LOVELY PROFESSIONAL UNIVERSITYLOVELY SCHOOL OF BUSINESS AND APPLIEDARTSPresentation on:Indian Automobile industryPresented By:Asma KhanamRoll no:A20Reg no:11112503
SCHEME OF PRESENTATION Overview Production And Market Key Growth Drivers Market Share Position In World Production Domestic Production, Sales and Exports(2012) SWOT Analysis Future Projections Current Issues For Union Budget 2012-13 Conclusion Suggestions References
OVERVIEW One of the major industrial sectors in India is the automobilesector. Automobile Industry was delicensed in July 1991 with theannouncement of the New Industrial Policy. The Indian Automobile Industry manufactures over 11 millionvehicles and exports about 1.5 million each year, annualproduction of 3.9 million units(2011). Ranking: 2nd largest two wheeler market in the world. 3rd largest passenger car market in Asia & 10th Largest in theworld. 4th largest tractor market in the world. 5th largest commercial vehicle market in the world. 5th largest bus & truck market in the world.
CONTD.. The monthly sale of passenger cars in India exceeds100,000 units. Tata Motors is leading the commercial vehiclesegment with a market share of about 62%. Maruti Suzuki is leading the passenger vehiclesegment with a market share of 51.36%. Contribution of this industry to GDP was 2.77%( 1992-1993) and 6.9 % (2011-12) in real terms. Employment in this industry is 787,7702 , out ofthis 58% are in passenger car segment(Confederation of Indian Industry).
RANK WISE LARGEST FOUR-WHEELERMANUFACTURERS IN INDIA BY SALES :1.Maruti Suzuki2.Hyundai3.Tata Motors4.Mahindra.5.GM Chevrolet6. Honda7. Ford8.Fiat Motors9. koda
PRODUCTION AND MARKETDomestic Automobile Market:According to the statistics launched by(SIAM), the passenger car transactions indomestic market was 145,905 units in January2010 against the 2009 sales of 110,300 units. Thisindirectly refers to the 32.28% growth in thedomestic car sales.In January 2010, the total sales of automobilesgrew to 1,114,156 units as compared to theprevious fiscal years 768,698 units sales.
CONTD. Domestic Market Share for 2010-11Passenger Vehicles 16.25Commercial Vehicles 4.36 Automobile production
KEY GROWTH DRIVERS Rising industrial and agricultural output. Rising per capita income. Favourable demographic distribution with risingworking population and middle class. Urbanization. Increasing disposable incomes in rural agri-sector Availability of a variety of vehicle models meetingdiverse needs and preferences. Greater affordability of vehicles. Easy finance schemes. Favourable government policies. Robust production.
MARKET SHAREThe key competitors on the market of this industry is ruled bypassenger automobile in India. The chief players in this segment are : Maruti Suzuki with market share of 51.36% Tata Motors with market share of 13.88% Hyundai with market share of 17.97% Mahindra and Mahindra with market share of 2.15% Others with market share of 16.83%The commercial vehicles segment is dominated by leadingdomestic players like: Tata Motors with a total market share of 62%, Ashok Leyland Ltd. with a total market share of 15%, M & M Ltd. with a total market share of 11%, Eicher Motors Ltd. with a total share of 6%, and others.
INDIAS POSITION IN WORLDS PRODUCTION Well-developed, globally competitive auto ancillaryindustry . Established automobile testing and R&D centres. Among one of the lowest cost producers of steel inthe world. Worlds second largest manufacturer of twowheelers . Fifth largest manufacturer of commercial vehicles. Manufactures largest number of tractors in theworld. Ninth largest car manufacturer in world.
THE INDIAN AUTO COMPONENTS MARKET
MAIN EXPORT DESTINATION FOR AUTOCOMPONENTS
DOMESTIC SALES IN 2012 The growth rate for overall domestic sales for 2011-12was 12.24 percent amounting to 17,376,624 vehicles. Passenger Vehicles segment grew at 4.66 percentduring April-March 2012 over same period last year. Passenger Cars grew by 2.19 percent, Utility Vehiclesgrew by 16.47 percent and Vans by 10.01 percentduring this period. The overall Commercial Vehicles segment registeredgrowth of 18.20 percent during April-March 2012 ascompared to the same period last year. Three Wheelers sales recorded a decline of (-) 2.43percent in April-March 2012 over same period last year. Total Two Wheelers sales registered a growth of 14.16percent during April-March 2012.
PRODUCTION AND EXPORTS The cumulative production data for April-March2012 shows production growth of 13.83 percentover same period last year. During April-March 2012, the industry exported2,910,055 automobiles registering a growth of25.44 percent.
SWOT ANALYSIS OF INDIAN AUTOMOBILEINDUSTRY
STRENGTHS Automobile Industry is established and EvergreenIndustry. India is the strongest player in small car segment. Indian companies are best cost innovators. Assembly line manufacturing and JIT inventorymanagement, the automotive industry has beenable to achieve significant gains in productivity. Exceptional human resource base. Government provides monetary assistance formanufacturing units.
WEAKNESS India lacks proper infrastructural facilities. Poor sales service. The automotive sector lags behind other sectorssuch an IT and financial services inmanagement, training, reward and retention. Too many taxes levied by government increase thecost of production. Low productivity. Low investments in Research and Development
OPPORTUNITIES Small cars is a future. Green cars. Auto financing. Royalty through Patents. Reduction in Excise duty. Rural demand is rising. Income level is at a constant increase.
THREATS Global Crises. Companies not focusing on R&D are under greatrisk. High competition from Foreign players. Lack of technology for Indian Companies. Increasing rates of interest. Rising cost of raw materials.
FUTURE TRENDS AND PROJECTIONSDemand of four wheelers is expectedvery high due to following factors: Improved life style of people Income of people Prices of four wheelers Price of fuel Family size
CURRENT ISSUES FOR UNION BUDGET 2013 Excise duty on SUVs is hiked from 27 to 30%. The duty on high capacity motorcycles (800cc or more) hasbeen increased to 75% (from the existing 60%). The duty on second hand vehicles has been raised to 125%(from 100%). The Indian government only allows the importof right-hand-drive used cars that are up to 3 years old. Jawaharlal Nehru National Urban Renewal Mission(JNNURM) is proposed to go up to Rs 14,873 crore from theRs 7,383 crore provided this year. Duty on CBU cars in this budget is 100 % (up from 75%). Cars like the Toyota Innova, Mahindra Scorpio & Tata Safariare sure to suffer from price hikes of about Rs. 25,000 30,000.
CONCLUSIONThe auto component industry was growing graduallyand was making significant developments in domesticas well as in international market till 2006-07. Theinternal barriers in the country and constraints atinternational level had sluggish down the industrygrowth, these barriers predominantly are hindranceslike Tax structure especially the disparity in customand excise duties on the raw material of autocomponents, and automobiles. The unavailability ofresources at reasonable cost for example-Power, Skilled Labour, Technology etc is also a majorconstraint. The challenges are mainly to overcomewith these hindrances and sustain into internationalcompetition with other low cost countries.
SUGGESTIONS There is need to promote and sustain internationalcooperation between Governments and industry. There is need for coordinated research anddevelopment, standardization of designs andbroader technologies, effective cost cutting toenhance affordability and loosening of tradebarriers across the globe. There should be separate measures, which requireaddressing at the national and international levels.
CONTD Single tax across the country is an ideal situationand possibilities of this should be explored. Labour laws reforms to facilitate better productivityand reduction in manpower costs as has alreadybeen committed by the Government should beexpedited. Greater tax incentive on expenditure incurred onresearch and development in automotive sector. Easier availability of market credit for fundingautomobile acquisition is required.