Auto industry ppt

• Global Auto Industry – An Analysis

• Indian Auto IndustryTwo WheelersThree WheelersPassenger Cars Commercial Vehicles

• Indian Auto Component Industry

• Emerging Opportunities

• INTRODUCTION

0

10000

20000

30000

40000

50000

60000

70000

1997 1998 1999 2000 2001 2002 2003 2004

Year

World Vehicle Production Trends (in '000s)

North America South America European Union Other Europe Japan Asia-other than Japan

3,758,518

203,234640,934

156,706

4,271,327

212,748

669,719

162,508

5,076,221

276,719

723,330

203,697

5,622,741

356,223

989,560

275,040

6,526,547

374,414

1,209,654

350,033

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

Automobile Production in India (Nos.)

Two Wheelers Three Wheelers Passenger Vehicles Commercial Vehicles

Automobile production in India has doubled in 4 years, with growth seen across all four major segments..

By numbers, two wheelers are the dominant segment of the Indian Automotive market

India is expected to achieve mass motorization status in 2014

Vehicle Density vs. GDP/capitaVehicle Density vs. GDP/capita

Note: The above includes both Passenger Vehicles and Commercial VehiclesSources: Ward’s Auto Yearbook 2002, EIU, Goldman Sachs BRICs report, DRI 2002, A.T. Kearney analysis

Inha

bita

nts/

Vehi

cle

10

Per Capita Income (US$ 000)

50

100

Mature MarketsDeveloping Markets

USAItaly

BrazilMexico

South Korea

CzechRepublic

Spain

China in 2002

India in 2014

UKAustralia Sweden

Germany

Japan

Belgium

France

AustriaCanadaPoland

India in 2002

Argentina

2 20 25 30 3515

$1,000

0 40

China in 2014

Inhabitants/Vehicle

‘02

India 100

China 82

2,183,785

879,759

640,934

2,906,323

937,506

669,719

3,876,175

848,434

723,330

4,355,168

935,279

989,560

5,193,752

986,208

1,209,654

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

2-Wheeler Production & Market Sub-Segments (Nos.)

Motorcycles Scooters Moped

Within 2-Wheelers, Motorcycles contribute 80% of the segment size

CAGR – 15%

Indian 2-Wheeler Market Competitive Scenario

Motorcycle 50% 30% 13% 4% 1% 2% <1% - <1%

- 15% 28% - 2% 46% 9% <1% -

- - 82% - - - 8% 10% -

India is now the second largest two-wheeler market in the world

Figures denote Mkt Share (Apr-Oct 05)

203,234 212,748

276,719

356,223374,414

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

3-Wheeler Production (Nos.)

Three Wheeler

Predominantly used for commercial purposes, for both Goods Transport (40%) and Passenger Transport (60%).

CAGR – 17%

Indian 3-Wheeler Market Sub-segments and Competitive Scenario

68% 24% 2% 1% 3% 3%

23% 40% 12% 13% 7% 6%

India is the largest three-wheeler market in the world

Passenger

Goods

Scooters India

60%

40%

Sub Segments

Figures denote Mkt Share (Apr-Oct 05)

513,415

127,519

0

500,301

105,667

63,751

557,410

114,479

51,441

782,562

146,325

60,673

960,505

181,778

67,371

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

Passenger Vehicle Production & Market Sub-Segments (Nos.)

Passenger Cars Utility Vehicles Multi-Purpose Vehicles

Unlike the USA, the Indian Passenger Vehicle market is dominated by Cars (79%)

CAGR – 17%

(*)

(*) MPVs were part of Passenger Car segment till 2000-01

Indian Passenger Vehicle Market – Competitive Scenario

Passenger Cars

52% 17% 19% - 1% 5% 2% 2% 2% 1% - <1% <1%

Utility Vehicles

2% 18% 1% 42% 21% 1% 10% 1% <1% - 4% - <1%

Multi Purpose Vehicles

100% - - - - - - - - - - - <1%

4th largest Passenger Vehicle Market in Asia

Figures denote Mkt Share (Apr-Oct 05)

87,784

68,922

96,752

65,756

120,502

83,195

166,123

108,917

211,143

138,890

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000-01 2001-02 2002-03 2003-04 2004-05

Year

Commercial Vehicle Production & Market Sub-Segments (Nos.)

Medium & Heavy Commercial Vehicles Light Commercial Vehicles

Unlike most developed markets, Indian Market has seen dominance by Medium Commercial vehicles

CAGR – 22%

Indian Commercial Vehicle Market – Competitive Scenario

Medium & Heavy CV - Trucks

64% 24% - 8% - 3% - <1% <1%

Buses – L, M & HCV

40% 30% 7% 5% 10% 6% 1% 1% -

Light & Small Comm Veh – Trucks

59% <1% 32% 4% 3% 3% <1% - -

TATA Motors dominates over 60% of the Indian Commercial Vehicle Market. It is also the World’s fifth largest Medium & Heavy commercial vehicle manufacturer.

Figures denote Mkt Share (Apr-Oct 05)

Road network development in India

Golden Quadrilateral

N S E W Corridors

Feeder Roads

Source: CrisInfac, NHAI

Year-wise completion schedule of NHDPPlanned length – 14,000 km

2005-0752%

Completed15%

200421%2003

12%

Between 2003-04 to 2007-08 each year ~2000 Kms of 4-laned highways will be added

Impact on Domestic CV Industry Faster turnaround Increased freight movement Lower operating cost of vehicles Replacement demand

Between 1997 - 2002, Highway length in China increased by around 15,000 km and CV volumes nearly doubled from 1.2 mn to 2.1mn …….. Indicative of future likely directions in Indian market

111,138

16,26327,112

13,770

104,183

15,462

53,165

11,870

179,682

43,366

72,005

12,255

265,052

68,144

129,291

17,432

366,724

66,801

166,413

29,949

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2000-01 2001-02 2002-03 2003-04 2004-05Year

Automobile Exports from India (Nos.)

Two Wheelers Three Wheelers Passenger Vehicles Commercial Vehicles

CAGR Overall – 22%Passenger Veh – 57%2-Wheelers – 35%International Business

growth presents a huge opportunity, as well as a challenge for the Indian Automotive Industry

Opportunities Manufacturing:

Emerging World hub: Small Cars (Suzuki, Hyundai) Castings & Forgings

Regional Sourcing base Aggregates for Entire Vehicle Programs (e.g.

Transmissions for Toyota IMV)

Globalisation opportunities for Indian Manufacturers Increasing exports of “Made In India”

vehicles Establishing manufacturing facilities at

foreign locations (e.g. TVS Indonesia) Contract Manufacturing (e.g. Sub-150cc Bajaj

motor cycles for Kawasaki) Growth through Mergers & Acquisitions

(TATA Motors acquisition of Daewoo Commercial Veh, Korea & Hispano, Spain

Engineering Services:

Indian IT Majors offering on-shore and off-shore engineering services to Global IT players.

(e.g. TCS, TATA Technologies, Infosys, Satyam)

Global Auto & Auto component majors putting up Development Centres in India, either on their own or in partnership with local players

(e.g. General Motors, Daimler Chyrsler, Johnson Controls, Delphi, Bosch)

Independent Indian OEMs focusing on upgrading their design & engineering capabilities.(e.g. TATA Motors European Development Centre & Acquisition of INCAT plc, UK)

THREATS

Increase in input prices Ferrous & Non-Ferrous Metals Crude oil & derivatives Natural rubber

Rising Customer Expectations Product features Quality & reliability

Integration with Global Markets Lowering product life cycles Reducing time-to-market for

new products Threat of new competition

WEAKNESS

Harsher operating conditions pose unique challenges for product conceptualization, design and development: Road inadequacy and quality High Traffic density Poor Fuel quality & variety (Gasoline,

Diesel, CNG & LPG)