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  • 11FEBRUARY 2017

    AUTOMOBILES

    FEBRUARY 2017 For updated information, please visit www.ibef.org

  • 22FEBRUARY 2017 For updated information, please visit www.ibef.org

    Executive Summary... 3

    Advantage India...... 6

    Market Overview and Trends....8

    Porter Five Forces Analysis ....25

    Strategies Adopted...27

    Growth Drivers...... 29

    Opportunities......40

    Success Stories.42

    Useful Information.... 45

    AUTOMOBILES

    FEBRUARY 2017

  • 33FEBRUARY 2017

    3.4

    10

    FY16 FY20Emillion

    For updated information, please visit www.ibef.org

    EXECUTIVE SUMMARY(1/3)

    Source: SIAM, NEMMP 2020 (National Electric Mobility Mission Plan), TechSci Research;

    Note: E Estimate

    By 2020, India's share in the

    global passenger vehicle

    market to touch 8 per cent from

    2.40 per cent in 2015

    Third-largest automobile

    industry by 2016

    Two wheeler production to rise

    from 18.8 million in FY16 to 34

    million by FY20E

    Worlds second-largest two

    wheeler manufacturer

    Passenger vehicle production

    to increase from 3.4 million in

    FY16 to 10 million in FY20E

    Passenger vehicle production to

    nearly triple by 2020E

    AUTOMOBILES

    CAGR: 30.96%

    CAGR: 15.97%

    2.40%

    8.00%

    2015 2020

    18.8

    34

    FY16 FY20Emillion

  • 44FEBRUARY 2017

    0.4

    >0.5

    2010 2016

    0.7

    >2.0

    2016 2026

    2.8

    >9.4

    2016 2026

    For updated information, please visit www.ibef.org

    EXECUTIVE SUMMARY(2/3)

    Source: SIAM, NEMMP 2020 (National Electric Mobility Mission Plan), TechSci Research;

    Note: E Estimate

    Domestic sales of passenger

    vehicles in India is expected to

    increase at a CAGR of 12.87

    per cent during 2016-26

    Domestic sales of commercial

    vehicles in India is expected to

    increase at a CAGR of 11.07

    per cent during 2016-26

    Domestic sale of three wheelers

    in India increased at a CAGR of

    3.79 per cent during 2010-16

    AUTOMOBILES

    CAGR: 12.87%

    Domestic sales of passenger

    vehicles to grow from 2.8 million

    in 2016 to 9.4 - 13.4 million by

    2026

    Domestic sales of commercial

    vehicles to grow from 0.7

    million in 2016 to 2.0 - 3.9

    million by 2026

    CAGR: 11.07%

    CAGR: 3.79%

    Domestic sales of three

    wheelers will grow from 0.4

    million in 2010 to 0.5 million in

    2016

    million

    million

    million

  • 55FEBRUARY 2017

    16.46

    >50.6

    2016 2026

    3.6

    >4.86

    2016 2026

    For updated information, please visit www.ibef.org

    EXECUTIVE SUMMARY(3/3)

    Source: SIAM, NEMMP 2020 (National Electric Mobility Mission Plan), TechSci Research;

    Note: 20161 Data till March 2016, E Estimate

    Domestic sales of two wheelers

    in India is expected to increase

    at a CAGR of 11.9 per cent

    during 2016-2026

    Automobile exports to grow at

    a CAGR of 3.05 per cent

    during 2016-2026

    AUTOMOBILES

    Domestic sales of two wheelers

    is the most growing segment,

    with domestic two wheeler

    sales expected to grow from

    16.46 million in 2016 to 50.60 -

    55.5 million by 2026

    Production of passenger

    vehicles, commercial vehicles,

    three wheelers and two

    wheelers grew at a CAGR of

    2.74 per cent, 0.57 per cent,

    3.16 per cent and 7.12 per

    cent, respectively, during

    FY11-16

    CAGR: 3.05%

    CAGR: 11.9%

    million

    million

    1

    1

  • ADVANTAGE INDIA

    AUTOMOBILES

  • 77FEBRUARY 2017

    Growing demand

    For updated information, please visit www.ibef.org

    ADVANTAGE INDIA

    Source: Automotive Mission Plan (20062026), Make in India

    Notes: R&D Research and Development; FDI Foreign Direct Investment; FY Indian Financial Year (April March);

    FY26E Estimated figure for Financial Year 2026

    FY15

    Market

    size:

    USD74

    billion

    FY26E

    Market

    size:

    USD260 to

    300 billion

    Advantage

    India

    AUTOMOBILES

    Policy support The Automotive Mission Plan 2016-26

    (AMP 2026) targets a fourfold growth in the

    automotive industry.

    The government aims to develop India as a

    global manufacturing as well as R&D hub

    There has been a wide array of policy

    support in the form of sops, taxes and FDI

    encouragement

    Innovation opportunities Tata Nano and the upcoming Pixel have

    opened up the potentially large ultra low-

    cost car segment

    Innovation is likely to intensify among

    engine technology and alternative fuels

    Rising investments India has significant cost advantages;

    auto firms save 10-25 per cent on

    operations vis--vis Europe and Latin

    America

    A large pool of skilled manpower and a

    growing technology base would induce

    greater investments

    Growing demand Strong growth in demand due to rising

    income, middle class, and a young

    population is likely to propel India among the

    worlds top five auto manufacturers by 2015

    Growth in export demand is set to

    accelerate

    Government takes Initiatives to set up

    manufacturing plants through Make in India

    Domestic sales of passenger vehicles in

    India is expected to increase at a CAGR of

    12.87 per cent during 2016-26

  • MARKET OVERVIEW AND TRENDS

    AUTOMOBILES

  • 99FEBRUARY 2017 For updated information, please visit www.ibef.org

    EVOLUTION OF THE INDIAN AUTOMOTIVES SECTOR

    Source: Tata Motors, Society of Indian Automobile Manufacturers (SIAM), TechSci Research

    Notes: JV Joint Venture, GST: Goods and Service Tax

    Closed market

    Five players

    Long waiting

    periods and

    outdated models

    Sellers market

    Joint Venture (JV):

    Indian government and

    Suzuki formed Maruti

    Udyog; commenced

    production in 1983

    Component

    manufacturers entered

    the market via JV

    Buyers market

    Sector de-licensed in

    1993

    Major Original

    Equipment

    Manufacturers (OEMs)

    started assembly

    operations in India

    Imports permitted from

    April 2001

    Introduction of value-

    added tax in 2005

    More than 35 market players

    Indian companies gaining

    acceptance on a global scale

    Setting up of National

    Automotive Board to act as

    facilitator between the

    government and industry

    Government has proposed

    GST to support lower raw

    material cost

    Launch of Automotive Mission

    Plan 2016-26 in 2015

    0.4 million

    units (1982)

    0.6 million

    units (1992)

    11 million

    units (2007)

    21.5 million

    units (FY14)

    AUTOMOBILES

    Before 1982

    198392

    19932007

    2008 onwards

    24 million

    units (FY16)

  • 1010FEBRUARY 2017 For updated information, please visit www.ibef.org

    THE AUTOMOTIVES MARKET IS SPLIT INTO FOUR SEGMENTS

    AUTOMOBILES

    Automobiles

    Two-wheelers

    Mopeds

    Scooters

    Motorcycles

    Electric two-wheelers

    Passenger vehicles

    Passenger cars

    Utility vehicles

    Multi-purpose vehicles

    Commercial vehicles

    Light commercial

    vehicles

    Medium and heavy

    commercial vehicles

    Three-wheelers

    Passenger carriers

    Goods carriers

  • 1111FEBRUARY 2017 For updated information, please visit www.ibef.org

    Gross Turnover over the past few years

    (USD billion)

    Source: SIAM, TechSci Research

    Note: 1 Does not include three wheelers

    The gross turnover of automobile manufacturers in India expanded at a CAGR of 11.72 per cent over FY07-15

    The domestic Two Wheelers segment accounted for 80.4 per cent of the total domestic market share1 for the

    year 2015-16

    AUTOMOBILES

    ROBUST GROWTH IN REVENUES

    CAGR: 11.72%

    30.536.6

    33.3

    43.3

    58.6

    66.3 67.6

    46

    74

    2007 2008 2009 2010 2011 2012 2013 2014 2015

  • 1212FEBRUARY 2017 For updated information, please visit www.ibef.org

    Total production of automobiles in India (million units)

    Source: SIAM, TechSci Research

    Note: CAGR Compound Annual Growth Rate

    Production of automobiles increased at a CAGR of 9.4 per cent over FY06-16

    During FY06-16, passenger vehicle segment witnessed the fastest growth, at a CAGR of 10.09 per cent, followed by two

    wheeler segment, which grew at a CAGR of 9.48 per cent during the same time period.

    During fiscal year 2016-17, passenger vehicle market in India is likely to cross the three million units milestone.

    By February 2017, Suzuki Motors plans to commence production at its Gujarat plant

    AUTOMOBILES

    GROWTH IN THE SECTOR EVIDENT FROM HIGHER TOTAL PRODUCTION FIGURES

    1.3

    1.3 1.6 1.8 2.4 3.0

    3.1

    3.2

    3.1

    3.2 3.4

    0.4

    0.5

    0.6

    0.4 0.6 0.8 0.9

    0.8

    0.7

    0.7

    0.8

    0.4 0.6

    0.5

    0.5

    0.6 0.8 0.9

    0.8

    0.8 0.9

    0.9

    7.68.5 8.0 8.4

    10.5

    13.4

    15.4 15.716.9

    18.5 18.8

    FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

    Passenger Vehicle Commercial Vehicle Three Wheelers Two Wheelers

  • 1313FEBRUARY 2017 For