Importance of INDIA for TTS

Importance of India for TTS

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IndiaWhat is it well known for?

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EU-India ComparisonIn 1995 India was as big as the European Union

EU - 28 Member Countries- 4 million km²- 0.5 billion residents- 23 official languages

India- 28 States and 7 Union

Territories- 3 million km²- 1.2 billion residents- 23 official languages

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Why is India imperative?Three reasons why every business strategyshould contain India

• Relevant Premium Segment • Fast growing Middle Class

AttractiveMarket

INDIA Advantage

Cost Innovation

Attractive cost level for sourcing,

production, R&D

Emerging global R&D Hub

(Simplicity & Design to cost)

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Attractive MarketClearly segmented market, premium niche with addressable and attractive size

Market Pyramid - Characteristics

Addressable Premium SegmentAttractive Middle Market

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Youngest population in the world and very strong macro-economic factors are the key drives for the robust domestic market

Population in million

1,600

1,400

1,200

1,000

800

600

1,184

400

200

0

+1%

2030

1,533

2020

1,362

2010

Real GDP in US$ bn

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2010

2,000

0

+11%

2030

6,339

15,186

2020

4,639

6,192

3,317

1,729

GermanyIndia

Source: Economist Intelligence Unit, * Purchasing Power Parity

830

3,000

0

+10%

2030

1,000

5,660

2020

2,000

2,520

2010

4,000

6,000

Private Consumption per Head in US$

5,000

10

8

6

33

4

8

+3%

0203020202010

2

4

Share of World GDP (% at PPP*)

6

10

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Urbanization is happening with great pace and is one key driver for the strong domestic market

Source: McKinsey

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Indian Middle ClassIndian consumer market to reach top 3 slot by 2040

*Middle Class: Income between 15,000 - 28,000 EUR (2009-10) Source: Equitymaster

• Poverty in India is going be reduced to 1/8th of 2005 level by 2015

• India would give up its top position by 2015 according to UNISCEF’s estimates

• Advantage (India) in the age-distribution is strong base for the future consumption

•BRC will be only second to India by 2035

Rise of the middle class*

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Dream of a middle class IndianHouse + Car

12

5

50

10

50

40

30

20

10

0

+8%

20302010

Demand for housing in urban regions in million units

DemandSupplySource: TTS Analysis, Economist Intelligence Unit, McKinsey Global Institute

New passenger car registration in T Units

5,000

4,000

3,000

2,000

1,000

0

+14%

2015

4,516

3,395

2010

2,2972,916

2006

1,380

3,468

Germany India

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TTS business segments and their relevance in the Indian market

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TTS relevant business segmentsIndia is set to be world’s 3rd biggest Automotive market by 2015

Source: Economist Intelligence Unit, TTS analysis

7%3%

VW, BMW, MercedezRest

Maruti Suzuki

30%

Hyundai Motors

20%Tata Motors

40%

New passenger car registrations in T Units

OEM’s will be the key to the automotive market!

26,896

16,69320,000

5,000

25,000

30,000

4,220

15,000

4,516

10,000

0

2015

3,395

US

Japan China

Germany

India

Passenger car market share in %, 2011

Potential of Indian market to reach revenues of $80-100 billion

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TTS relevant business segmentsHouse construction in India purely based on brick

67%

43%

0%

33%

100%

+23%

2010

57%

2000

Construction Costs of an avg. house

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

Source: Construction Industry Development Council (CIDC)

Labor costs have grown significantly in the past 10 years and hence pave way for efficient working methods!

Labor CostMaterial

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Market potential - IndiaPower tools market is expected to grow at 9% CAGR till 2020

6%

15%

Dewalt

Makita

25%

Bosch35%

Hilti

5%

3%B&D

Dynabrade 2%

9%MetaboOthers

•Bosch is the major player in the market with 45 BSS*’s (Festool World) in India•Other major competitors are Makita, Hilti, DeWalt and Dynabrade

Power tools market share split in %, 2011Total power tools market in India, in Million $

• Investments in construction and infrastructure projects are the major drivers for the significant market growth• Third biggest power tool market in Asia-Pacific• Second fast growing market after ChinaSource: Freedonia, TTS analysis ; *Bosch system specialist - spread over app. 45 sq.m

360

280

220195

140

600

550

500

450

400

350

250

50

+9%400

600

2015 2020

300

200

0

2010

100

150

260

20052000

170

100

India Turkey

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Back Up

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More than 300 million household will join the Indian middle class

222

50

34

12

2 1

2000

189

64

31

41 0100%

Desprived<90

Aspirers90-200

Seekers200-500

Strivers200-1,000

Globals >1,000

2030

322

15

32

29

17

7

2020

273

26

40

25

63

2008

Income segmentRupees thousand

All India households by income bracket, 2000-30%, million household, 2000 prices

Source: India Urbanization Econometric Model, McKinsey Global Institute