AUTOMOBILE INDUSTRY

HISTORY • Following economic liberalization in India in 1991, the Indian automotive

industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.

• Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations.

• India's robust economic growth led to the further expansion of its domestic automobile market which attracted significant India-specific investment by multinational automobile manufacturers.

• Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies.

• In the 1980-1990s a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles

Evolution of Automobile Industry

Initial Years Manufacturing was licensed

•High Customs duty on import

•Steep excise duties & •sales tax

•2 Major players: Premier Automobiles Ltd & Hindustan Motors

1980s

•Entry of MUL, better product, with government support

•Seller’s Market

•Long Waiting Periods

Early to mid 90s

•Delicensing in 1993

•Removal of capacity restrictions

•Decrease in customs & excise

•Auto finance boom- more players (foreign banks & non banking companies, better schemes.

Mid 90s – Early 2000s

•Buyers market

•Easy Auto finance

•Manufactures diversifying into related activities: finance lease, insurance and used car market

The Growth JourneyPre 1983 1983-1993 1993-2010

Era of globalization and

evolution of India as a global

manufacturing hub

Closed market

• Growth of market limited by supply

• Outdated models

Players

• Hindustan Motors

• Premier

• Telco

• Ashok Leyland

• Joint ventures with companies in commercial vehicles and components

Players

• Maruti Udyog

• Hindustan Motors

• Premier

• Telco

• Ashok Leyland

• Mahindra & Mahindra

• Global major companies start assembly in India (Toyota, GM, Ford, Honda, Hyundai)

• Imports allowed from April 2001; alignment of duty on components and parts

• Implementation of VAT

Automotive Companies in India

Major Multi-national companiesMajor Indian Companies

AUTOMOBILE

2 WHEELER 3 WHEELERPASSENGER

VEHICLECOMMERCIAL

VEHICLE

MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS

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

Segmentation

The major segment in the Indian automobile market is driven by family

Indian car market is predominantly family oriented

Segment Knowhow

• Among the two-wheeler segment, motorcycles have major share in the market. Hero Honda contributes 50%

motorcycles to the market. In it Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country

• 40% of the three-wheelers are used as goods transport purpose. Piaggio holds 40% of the market share. Among the passenger transport, Bajaj is the leader by making

68% of the three wheelers.

Contd..•Hence , here the primary segmentation was based on the price of the car and also the nature of the car. So we have A segment, B segment, D segment etc and segments like MUV, SUV, Sedan, Hatchback ,small

car etc .

•The dominant segment ( small car/ hatchback) is driven by family. So the entire family takes part in

deciding the purchase of the car. The major determinants being the size of the family, price, cost of

maintaining like mileage , brand type of car etc.

Automobile production

Type of Vehicle 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Units

Passenger Vehicles 1,209,876 1,309,300 1,545,223 1,777,583 1,838,697 Number

Commercial Vehicles 353,703 391,083 519,982 549,006 417,126 Number

Three Wheelers 374,445 434,423 556,126 500,660 501,030 Number

Two Wheelers 6,529,829 7,608,697 8,466,666 8,026,681 8,418,626 Number

Total 8,467,853 9,743,503 11,087,997 10,853,930 11,175,479 Number

Automobile Production

Geographic Segmentation

Market Segmentation

Product Flow

Key performers

• Tata motors

• Hyundai motors

• Maruti Suzuki india

• Mahindra & Mahindra

• Hero honda

• Bajaj motors

Tata motors

• Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 16.45%.

• Tata Motors Limited is India’s largest automobile company, with consolidated revenues of USD 14 billion in 2008-09.

Conti..

• The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer with over 24,000 employees.

• Since first rolled out in 1954, Tata Motors as has produced and sold over 4 million vehicles in India.

Maruti Suzuki India

• Market Share: Passenger Vehicles 46.07%.

• Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market.

Hyundai Motor India:

• Market Share: Passenger Vehicles 14.15%.

• Hyundai Motor India Limited is a wholly owned subsidiary of hyundai motors , south korea world’s fifth largest automobile company and is the largest passenger car exporter.

Contd..

• Hyundai Motor presently markets 49 variants of passenger cars across segments.

• These includes the Santro in the B segment, the i10, the premium hatchback i20 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Transform in the E segment.

Mahindra & Mahindra

• Market Share: Commercial Vehicles 10.01%, Passenger Vehicles 6.50%, Three Wheelers 1.31%.

• Mahindra & Mahindra is mainly engaged in the Multi Utility Vehicle and Three Wheeler segments directly.

Hero Honda Motors

• Market Share: Two Wheelers 41.35%.

• Hero Honda has been the largest two wheeler company in the world for eight consecutive years.

Conti...

• Hero Honda's bikes are sold and serviced through a network of over 3500 customer touch points, comprising a mix of dealers, service centres and stockists located across rural and urban India.

Bajaj Auto

• Market Share: Two Wheelers 26.70%, Three Wheelers 58.60%.

• Bajaj Auto is ranked as the world's fourth largest two and three wheeler manufacturer .

• Despite falling demand in the motorcycle segment, the company has succeeded in maintaining an operating EBITDA (earnings before interest, taxes, depreciation and amortisation) margin of 13.6% of net sales and other operating income.

suzuki tata

barrier

• Set-up of huge plant.

• Existing competition.

• Consumer choice .

• Failure of innovations.

Market shares of major players in Indian passenger car segment

The market shares of the segments of the automobile

industry

Commercial vehicles

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

Passenger vehicle

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

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

Three Wheeler Bajaj Auto, Piaggio India

Two wheeler Passenger vehicle

Market Share

• Market Share: Two Wheelers 41.35%

Bajaj Auto

• Market Share: Two Wheelers 26.70%, Three Wheelers 58.60%

• Tata Motors

• Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 16.45%

• Maruti Suzuki India• Market Share: Passenger Vehicles

46.07%• Hyundai Motor India• Market Share: Passenger Vehicles

14.15%• Ashok Leyland• Market Share: Commercial Vehicles

16.47%• Hero Honda Motors • Market Share: Two Wheelers 41.35%

Detailed Market Share of Major Players

Source: Society of Indian Automotive Manufacturing (SIAM)

FACTORS AFFECTING INDIAN AUTOMOBILE

INDUSTRY

Political Factors

• Government policies relating to the industry• Tax policies• Law and regulation• Trade restrictions and tariff

Economic Factors• economic growth• interest rates,• exchange rates and inflation rate

Social Factors

• population growth rate• age distribution• changes in tastes and buying patterns

Technological Factors

• R&D activity• automation• technology incentives and • the rate of technological change

AUTO EXPO 2010

• Auto Designing comes of age in India • 10th Auto Expo

ACMA - Automotive Component Manufacturers Association of India

CII - Confederation of Indian Industry SIAM - Society for Indian Automobile Manufacturers

January 5 to 11, 2010.

AUTO EXPO 2010

• one single factor distinguishes the10th Auto Expo from similar shows held in the past

• Serious emphasis on everything Green.

• With theunderlying theme of is a showcase for small vehicles, concepts and vehiclesrun on alternate fuels, all of

which willshift consumer preference towards morefuel efficient and less polluting vehicles.

• Auto Expo 2010 is a major step in theIndian automobile industry’s march towards a greener tomorrow.

•?

MAJOR 39 PARTICIPANTS FROM WWW.AUTOEXPO.COM

AUTO EXPO 2010 New Entrant - Harley Davidson, USA

www.autoexpo.com

IDEA OF CONCEPT VEHICLES

• Looking at the products-whether it is a small car,a hybrid, a concept or a huge truck.

• The emphasis is on advanced technology.

• Eco-friendly machines and fuel efficient engines.

TWIZY- Z.EELECTRIC CONCEPT CAR

• Twizy Z.E electric• Concept car from Renault. • Expected to be on Indian

roads by 2011• The Twizy is classified as a

quadracycle and does not need to comply with the big list of safety regulations.

• Since it does not have doors, it does away with the need for an air conditioner.

Maruti Suzuki R3

• The new R3 Multi Purpose Vehicle

• Concept is Maruti’s first step in its plans to explore newer and more profitable segments in the future like Crossovers and Multi Purpose Vehicles.

• It is based on an extended Sx4 Platform.

• Scheduled for production late 2011, the vehicle embodies Maruti Suzuki’s motto –‘Joy

of Life.’

Hyundai i10 Electric• Hyundai Motor

India Ltd., is unveiling the electric version of its compact car – the i10.

• Hyundai i10

Electric is an all-electric zero-emission vehicle that reconciles motoring with the environmental aspirations of customers

Ashok Leyland Hybus

ConclusionIndian Auto Industry

Facts• Second Largest two wheeler manufacturer in the world• Largest tractor and three wheeler manufacturers in the

world• Fourth largest Commercial vehicle market in the world• Eleventh largest passenger car market in the world• Expected to be the seventh largest by 2016.

Growth Potential•Can become World’s third largest automobile market in 2030.

•By 2016, Automotive sector can DOUBLE its percentage contribution to GDP from current levels of 5% (US$50 billion) to 10% ($180 billion).

DID YOU KNOW???

• In July, the Indian automobile industry showed its best ever monthly sales.

• Skoda is planning to introduce a small car priced between Rs. 3 to 5 Lakhs.

• Indian automobile industry is the second fastest growing auto industry in the world.

• India’s car export registered a growth of 33.23%.• Mahindra & Mahindra is the largest tractor maker

in the world and fifth largest player in China market.

SECOND HAND AUTOMOBILE INDUSTRY

• Used car market demand : 1.4 million cars annually

• Market Structure :– Organized : 15%– Unorganized : 85%

• Certified used car dealers in India are – Maruti TrueValue, Honda Auto Terrace, Ford Assured, Toyota U Trust, Hyundai Advantage, Mahindra and Mahindra’s First Choice, General Motors - Chevrolet

SECOND HAND AUTOMOBILE INDUSTRY

• Unorganized market lacks services like -

warranties, OEM equipments, insurance and

taxes.

• Second hand market expected to grow at 12-15

per cent in the next five years.

• Second hand Tata Nano cars are expected to fuel

the growth of second hand car market in India.

LATEST NEWS

• Mercedes Benz India’s Managing Director and

CEO, Wilfried Aulbur has put in papers.

• Maruti ‘s new plant at Manesar with an

investment of around 35billion yen.• India’s 2nd largest car maker, Hyundai Motor

India, ties up with Vijaya Bank

Some Important But Unknown Facts About Automobiles

• The first traffic law was created long before automobile was suggested. It was created by U.K in 1555.

• The first traffic light was put up long before the coming of cars. In 1868 in London, a traffic light was installed outside the British Houses of Parliament.  In 1914, it was put in Cleveland, Ohio.

• The world’s first car number plates were issued by French people in the year of 1883. After the French, they were Netherlands who used number plates in 1889.

References• www.acmainfo.com

• www.wikipedia.org

• www.siamindia.com

• www.ibef.org

• Ernst & Young Auto Track

• www.economywatch.com

• www.business-standard.com

• The Economic Times

• Hindu Business Line

• www.automobileindia.com

• automobiles.mapsofindia.com