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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