The Indian Automotive Industry 2012

7/27/2019 The Indian Automotive Industry 2012

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Ejvind Vgg Own Man in India

The Indian Automotive Industry

DIBD OMII

Own Man In India

May 2012


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Introduction to the Indian Automotive Industry

Current market situation

Development

Main segments

Investments

Scandinavian cases in India

SWOT


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Current market situation (1/2) The Indian automotive market is one of

the most competitive markets with lowcosts, which make it an attractiveassembly base for foreign automotivemanufacturers.

India is the second fastest growingautomobile market in the world afterChina.

Cars is the major segment in theIndian automotive industry with agrowth rate of more than 19% annually.

The large population growth of morethan 20 million a year and the risingliving standards are two importantindicators that logically lead to anincreasing demand for automotives inIndia.


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Current market situation (2/2) The Indian car industry is witnessing a shift

in demand going from two wheelers to carsdue to rising availability of low cost cars andthe car being a symbol of high prestige.

Based on the overall production of cars in thecountry the Indian automotive industry is nowthe 6th largest in the world between SouthKorea on 5th and Brazil on 7th. Furthermore,India is the fourth largest in the Asian regionafter China on the first, Japan on the secondand South Korea on the third.

Car brands as Jaguar have an advantagewhen they are produced in India, since theybecome less expensive to sell. Imported carsare very expensive to acquire in India, due toto the many import licenses and tariffs thatlead to higher prices on imported cars.


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Main segments in the Indian automotive

industryPassenger vehicles:

Cars and buses

Commercial vehicles:

Light commercial vehicles Goods carrier

Multi UtilityVehicles, Sports Utility and mini vans

Heavy commercial vehicles Trucks, Tempo,

Tractor and Tipper/Dumper

Three wheelers:

Rickshaws, Trolleys, Delivery Vans and Tipper

Two wheelers:

Scooters, Motorcycles and Mopeds

Aside from these four segments there is also a

growing segment within the electrical car area

in India. Electrical cars are both economical,

efficient and environment friendly.


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Indian Automotive development

Millionunits

Year0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2009 2010 2011 2016 2021

Two & Three Wheelers

Commercial Vehicles

Passenger Vehicles


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Key Indian companies in the automotive

industryCompany name Products Manufactured Manufacturing

locationsTotal group turnoverin USD $

TATA Cars, Commercial vehicles Pune, Jamshedpur,Ahmedabad

27.6 billion

Maruti Suzuki Cars Gurgaon 7.5 billion

Mahindra and Mahindra Commercial vehicles Nashik, Zahirabad,Chennai

7.4 billion

Hero Honda Motorcycles Gurgaon 3.9 billion

Bajaj Auto Motorcycles Pune, Pantnagar,Aurangabad

3.39 billion

Ashok Leyland Commercial vehicles Hosur,Pantnagar, Alwar,Bhandara, Chennai

2.5 billion


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Key International companies in the Indian

automotive industry

(1/2)Companyname

ProductsManufactured

Manufacturinglocations

Total groupturnover inUSD $

Turnover inIndiaIn USD $

SkodaAuto

Cars Pune 13.5 billion 767 million

Toyota Cars Gurgaon 192 billion NA

BMW Cars Mumbai, Pune 69 billion NA


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Major automotive companies in India

WESTNORTH

SOUTH


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Historical timeline for car brands coming into

India

0

2

4

6

8

10

12

14

16

1955-85 1985-90 1990-1995 1995-2000 2000-2005 2005-2010

Numb

erofbrands

Time


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Future perspective

By 2016, the government is targetingan annual turnover of US$145bn,representing 10% of GDP andemploying a total of 25mn staff.

A switch to a 30% tariff could be amajor boost for European premiumvehicle manufacturers such as BMW, Audi and Mercedes , whichcurrently face import tariffs of up to100%.

The economic growth, populationexpansion and the increasing wealthof individuals are key factors behindthe forecasted 18% growth of theauto vehicles sector.


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Scandinavian cases in India

Roulunds Braking is a manufacturer of thefriction products such as Braking pads, Brakekits for passenger cars and commercialvehicles

Roulunds is headquartered in Denmark with

manufacturing facility in Haryana in India

Roulunds has been operating in India since1997

Clients of Roulund Braking in India are:

Ashok Leyland, BEML, Toyota, SPM AutoPrivate Limited

Roulunds Braking has manufacturingfacilities in India, China, France and Denmark

Roulunds Braking has around 200 250employees in India

Trelleborg is a Swedish manufacturer of

automotive accessories such as Car body,Breaking systems etc.

Trelleborg is headquartered in Sweden withoperations in Bangalore and Delhi in India.

Trelleborg has been operating in India since1994.

Clients of Trelleborg in India are:

BEML, L&T, Hindustan Aeronautics Limited,Eicher motors, John Deere, Bosch, Maruti,TATA, Ford, Hindustan Aeronautics Limited.

Trelleborg has around 130 employees inIndia.

Trelleborg had a group turnover of US$ 3.4billion and an Indian turnover of around US$112 million.


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SWOT Analysis of the Indian automotive

industryStrengthsInvestments by foreign car manufacturers

Increase in the export levels

Low cost and cheap labor

Rise in the working and middle class income

Increasing demand for European qualityExpert skills in producing small cars good for

environment

Large pool of engineers

Weaknesses

Low quality compared to other automotive countries

Low labour productivity

High interest rate and overhead level

Production cost are generally higher than some othe

Asian states, such as ChinaLow investment in R&D area

Local demand is still towards low cost vehicles, due to

low income levels

Opportunities

Growing population in the country

Focus from the government in improving the road

infrastructure

Rising living standards

Increase in income level

Better car technology is demanded

Rising rural demand

The car is a status symbol

Women drivers have increased

Threats

Less skilled laborLack of technologies for Indian companiesIncrease in the import tariff and technology costImports of two wheelers from the Chinese market inIndiaSmaller players that do not fulfill internationalstandardsIncreased congestion in the urban areas


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Danish contact in India If you are interested to hear more about India and the rising

automotive industrys possibilities do not hesitate to contact:

Ejvind Vgg director of the DI office in India:

E-mail: [email protected] Phone: +91 9930 562729/ +45 2728 0486

Annemette Olesen assistant director of the DI office in India

E-mail: [email protected] Phone:+91 9930 562761/ +45 2728 2950
mailto:[email protected]:[email protected]:[email protected]:[email protected]

Documents

The Indian Automotive Industry 2012