The Indian Automotive Industry 2012

Ejvind Vgg Own Man in India
The Indian Automotive Industry

DIBD OMII
Own Man In India

May 2012
Introduction to the Indian Automotive Industry

Current market situation Development
Main segments
Investments Scandinavian cases in India SWOT
Current market situation (1/2)

The Indian automotive market is one of the most competitive markets with low costs, which make it an attractive assembly base for foreign automotive manufacturers. India is the second fastest growing automobile market in the world after China. Cars is the major segment in the Indian automotive industry with a growth rate of more than 19% annually.
The large population growth of more than 20 million a year and the rising living standards are two important indicators that logically lead to an increasing demand for automotives in India.
Current market situation (2/2)

The Indian car industry is witnessing a shift in demand going from two wheelers to cars due to rising availability of low cost cars and the car being a symbol of high prestige. Based on the overall production of cars in the country the Indian automotive industry is now the 6th largest in the world between South Korea on 5th and Brazil on 7th. Furthermore, India is the fourth largest in the Asian region after China on the first, Japan on the second and South Korea on the third.
Car brands as Jaguar have an advantage when they are produced in India, since they become less expensive to sell. Imported cars are very expensive to acquire in India, due to to the many import licenses and tariffs that lead to higher prices on imported cars.
Main segments in the Indian automotive industry

Passenger vehicles: Cars and buses Commercial vehicles: Light commercial vehicles Goods carrier Multi UtilityVehicles, Sports Utility and mini vans Heavy commercial vehicles Trucks, Tempo, Tractor and Tipper/Dumper Three wheelers: Rickshaws, Trolleys, Delivery Vans and Tipper Aside from these four segments there is also a growing segment within the electrical car area in India. Electrical cars are both economical, efficient and environment friendly.
Two wheelers:
Scooters, Motorcycles and Mopeds
Indian Automotive development

45000 40000 35000 30000
Million units
25000 20000 15000 10000
Two & Three Wheelers

Commercial Vehicles Passenger Vehicles
5000
0 2009 2010 2011 2016 2021
Year
Key Indian companies in the automotive industry

Company name Products Manufactured Manufacturing locations Total group turnover in USD $
TATA
Cars, Commercial vehicles
Pune, Jamshedpur, Ahmedabad
27.6 billion
Maruti Suzuki
Cars
Gurgaon
7.5 billion
Mahindra and Mahindra
Commercial vehicles
Nashik, Zahirabad, Chennai Gurgaon
7.4 billion
Hero Honda
Motorcycles
3.9 billion
Bajaj Auto
Motorcycles
Pune, Pantnagar, Aurangabad
3.39 billion
Ashok Leyland
Commercial vehicles
Hosur,Pantnagar, Alwar, Bhandara, Chennai
2.5 billion
Key International companies in the Indian automotive industry (1/2)

Company name Products Manufactured Manufacturing locations Total group turnover in USD $ Turnover in India In USD $
Skoda Auto Toyota
Cars
Pune
13.5 billion
767 million
Cars
Gurgaon
192 billion
NA
BMW
Cars
Mumbai, Pune
69 billion
NA
Major automotive companies in India

NORTH WEST
SOUTH
Historical timeline for car brands coming into India

16 14
Number of brands
12 10 8 6 4 2 0 1955-85 1985-90 1990-1995 1995-2000 2000-2005 2005-2010
Time
Future perspective
By 2016, the government is targeting an annual turnover of US$145bn, representing 10% of GDP and employing a total of 25mn staff. A switch to a 30% tariff could be a major boost for European premium vehicle manufacturers such as BMW , Audi and Mercedes , which currently face import tariffs of up to 100%. The economic growth, population expansion and the increasing wealth of individuals are key factors behind the forecasted 18% growth of the auto vehicles sector.
Scandinavian cases in India

Roulunds Braking is a manufacturer of the automotive accessories such as Car body, friction products such as Braking pads, Brake Breaking systems etc. kits for passenger cars and commercial Trelleborg is headquartered in Sweden with vehicles operations in Bangalore and Delhi in India. Roulunds is headquartered in Denmark with Trelleborg has been operating in India since manufacturing facility in Haryana in India 1994. Roulunds has been operating in India since Clients of Trelleborg in India are: 1997 BEML, L&T, Hindustan Aeronautics Limited, Clients of Roulund Braking in India are: Eicher motors, John Deere, Bosch, Maruti, Ashok Leyland, BEML, Toyota, SPM Auto TATA, Ford, Hindustan Aeronautics Limited. Private Limited Trelleborg has around 130 employees in Roulunds Braking has manufacturing India. facilities in India, China, France and Denmark Trelleborg had a group turnover of US$ 3.4 Roulunds Braking has around 200 250 billion and an Indian turnover of around US$ employees in India 112 million. Trelleborg is a Swedish manufacturer of
SWOT Analysis of the Indian automotive industry

Strengths Weaknesses
Investments by foreign car manufacturers Increase in the export levels Low cost and cheap labor Rise in the working and middle class income Increasing demand for European quality Expert skills in producing small cars good for environment Large pool of engineers
Opportunities Growing population in the country Focus from the government in improving the road infrastructure Rising living standards Increase in income level Better car technology is demanded Rising rural demand The car is a status symbol Women drivers have increased
Low quality compared to other automotive countries Low labour productivity High interest rate and overhead level Production cost are generally higher than some othe Asian states, such as China Low investment in R&D area Local demand is still towards low cost vehicles, due to low income levels
Threats Less skilled labor Lack of technologies for Indian companies Increase in the import tariff and technology cost Imports of two wheelers from the Chinese market in India Smaller players that do not fulfill international standards Increased congestion in the urban areas
Danish contact in India

If you are interested to hear more about India and the rising automotive industrys possibilities do not hesitate to contact: Ejvind Vgg director of the DI office in India: E-mail: ejv@di.dk Phone: +91 9930 562729/ +45 2728 0486
Annemette Olesen assistant director of the DI office in India E-mail: amso@di.dk Phone: +91 9930 562761/ +45 2728 2950

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