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Two-Wheeler Industry in India
Presented by:
Nisha Arora
Ahmed Raza
Sandeep Show
Md. Shamim AnwarRajeev Kumar Mishra
S. Praveen Reddy
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Roadmap
Overview
Market Segmentation
Major Players
Government Initiatives
Technological AdvancementProduction & sales trend
Herfindahl Index
Michael Porters Analysis
Issues & Concerns
Growth Drivers
Outlook
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Overview
India is the 2nd largest producer of two wheelers
Automobile industry contributes 4% to GDP
Contributes 76% to Automobile Industry in volumeterms
Registered the growth rate of 26.55% in Apr-Feb 2011
Exports recorded growth of 59.3% during Apr-Feb 2011in terms of volume
Hero Honda, Bajaj Auto and TVS Motor are the leadingplayers
Market Penetration-92 vehicle per 1000 people Potential to emerge as a key contributor to Indian
economy
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Market Segmentation
Motorcycle segment75 125cc125 250ccGreater than 250cc
Scooter segmentLess-than-75cc75-125ccGreater than 125cc
Mopeds
Electric TWs
Source:SIAM
Segment-wise Market Share(2010-11)
16.25%
4.36%
3.39%
76%
Passenger Vehicle
Commercial Vehicle
2-wheeler
3-wheeler
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Major Players in 2-wheeler Industry
Source:SIAM
Hero Honda Do inates
45%
20%
15%
13%
2%5%
Hero Honda Motors Ltd
Bajaj Auto Ltd
TVS Motor Company Ltd
Honda Motorcycle &
Scooter India (Pvt) Ltd
Suzuki Motorcycle India
Pvt Ltd
thers
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Governments Initiati
ves
Automotive Mission Plan (AMP) 2006-2016
Automobile Industry was delicensed in July 1991
Import of components is freely allowed 100% Foreign Direct Investment
National Automotive Testing and R&D InfrastructureProject (NATRiP)
Automobile exports are being promoted through the
Focus Market Scheme (FMS) and the Focus ProductScheme (FPS)
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Increase export revenueto $ 35 billion by 2016 from
$ 4.1 billion
On 29.01.07, the Prime Minister released Automobile
Plan 2006 -2016 to give a road map to Indian
Automobile Industry
Indian Automotive Industry
Increase turnover to$145 billion by 2016
from $ 35 billion
Provide employment toadditional 25 million peopby 2016
AMP 2016
By 2016, the Automotive sector is expected to contribute
10% of the countrys GDP and 30~35% of the Industry
Government of India
SIAMACMA
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Advanced Technologies
DTSi
ABS
Fuel Injection
Digital meters
Engine Locking
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Sales seen moderation during 2010-11
The demand determinantsof the industry are factorslike affordability, productinnovation, infrastructure
and price of fuel, risingincome
Domestic demand to growat a CAGR of 9-10% by2015
Exports to maintain stronggrowth momentum in nextfive years
Consistent Increase in Production
-0.1
0
0.1
0.2
0.3
20 04 -0 5 2 00 5-0 6 2 00 6-0 7 2 00 7-0 8 2 00 8-0 9 2 00 9- 10 2 01 0-1 1
Finacial Year
G
rowth(%)
Growth in Sales
-0.1
0
0.1
0.2
0.3
2 00 4- 05 2 005 -06 2 00 6-0 7 2 00 7- 08 2 00 8-0 9 2 00 9- 10 2 01 0-1 1
Financial Year
Growth(%)
Source: SIAM
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Michael Porters Analysis
Inter-firm rivalryHIGH)
Bargaining power ofBuyers HIGH)
Threat of SubstitutesMODERATE)
Threat of potentialEntrants MODERATE)
Bargaining power ofSupplier LOW)
Standard products usedin manufacturingPromotional strategies
Availability of PublictransportAvailability of 4 wheelerin affordable range
Capital InvestmentDifferentiation in promot-ion & product strategySkilled labour & goodR&D
Availability of popularbrandsFull info. about cost &
productsConsciousness amongbuyers
Availability ofsuppliers
Low Switching cost
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Issues & oncerns
Environmental & safety concerns:- Implementation ofemission standards
Lack of distribution network
Rising input cost
Rise in fuel prices
Increasing interest rates
Fluctuation in foreign exchange rates for exports
Withdrawal of DEPB scheme for exporters w.e.f Jun 2011
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Outlook
Two-wheeler (TW) sales to accelerate at a CAGR of 11-12% till FY15
Rural penetration to drive growth in the TW domesticdemand
Revival in economic buoyancy to push TW demand
Replacement demand increasing at a higher pace
Motorcycle segment is expected to grow at a CAGR of 8-9%in next five years
Scooter to outpace industry growth
Mopeds to remain niche segment Investments of around Rs.9-10 billion expected in the next
two to three years
Exports to grow at CGAR 20% till FY15
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Thank youThank you