & Eastern countries.
Domestic Sales and Exports of automobiles in India
Domestic sales constitute more than 80% of automobile Production in India Vehicular penetration is very low in India as compared to other countries Like Germany , USA This gives an Edge to India to emerge as a top market in the future. Global OEM’s can establish their Export Hubs as well as cater to the under-penetrated domestic market in India.
India
GDP/Capita $ 1,499
Income/Capita $1,476
Car/1000 People 15
Two Wheeler/1000 People
96
Total Motor Vehicle/1000 People
132
Highly Under penetrated
Market
India’s Domestic Market Overview and Projections
1.78 3.11 9.7
0.55 0.71
3.3
0.5 0.83
1.7
8.03
16.9
31.8
10.86
21.55
46.5
2007-08 2013-14 2020-21*
Automobile Production in India (In Million Units)
Passenger Vehicles Commercial Vehicles Three Wheeler Two Wheeler
4 x
Production of Automobiles is targeted to become 4 times since 2007-08 to reach 46 Million units in 2020 Two wheelers will dominate the production by contributing ~75% followed by Passenger vehicles around ~20 % India is poised to be in top 5 Passenger car Manufacturers by 2020 and retain its 2nd position in the global two wheeler market. * 2020-21 data is based on estimates from Vision 2020 document by ACMA
India Automobile Industry : Target 2020
31%
19% 12%
12%
10%
9% 7%
Segment wise production of auto component s in India
Engine parts
Drive Transmission &Steering partsBody & Chassis
Suspension & BrakingpartsEquipments
Electrical Parts
Others
72%
17%
11%
Market segmentation for consumption
OEM
AfterMarket
Majority of the auto component exports are made to global OEMs and Tier 1 Companies
India auto component market had an annual turnover of $35.1 Billion in FY14.
There are over more than 6000 players in the market.
The automotive component industry caters to three broad categories of the market,
Original equipment manufacturers (OEM) or vehicle manufacturers comprise
Replacement market
Export market that comprises primarily of international tier-I suppliers
Two wheelers segment is the largest domestic customer segment for the Indian auto components industry.
Global OEM’s procuring from India
Global Tier 1 component manufacturers procuring from India
BMW Bosch
Caterpillar Delphi
Ford Magna
Nissan Valeo
Renault Cummins
FIAT Denso
GM Kolbenschmidt
Mercedes Benz TRW
Toyota DANA
Volkswagen Meritor
Auto Component Industry-Market overview
Auto components Industry grew at a CAGR of 14% (2008-2014) despite the downturn Exports have shown a rising trend as a % contribution to the annual turnover
14% 16%
21%
24%
29%
2009-10 2010-11 2011-12 2012-13 2013-14
Auto Component Industry Exports as a % of Annual Turnover
35.1 66
115 10
12
30
12.8
19
35
2013-14 2015-16 2020-21
ACMA Targets for 2020 in USD Billion
Production Exports Imports
India's component industry has achieved the capability to manufacture the entire range of auto components, such as engine components, drive and transmission components, suspension and braking components, electrical components, and body and chassis components. Engine components make up nearly a third of all exports of auto components from India.
Auto Component Industry in India
Chennai Cluster
Centre and state Govt. played a crucial role in development of the cluster. The PMP introduced by Centre and State government established many industrial estates to promote small firms and ancillary units, many producing auto components. Well developed Infrastructure like power, airports and vicinity of seaports led to the development of the automobile hub During the early 2000s, state government had also steadily accumulated land bank through state industrial promotional agencies over the years. Further presence of abundant cheap skilled work force attracted many players to this cluster Moreover, the State government gives a number of financial incentives like capital subsidies, power tariff concessions, sales tax waiver and other schemes to firms located at the industrial estates created by the State government Emergence of IT industry has also helped rapid development of the internet infrastructure which helped small and medium ancillary firms to globalize and take advantage of B2B commerce.
Automobile Industry in Tamil Nadu Chennai Automotive Cluster: Historical Overview
1950-70 1991 1995-99 2007 1980-90 2010 2014 2015
Several auto component and OEMs like TVS, Standard Motors, Ahsok Leyalnd,
Amalgamations, Simpsons . MRF etc established in
Chennai
Ford established plants in Tamil Nadu. Other Automobile giants like Hyundai also establish unit
State Govt. Introduced several policies to attract more global players including Ultra
Mega Integrated Automobile Projects
Policy relaxation & de- licenscing helped
FDI inflow in the sector
State Govt. Was instrumental in giving licenses to these firms
Hyundai becomes the largest exporter in India through Chennai port
BMW Starts production
Auto component majors like Sundaram, Lucas , Kokusan denki, etc were established
Nissan established its plant in Oragadam
Ancillary industry flourished with access to foreign technology like Japan, Germany, U.S etc.
Automobile & auto Component Policy
Released
Nissan & Ford sign Long Term Contract
with Ennore Port
Players like Yamaha and Michelin Tyres set up their plants
3.55
5.8 2.25
Existing Upcoming Total
Manufacturing Capacity in Tamil Nadu (in Million units)
Tamil Nadu aims to reach 5.8 Million Units production by 2020
Chennai – One of India’s largest auto hub .
21% of India’s automobile exports
Export Hub of Passenger Vehicles accounting for 70% of
India’s overall exports
20% of India’s total installed capacity of Vehicle
production
Production Share
Domestic sales Share
Exports Share
15.80%
14.90%
21.20%
Tamil Nadu’s Share in Overall Indian Automobile Sector FY14
Automobile Manufacturing in Tamil Nadu Current Scenario
20.0
63.5
13.7
11.0
18.8
Tamil Nadu Maharashtra Haryana Others All India
14.31%
11.36%
10.80%
8.51% 5.71%
49.31%
Construction andInfrastructureDevelopmentAutomobile Industry
Computer Software &Hardware
Services Sector
Drugs &Pharmaceuticals
Others
Automobiles
19.66
Coke & RPP
10.07
Metals 9.68
Textiles 8.14
Food Products
7.7
Machinery &
equipments 6.02
Fab Metal Products
5.59
Others 33.14
20 %
Contribution to the total Industrial Output of TN
1st
Tamil Nadu is the largest contributor to the automobile
sector in India in terms of Industrial Output
2nd
Cumulative FDI inflow among various sectors from 2000-
2012 in Tamil Nadu
Share of Major Industries in terms of Total Output in Tamil Nadu (2011-12)
State wise Industrial Ouput to the Automobile sector (USD Billion) 2011-12
Sectorwise Contribution to Cumulative FDI inflows From 2000-2012 in Tamil Nadu
Automobile Sector: Industrial Output and Investments
Over 80 automobile components manufacturers in Tamil Nadu, accounting for a turnover of over USD 1.3 billion as in 2013-14
Industry highly concentrated in manufacturing of body and structural parts
Over 15% growth of investments (both domestic and foreign) in the sector from 2004 to 2013
State accounts for over 7% of total auto components output
Tamil Nadu is the largest Tyre manufacturers in India. The State contributes to 40% to India’s total Tyre manufacturing output. Major Manufacturers
35%
17% 13%
9%
13%
13%
Segment wise production of auto component s in Tamil Nadu
Body and structural
Engine & exhaust
Electronics and electrical
Interior
Suspension and braking
Drive transmission andsteering
West, 201
North, 269
South, 139
East, 201
Automobile component manufacturers in TN - 83
Incremental capacity addition of over 2 million vehicles necessitating additional investment in automobile components sector
Locational advantages facilitating export potential to major global manufacturers
Presence of robust domestic customer base (over 3 million vehicles rolled out of the state each year)
Auto Components Industry in Tamil Nadu
Automobile OEM’s (4/3/2
Wheelers)
Raw material Suppliers Electronics
& Fuel Injection
Sheet metal
components
Suspension/Compon
ent Producers
Machine Compone
nts
Engine Compone
nts manufactu
rer
Drive Line (Transmission,Axles,Brak
es)
Credit & Financing
Logistics
Dealers & distributor
s (300+)
Insurance Companie
s
Mid
ha
ni,
Sw
ara
j, N
elca
st,
Pa
ul
Government: Central Ministries (Heavy Industries,
Petroleum, Environment)
State Ministries (SME’S, Industries)
Institutional Collaboration:
(NATRiP, ARAI, SIAM, ACMA)
Academics & Education: (PSG
Engineering, Madurai, IIT
Madras, Guindy ITI, Trichy)
Automotive industry : Ecosystem in Tamil Nadu
Global Automotive Research Centre (GARC)- Chennai by NATRiP
NATRiP is one the largest R&D infrastructure in the country for the automotive sector. GARC is one the seven test centres of NATRiP which is present in Chennai.
GARC is situated in the SIPCOT industrial growth centre at Oragadam near Chennai . GARC performs testing of full range of automobile , agriculture tractors and construction equipment vehicles.
Facilities at the centre
Infotronics Lab (Centre of
Excellence)
Passive Safety Lab(Centre of
Excellence
EMC Lab (Centre of Excellence)
Powertrain Lab Fatigue Lab
Homologation Tracks
Component Lab Material Lab Certification Lab
Asia’s largest R&D and vehicle design center - Mahindra Research Valley, Chennai
Daimler R&D center for vehicle design
Ashok Leyland R&D and Technical Centre
Visteon R&D centre
Renault & Nissan R&D centre
Hyundai vehicle development
Ford technical support centre
State of the art National Automobile Testing and R&D centre
Other Research and Development Centres
OEM’s and Auto Components Industry have a well established and Efficient Supply Chain Ecosystem in the Chennai cluster(Major Players)
Export split across key RoRo terminals in India
Mumbai-3%
Munndra-22%
Chennai-49% Ennore-26%
Port OEM’s Exports in FY 13 (000 units)
East Coast
Chennai port Hyundai, Ford* 2.72
Ennore port Ford, Renault- Nissan, Honda, Toyota
1.45
West Coast
Mumbai port M&M, Volkswagen, Tata 0.13
Mundra port Maruti 1.20
Advantages for Tamil Nadu Ports Distances from the manufacturing unit Parking space available at the ports Dedicated RORO facilities at the port Connectivity of the port
Chennai and Ennore ports are major export centers in the country. They have developed long term tie ups with many automobile manufacturers like Hyundai, Nissan, Honda and Ford
Hyundai has contract with Chennai port Ford has recently signed a 10-year contract in Jan 2014 with Ennore Port for carrying out its exports Prior to that Ford undertook its export operation from Chennai Port
Capacity –RoRo terminal Chennai – 340,000 units Ennore – 200,000 units
Chennai and Ennore port together
constitute for more than 70 % exports of
Passenger Vehicles in India.
Infrastructure Facilities : Ports Overview
Passenger vehicles, passenger cars, utility
vehicles, multi-purpose vehicles
Two wheelers: scooters, mopeds, motorcycles
Three wheelers: passenger and goods carriers
Commercial vehicles - light, medium and heavy
commercial vehicles
Auto parks/industrial infrastructure
development on PPP mode
Auto ancillaries/Auto parts manufacturing
Opportunities for Investment in Automobiles and Auto components
Coimbatore
Toothukudi Tirunelveli
Tiruchchirappali
Auto industrial parks
Auto Clusters
Outline Map of Tamil Nadu
Government Support Auto and Auto Component Policy 2014 Highlights
•Setting up of Integrated Ultra Mega Automobile Projects, either new or expansion, Ultra Mega and Super Mega Auto & Auto Component Projects will be offered a rebate in cost of land procured from SIPCOT at 10% and 5% respectively.
•Automobile Hubs & Clusters will be incentivized by providing 50% stamp duty concession and additional capital subsidy of 5%.
Fiscal
•Power
•Capacity addition of 5430MW proposed for the 12th plan period (2012-13 to 2016-17)
•TNEB will provide a power sub-station at its cost for a power requirement in excess of 25 MVA. Railways
•Ports
•Chennai ,Ennore and Thoothukudi Port will ensure 24 hours movement of Export / Import Consignment Trucks / Lorries / Container Trailers.
•Establishment of Dedicated Car Export Terminal with Ro-Ro facilities
•Deepening of to a minimum of 14 metres to enable larger car carriers.
•Provision of faster Customs clearance and electronic documentation
•Roads
•Sanction of Rs.14,872 Crore under the Comprehensive Road Infrastructure Development Programme (CRIDP) for widening and improving roads and bridges.
•Chennai Peripheral Ring Road with 8-lanes and 2 service lanes connecting Mamallapuram to Ennore Port with links to NH 45, NH 4, NH 205 and NH 5 to enhance port connectivity .
•Railways
•Provision of fast trains with limited stops to Maraimalai Nagar Industrial Area.
•Establishment of broad-gauge rail link between Avadi and Guduvancherry with a spur line 1.5 Km from Sriperumbudur to Irungattukkottai .
•Provision of a rail link for Pillaipakkam.
•Increase in the frequency of trains closer to the shift hours in the industrial belts.
Infrastructure
Incentives –Tamil Nadu Automobile
and Auto components Policy 2014
Research & Development NATRiP- National Automotive Testing and R&D Infrastructure Project (NATRiP) at Oragadam near Chennai to create a state of the art Testing, Validation and R&D infrastructure in the country. Global Automotive Research Centre ( GARC) by NATRiP at Chennai to conduct the performance testing of full range of automobile , agriculture tractors and construction equipment vehicles.
Waste Management Identification of land for hazardous waste disposal at subsidized rates. Provision for a solid waste disposal yard, waste water treatment plant, common effluent treatment plants, etc.
Common Facilities SIPCOT will provide land and facilitate the creation of common facility centres in each Industrial Park for testing, metrological centre, tool room and training facilities for workers . Tamil Nadu Housing Board, the Education Department and the Transport Department will also on their part provide housing, education and transport facilities respectively near the SIPCOT Industrial Parks.
Skill Development/Enhancement & Training
Tamil Nadu Skill Development Corporation will facilitate the integration of the technical skills of the youth with the industries.
Institutional Arrangements Auto Industry Training Institute on PPP mode will be promoted to produce skilled labour employable by the auto industry. Training Incentives’ award will be introduced for Automobile Manufacturers and Auto Component Manufacturers. Industry-Institution Interaction Cell will be formed in each Polytechnic College to help students align themselves with the industry needs.
Employment Generation The Government will consider giving permission to the automobile and auto components industry for 24x7 operations, flexibility in employment conditions including working hours for women and shorter or longer shift timings and hiring of contract workers.
Other Key Features
Additional Chief Secretary - Government of Tamil Nadu Industries Department
Phone: 91-44-25671383 Fax: 91-44-25670822Email: [email protected], [email protected]
Nodal agency Tamil Nadu Industrial Guidance and Export Promotion Bureau
19-A, Rukmini Lakshmipathy Road,Egmore, Chennai-600 008Phone: 91-44-2855 3118
Email: [email protected]
Visit us at www.tamilnadugim.com