India : Performance of Automotive Industry

PowerPoint PresentationQuarterly Update: Q1 FY 2021 (Apr’2020 – Jun’2020)
August, 2020
We Deliver the India Advantage
Key Economic Indicators
7.5 % Contribution of Auto Industry in
GDP
5th Largest in Auto Industry in the world (FY 19)
37 Mn Employment
FY21
Inflows (Apr-00 to Dec-19)
from Apr-2000 to Mar-2020
Source: GoI, Tecnova Research, Industry Reports & Journals
ACMA: Automotive Component Manufacturers Association of India; AMP: Automotive Mission Plan; Bn: Billion; BS: Bharat Standards; CAGR: Compounded Annual Growth Rate; CPI: Consumer Price Inflation; CV: Commercial Vehicle; EV: Electric Vehicle; FAME: Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (EV); FDI: Foreign Direct Investment; FY: Financial Year; GDP: Gross Domestic Product; GST: Goods and Services Tax; JV: Joint Venture; Mn: Million; OEM: Original Equipment Manufacturer; PV: Passenger Vehicle; Q: Quarter; USD: United States Dollar
Photo from Pexels
Auto Industry Trend
3.2 3.3 2.7
0.8 1 0.7
0.6 0.7 0.6
2.8 3.2 3.5
FY18 FY19 FY20
Facts and Figures
The domestic sales in the automobile industry have declined by 17.96% in FY20 as compared to FY19: Passenger Vehicle (-17.82%: dropped to 2.7Mn units from 3.3Mn units ), Commercial Vehicle (- 28.75%: dropped to 0.71Mn units from 1Mn units), 3 Wheelers (- 9.19%: dropped to 0.63Mn units from 0.70Mn units) and 2 Wheelers (-17.76%: dropped to 17.4Mn units from 21.1Mn units)
The Automobile industry produced a total of 26.3 Mn vehicles in FY20 as compared to 30.9 Mn vehicles in FY19 with a decline of -14.73% (including PV, CV, 3 Wheeler and 2 Wheeler)
It is estimated that Indian Automobile Industry has faced over USD 13 Bn loss in the lockdown period
Government Initiative & Policies
• The government is drawing up an incentive scheme for the auto sector aimed at doubling exports of vehicles and components in the next 5 years
• Department of Heavy Industries has drafted a proposal for increasing local manufacturing and scaling up vehicle exports from the country
• Deferment of new standards for 2 wheelers like provision of foot rest for pillion rider, standardization of stands and saree guard may provide relief to the 2 wheeler industry
• Import duty raised on a host of EV components
Completely Knocked down
• PV, 3 & 2 Wheelers : Raised from 10% to 15%
Semi Knocked Down
• PV & 3-Wheelers : Raised from 15% to 30%
Key Headlines
• In April 2020 TVS Motor bought UK’s Norton(sporting bike brand) for USD 22Mn to enter >850cc segment
• BEML to firm up partnerships with Czech, Japanese firms to Indigenise Technology
• Hyundai, Kia and LG Chem. join hands to invest in EV battery start-ups
• Electric Vehicle sales rise by 20% in FY20
• M&M to invest USD 428.6 Mn in SsangYong over next 3 years
Upcoming Events
• Auto connect : 24th September, 2020
• Bus world India : 6th-8th October, 2020 A lot of events scheduled for the months of May and June got postponed without any clarity of rescheduled dated due to COVID -19 pandemic
Photo by Unsplash
The Automotive Industry is currently going through a tough phase. The domestic sales in the automobile industry has declined by 17.96% in FY20 as compared to FY19
• Total domestic sales declined by 75%, in essence, from 6.08 Mn units in Q1 FY20 to 1.49 Mn units in Q1 FY21. Whereas ,the exports have declined by approximately 63% in Q1 FY21 as compared to Q1 FY20
• The total production (PV + CV + 3 Wheelers + 2 Wheelers) declined by 79.39%, that is, from 7.2 Mn units in Q1 FY20 to 1.48 Mn units in Q1 FY21
• The production seemed to be in the range of 20%-40% of the total capacity in Q1 FY21
• It is the first time in the history ever that the Indian Automobile Industry recorded almost 0 sales in the month of April 2020. This was due to COVID-19 lockdown impact
• The industry composition for FY20: PV: 13%, CV: 3%, 3 Wheelers: 3% and 2 Wheelers: 81%
Domestic Sales (Volume In Millions)
Production (Volume in Millions)
2W: Two Wheeler; 3W: Three Wheeler; Corp.: Corporation; CV: Commercial Vehicle; FY: Financial Year; PV: Passenger Vehicle; M&A: Merger & Acquisition; M&M: Mahindra & Mahindra; Mn: Million; OEM: Original Equipment Manufacturer; Q: Quarter; USD: United States Dollar; YoY: Year on Year
0.71 0.2 0.14
FY 19 FY 20
-15% -32% -10% -14%
Note : Q1FY19:Apr’18-Jun’18, Q2FY19: Jul’18-Sep’18,Q3FY19:Oct’18-Dec’18,Q4FY19:Jan’19-Mar’19 Q1FY20:Apr’19-Jun’19, Q2FY20: Jul’19-Sep’19,Q3FY20:Oct’19-Dec’19,Q4FY19:Jan’20-Mar’20, Q1 FY21:Apr’21-Jum’21
Major Investment • Hero MotorCorp to invest USD 387cMn by FY21
• Superbike Seller Motoroyale Kinetic is planning to establish a plant in Maharashtra with an outlay of USD 1.7Mn
• Hinduja group planning to invest USD 1 Bn for vehicle manufacturing unit for Ashok Leyland
• Daimler to invest USD 323 Mn to expand CV production at Orgadam
• Maruti Suzuki to expand in Gujarat by 2020 , plans to add 0.75 Million units
• Hyundai is planning to invest USD 1 Billion in India by 2020
Capacity Addition
Tecnova’s Experience in Automotive Industry
• Market opportunity assessment and M&A for European auto component manufacturer
• Brownfield project for US based auto component manufacturer
• Go to Market Strategy for US based auto component manufacturer
• Market opportunity assessment for European auto OEM
2W: Two Wheeler; 3W: Three Wheeler; Corp.: Corporation; CV: Commercial Vehicle; FY: Financial Year; PV: Passenger Vehicle; M&A: Merger & Acquisition; M&M: Mahindra & Mahindra; Mn: Million; OEM: Original Equipment Manufacturer; Q: Quarter; USD: United States Dollar; YoY: Year on Year
• Hyundai New Gen Creta
Number and Value of Deals Deals by Type
55.6%
27.8%
5.6%
Photo from Pexels
Ashish Garg
Manager - Marketing
Mobile: +91 9871750121
Mobile: +91 9643818349
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India : Performance of Automotive Industry

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