Anda di halaman 1dari 321

Analysis of CARS AND UVS Industry

Table of Contents

Segmentwise Domestic Sales


Player-wise Domestic Sales
Player-wise Domestic Market Share
Player-wise Domestic Sales
Player-wise Model Wise Domestic Sales
Cars Modelwise Sales
Passenger Car Annual
Alternative Fuels
Evolving Technologies
Key Global Markets-Overall
Key Global Markets-US
Key Global Markets-Western Europe
Key Global Markets-China
Launch of Honda Amaze
Launch of Ford Ecosport
Fuel Mix In Passenger Vehicles
Used Car Market-Demand Review & Outlook

:3
: 10
: 12
: 14
: 16
: 21
: 27
: 29
: 40
: 60
: 66
: 78
: 87
: 95
: 110
: 126
: 146

Table of Contents

Used Car Market-Industry Structure


Used Car Market-Dealer Profitability
Summary
Demand Domestic
Demand Exports
Realizations
Input Costs
Margins
Supply
Short Term Demand Trends
Player Profiles
Maruti
Hyundai
Mahindra
Tata Motors

: 158
: 166
: 174
: 178
: 203
: 219
: 223
: 228
: 241
: 254
: 275
: 289
: 300
: 311

Segmentwise domestic sales

Passenger cars: Segment-wise domestic sales


Cars New format
Segment
Micro
Micro Total
Mini

Mini Total
Compact

Compact Total
Super Compact

Player
Tata Motors
General Motors India Ltd.
Hyundai Motors India Ltd.
Maruti Suzuki India Ltd.
Fiat India Ltd.
Ford India Ltd.
General Motors India Ltd.
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Maruti Suzuki India Ltd.
Nissan Motor India Pvt. Ltd.
Renault
Skoda Auto India Pvt. Ltd
Tata Motors
Toyota Kirloskar Motor Ltd.
Volkswagen
Hyundai Motors India Ltd.
Mahindra & Mahindra Ltd.
Maruti Suzuki India Ltd.
Toyota Kirloskar Motor Ltd.
Volkswagen

2010-11
70,432
70,432
34,603
82,971
573,238
690,812
11,760
78,116
37,218
4,862
240,567
261,799
12,315
11,078
142,684
28,904
829,303
15,404
10,009
107,955
8,101
398

2011-12
74,527
74,527
23,184
127,441
491,389
642,014
11,415
70,052
51,597
14,635
201,133
235,754
18,633
1,993
14,936
163,174
31,761
39,465
854,548
8,839
17,839
110,132
50,157
59

2012-13
53,848
53,848
7,790
132,665
429,569
570,024
5,432
60,964
50,494
41,350
184,297
255,302
11,449
5,588
3,343
113,271
27,596
36,847
795,933
2,931
15,348
169,571
38,655
1

Passenger cars: Segment-wise domestic sales


Cars New format
Segment

Player

Super Compact Total


Mid-Size

2011-12

2012-13

141,867

187,026

226,506

Ford India Ltd.


General Motors India Ltd.
Hindustan Motors
Honda SIEL Cars India Ltd.

17,279
3,586
7,040
46,631

20,371
1,325
2,852
35,906

14,807
4,877
3,414
30,530

Hyundai Motors India Ltd.

19,695

49,557

58,063

Maruti Suzuki India Ltd.

23,317

17,997

6,707

14,161
8,852

23,998
5,630
19,979

Tata Motors

42,588

20,265

7,573

Volkswagen

18,380

34,067

24,585

178,516
707
1,105
1,278
9,352
11,512
165
5,012
2
138
6,598
10,707

205,353
344
435
567
4,245
10,743
102
2,296
458
1,308
5,466
8,904

200,163
1,501
4,059
71
685
4,556
188
1,669
2,709
5,348

Nissan Motor India Pvt. Ltd.


Renault
Skoda Auto India Pvt. Ltd

Mid-Size Total
Executive

2010-11

Audi
BMW India Pvt. Ltd.
Daimlerchrysler India Ltd.
Fiat India Ltd.
General Motors India Ltd.
Hindustan Motors
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Maruti Suzuki India Ltd.
Renault
Skoda Auto India Pvt. Ltd
Toyota Kirloskar Motor Ltd.

Passenger cars: Segment-wise domestic sales


Cars New format
Segment

Player

2010-11

2011-12

2012-13

49,797

37,974

23,696

488

96

BMW India Pvt. Ltd.

1,080

528

Daimlerchrysler India Ltd.

1,078

308

Honda SIEL Cars India Ltd.

2,446

1,271

617

Hyundai Motors India Ltd.

265

198

339

Nissan Motor India Pvt. Ltd.

242

171

57

4,017

3,080

1,910

Toyota Kirloskar Motor Ltd.

417

147

401

Volkswagen

662

1,562

1,034

10,695

7,361

4,358

5,777

6,901

BMW India Pvt. Ltd.

249

8,216

6,129

Daimlerchrysler India Ltd.

272

6,452

5,006

Tata Motors

1,243

Volkswagen

42

Tata-JLR

796

354

Volkswagen-Porsche

220

Executive Total
Premium

Audi

Skoda Auto India Pvt. Ltd

Premium Total
Luxury

Audi

Passenger cars: Segment-wise domestic sales


Cars New format
Segment

Player

Luxury Total
Coupe

2010-11

2011-12

2012-13

568

21,248

19,855

5
50

8
7

103

25

10

168

46

2
2

1,972,158

2,030,099

1,894,383

Audi
BMW India Pvt. Ltd.
Daimlerchrysler India Ltd.
Nissan Motor India Pvt. Ltd.

Coupe Total
Exotics
Exotics Total
Grand Total

Daimlerchrysler India Ltd.

Note:
1) Numbers for Audi, BMW and Mercedes are available only from April to September for the years 2010-11 & 2011-12
2) Totals will not match SIAM numbers on account of restatement of data by SIAM
3) Since SIAM has reclassified figures from April 2011 onwards, previous years figures in the new classification is not
available

Passenger cars: Segment-wise domestic sales


Cars old format
Segment
A1: Mini

Player
Maruti Suzuki India Ltd
Tata Motors Ltd.

A2: Compact
Fiat India Ltd.
Ford India Ltd.
General Motors India Ltd.
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Nissan Motors Ltd
Maruti Suzuki India Ltd
Skoda Auto India Pvt. Ltd
Tata Motors Ltd.
Volkswagen India Pvt Ltd
A3: Mid-size
Audi India Ltd
BMW India Pvt. Ltd.
Fiat India Ltd.
Ford India Ltd.
General Motors India Ltd.
Hindustan Motors Ltd
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Mahindra & Mahindra Ltd.
Maruti Suzuki India Ltd
Nissan Motors Ltd
Skoda Auto India Pvt Ltd
Tata Motors Ltd.
Toyota Kirloskar Motor Ltd
Volkswagen India Pvt Ltd

2006-07
79,245
79,245
752,916
1,614
2,399
163,838
440,375
144,690
197,064
584
39,822
10,726
12,481
40,464
28,980
29,697
34310
-

2007-08
69,553
69,553
858,801
3,356
1,636
33,583
182,775
499,280
2,658
135,513
225,614
81
29,333
5,624
11,005
40,521
32,791
25,891
49,335
31033
-

2008-09
2009-10
49,383
63,378
49,383
33,028
30,350
885,639
1,128,977
3,544
13,676
1,929
7,825
39,715
61,022
7,541
212,001
284,109
633,190
511,396
5,801
6,501
111,253
114,415
698
241,683
276,294
46
23,267
26,499
3,004
3,793
7,098
9,037
38,215
45,028
31,579
30,418
13,423
5,332
75,928
99,315
49169
56634
192

Passenger cars: Segment-wise domestic sales


Segment
A4: Executive

Player

Cars old format

Audi India
BMW India Pvt. Ltd.
Fiat India Ltd.
General Motors India Ltd.
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Maruti Suzuki India Ltd
Mercedes-Benz India Pvt Ltd
Skoda Auto India Pvt. Ltd
Toyota Kirloskar Motor Ltd.
Volkswagen Group Sales India
A5: Premium
Audi India Ltd
BMW India Pvt Ltd
Honda SIEL Cars India Ltd.
Hyundai Motors India Ltd.
Mercedes-Benz India Pvt Ltd
Nissan Motor India Pvt. Ltd.
Skoda Auto India Pvt. Ltd
Toyota Kirloskar Motor Ltd.
Volkswagen Group Sales India
A6: Luxury
Audi India
BMW India Pvt. Ltd.
Mercedes-Benz India Pvt Ltd
Volkswagen India Pvt Ltd

2006-07
40,964
3,861
16,261
1,482
868
11,709
6,783
5,970
2,727
570
937
735
1,001
249
249
-

2007-08
42,185
901
6,058
16,723
203
1,153
10,943
6,204
6,130
850
2,129
538
1,034
586
993
819
297
522
-

2008-09
2009-10
33,638
46,437
293
1,075
1,517
4,509
11,128
3,204
5,821
7,851
5,985
19
1,531
1,675
7,380
7,831
8,069
9,743
2,444
9,039
11,898
671
1,202
1,388
1,509
4,107
2,775
431
440
1,160
1,438
56
207
713
3,170
513
397
760
1,092
1,353
333
466
279
389
480
498
-

Playerwise domestic sales

Cars: player-wise domestic sales


(Units)

2008-09

2009-10

2010-11

2011-12

2012-13

1,220,474

1,526,259

1,972,158

2,030,099

1,894,383

Audi

1,004

1,532

1,205

6,225

6,901

BMW India Pvt. Ltd.

2,742

3,461

2,484

9,186

6,129

Daimlerchrysler India Ltd.

3,171

3,611

2,731

7,354

5,006

Fiat India Ltd.

8,053

24,806

21,112

15,660

6,933

25,196
45,923

34,290
70,636

95,395
86,919

90,423
86,849

75,771
67,220

7,098

9,038

7,205

2,954

3,485

Honda SIEL Cars India Ltd.


Hyundai Motors India Ltd.

50,173
244,030

61,329
314,967

58,951
358,904

54,108
387,168

73,182
382,851

Mahindra & Mahindra Ltd.

13,423

5,332

10,009

17,839

15,348

Maruti Suzuki India Ltd.


Nissan Motor India Pvt. Ltd.

636,707
56

765,526
126

966,447
12,567

855,730
32,971

861,337
35,504

3,301

12,887

13,894
160,422

17,502
201,399

21,693
255,704

32,334
257,966

27,941
175,935

8,582

10,140

19,225

90,969

72,000

Volkswagen

2,564

51,607

78,266

65,379

Tata-JLR
Volkswagen-Porsche
Note:

796
-

354
220

Passenger cars total

Ford India Ltd.


General Motors India Ltd.
Hindustan Motors

Renault
Skoda Auto India Pvt. Ltd
Tata Motors
Toyota Kirloskar Motor Ltd.

1) Numbers for Audi, BMW and Mercedes are available only from April to September for the years 2010-11 and
2011-12
2) Totals will not match SIAM numbers on account of restatement of data by SIAM

Playerwise domestic market share

Cars: player-wise domestic market share


(Units)
2008-09
2009-10
2010-11
Passenger cars total
100.0
100.0
100.0
Audi
0.1
0.1
0.1
BMW India Pvt. Ltd.
0.2
0.2
0.1
Daimlerchrysler India Ltd.
0.3
0.2
0.1
Fiat India Ltd.
0.7
1.6
1.1
Ford India Ltd.
2.1
2.2
4.8
General Motors India Ltd.
3.8
4.6
4.4
Hindustan Motors
0.6
0.6
0.4
Honda SIEL Cars India Ltd.
4.1
4.0
3.0
Hyundai Motors India Ltd.
20.0
20.6
18.2
Mahindra & Mahindra Ltd.
1.1
0.3
0.5
Maruti Suzuki India Ltd.
52.2
50.2
49.0
Nissan Motor India Pvt. Ltd.
0.0
0.0
0.6
Renault
Skoda Auto India Pvt. Ltd
1.1
1.1
1.1
Tata Motors
13.1
13.2
13.0
Toyota Kirloskar Motor Ltd.
0.7
0.7
1.0
Volkswagen
0.2
2.6
Tata-JLR
Volkswagen-Porsche
Note:
1) Numbers for Audi, BMW and Mercedes are available only from April to September
for the years 2010-11 and 2011-12
2) Totals will not match SIAM numbers on account of restatement of data by SIAM
Source: SIAM, CRISIL Research

2011-12
100.0
0.3
0.5
0.4
0.8
4.5
4.3
0.1
2.7
19.1
0.9
42.2
1.6
0.2
1.6
12.7
4.5
3.9
0.0
-

2012-13
100.0
0.4
0.3
0.3
0.4
4.0
3.5
0.2
3.9
20.2
0.8
45.5
1.9
0.7
1.5
9.3
3.8
3.5
0.0
0.0

UVs-Playerwise domestic sales

Utility vehicles: player-wise domestic sales


(Units)

2008-09

2009-10

2010-11

2011-12

2012-13

Utility vehicles total

331,820

422,826

529,774

599,512

790,958

687

387

296

480

190

462

44

149

197

130

Force Motors Ltd.

5,063

5,917

3,667

5,234

4,562

Ford India Ltd.

2,780

2,597

3,142

2,242

1,454

15,603

16,458

20,067

23,201

20,930

Hindustan Motors

2,095

1,676

2,569

1,969

2,104

Honda SIEL Cars India Ltd.

2,246

474

512

312

301

Hyundai Motors India Ltd.

50

14

462

1,611

760

3,489

847

652

483

260

106,379

150,627

171,304

227,861

295,363

85,405

105,257

166,292

150,586

189,709

10

180

460

290

1,451

Renault

365

39,576

Skoda Auto India Pvt. Ltd

1,278

1,755

1,126

Tata Motors

70,050

84,447

93,429

113,384

139,772

Toyota Kirloskar Motor Ltd.

38,310

53,703

64,863

69,234

93,504

86

Audi
BMW India Pvt. Ltd.
Daimlerchrysler India Ltd.

General Motors India Ltd.

International Cars & Motors Ltd.


Mahindra & Mahindra Ltd.
Maruti Suzuki India Ltd.
Nissan Motor India Pvt. Ltd.

Volkswagen

UV_Player-wise model wise domestic sales

Utility Vehicles: Player-wise model sales


Company
Audi

Model
Q5
Q7

BMW India Pvt. Ltd.


X1
X3
X5
X6
Daimlerchrysler India Ltd.
G Class
GL
M Class
R Class
Force Motors Ltd.
Force One
Traveller
Trax
Ford India Ltd.
Endeavour
General Motors India Ltd.
Captiva
Tavera

2008-09
390

107

76
277
127
149

107

12
137

5,266

5,959

2010-11
1,156
616
540
985
542
17
243
183
685
3
239
405
38
8,849

581
4,685
2,780
2,780
15,604
2,134
13,470

41
5,918
2,598
2,598
16,458
1,124
15,334

8,849
3,142
3,142
20,063
1,732
18,331

390
296
97
199

2009-10
649
195
454
480

2011-12
943
554
389
2,039
1,816
73
83
67
343
59
55
223
6
8,487
289
798
7,400
2,242
2,242
23,217
1,125
22,092

2012-13
10,201
907
9,294
1,454
1,454
20,930
477
20,453

Utility Vehicles: Player-wise model sales


Company

Model

Hindustan Motors
Montero
Outlander
Pajero
Honda SIEL Cars India Ltd.
CR-V
Hyundai Motors India Ltd.
Santa Fe
Tuscon
International Cars Ltd.
Rhino
Mahindra & Mahindra Ltd.
Bolero
Scorpio
XUV5oo
Xylo
Quanto
Rexton
Maruti Suzuki India Ltd.
Ertiga
Gypsy
Versa
Vitara

2008-09 2009-10 2010-11 2011-12 2012-13


2,054
138
278
1,638
2,245
2,245
50

1,711
56
412
1,243
474
474
14

2,581
69
1,253
1,259
516
516
467
467

50
14
3,487
1,011
564
3,487
1,011
564
93,165 139,704 158,626
55,924 73,824 83,130
29,995 36,973 43,439
7,246 28,907 32,057
8,929
3,983
5,666
7,219
3,841
5,570
1,440
51
8
270
91
88

1,977
1,958
86
15
320
80
1,571
1,863
319
301
319
301
1,611
760
1,611
760
337
50
337
50
193,292 256,535
100,797 117,665
50,985 50,168
13,819 45,418
27,691 25,067
- 16,434
1,783
6,525 79,192
1,117 76,375
5,381
2,804
27
13

Utility Vehicles: Player-wise model sales


Company

Model

Nissan

X-Trail
Evalia

Precision Cars India Private Ltd.


Cayenne
Renault India
Koleos
DUSTER
Skoda Auto India Pvt. Ltd
Yeti
Tata Motors
Aria
Safari
Sumo
Winger
Xenon
Toyota Kirloskar Motor Ltd.
Fortuner
Innova
LC200
Prado
Volkswagen
Touareg

2008-09
111
111
64
64
41,681
14,762
24,465
2,454
38,310
38,201
109
12
12

2009-10
212
212
64
64
35,526
10,482
23,049
1,995
53,703
6,280
47,294
66
63
91
91

2010-11
479
479
113
113
1,278
1,278
43,682
1,421
16,170
24,002
2,089
64,863
11,996
52,588
43
236
3
3

2011-12
290
290
207
207
367
367
1,755
1,755
48,284
3,890
16,066
27,819
421
88
69,234
11,538
57,543
44
109
6
6

2012-13
1,443
49
1,394
39,576
388
39,188
1,052
1,052
44,439
838
13,001
30,600
93,504
16,279
77,062
94
69
88
88

Utility Vehicles: Player-wise model sales


Company

Model

Volvo Car India

XC60
XC90

Total (excluding MPVs)


Maruti Suzuki India Ltd
Eeco
Omni
Tata Motors Ltd
Venture
Ace Magic/Iris
Mahindra & Mahindra Ltd.
Maxximo Minivan VX
Gio and Maximo
Force Motors Ltd.
Trip

2008-09
41

2009-10
56

41
214,592
76,508

56
262,842
101,274
8,601
92,673
49,012
49,012
413,128

76,508
28,659
28,659
319,759

Total (including MPVs)


Notes:
1) Sales numbers of Audi, BMW, Mercedes from September 2011 are not available
2) Segment totals and YTD nos may
not match corresponding SIAM
figures due to non availability of sales
of certain models and re-statement of
data by SIAM
3) Data for Mahindra and Mahindra
excludes sales of Jeep & Marshall
Commander
na: Not Available

2010-11
133
82
51
313,851
160,626
68,329
92,297
51,755
704
51,051
956
956
237
237
527,425

2011-12
96
57
39
361,571
144,061
59,537
84,524
64,909
7,969
56,940
25,644
748
24,896
147
147
596,332

2012-13
119
84
35
551,602
110,517
40,563
69,954
95,333
2,981
92,352
31,437
9,124
22,313
12
12
788,901

Cars-modelwise-sales

Cars: Model-wise domestic sales (Industry)


(nos)
Audi India Ltd

Model

Segment

A4
A6
A7
A8
R8
RS5
TT

Executive
Premium
Premium
Luxury
Coupe
Coupe
Coupe

3 Series
5 Series
6 Series
7 Series
GT
Z4

Executive
Premium
Coupe
Luxury
Coupe
Coupe

BMW India Pvt. Ltd

Fiat India Automobiles Pvt Ltd


500
Fiat Palio
Grande Punto
Linea

Compact
Compact
Compact
Executive

Fiesta
Figo
Fusion
Ikon
Mondeo

Mid-Size
Compact
Mid-Size
Mid-Size
Executive

Ford India Ltd

2008-09
826
437
328
40
6
15
2,742
1,075
1,352
36
279
-

2009-10
1,350
700
590
39
9
12
3,459
1,517
1,477
19
389
11
46

2010-11
1,999
1,173
755
45
17
9
6,094
2,381
2,901
14
556
165
77

2011-12
2,047
1,278
486
52
201
13
17
2,863
1,084
1,549
10
175
24
21

2012-13
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a

8,067

24,609

21,067

16,073

6,920

31
3,527
4,509
25,196
15,350
2,141
7,705
-

23
342
13,116
11,128
34,325
16,254
7,316
517
10,238
-

1
183
11,896
8,987
95,395
13,812
78,116
3,467
-

36
11,696
4,341
90,506
20,454
70,052
-

2
5,425
1,493
75,771
14,807
60,964
-

Cars: Model-wise domestic sales (Industry)


(nos)
General Motors India Ltd

Model
Aveo
Aveo - UVA
Beat
Cruze
Optra
Sail
Spark

Segment
Mid-Size
Compact
Compact
Executive
Executive
Compact
Mini

Ambassador
Evo X
Lancer

Mid-Size
Executive
Mid-Size

Accord
Brio
Civic
Honda City
Jazz
Amaze

Premium
Compact
Executive
Mid-Size
Compact
Compact

Accent
Elantra
EON
Getz
i10
i20
Santro
Sonata
Verna

Super Compact
Executive
Mini
Compact
Compact
Compact
Mini
Premium
Mid-Size

Hindustan Motors Ltd

Honda SIEL Cars India Ltd

Hyundai Motors India Ltd

2008-09
3,010
7,299
3,204
32,528
6,562
4,992
1,570
50,180
4,105
7,852
38,223
244,031
12,234
19
9,436
106,095
4,993
91,478
431
19,345

2009-10
3,796
6,151
12,614
4,072
1,749
42,295
8,950
8,210
740
61,332
2,775
5,985
45,030
7,542
314,967
12,463
6,467
149,242
42,128
86,272
440
17,955

2010-11
3,586
3,432
34,028
9,040
2,465
34,602
7,223
6,516
707
58,951
2,446
5,012
46,631
4,862
358,893
15,404
2
62
161,860
78,645
82,971
254
19,695

2011-12
1,325
832
50,764
8,037
2,706
23,183
3,069
2,626
9
434
54,108
1,271
10,489
2,296
35,906
4,146
387,168
8,839
57,468
123,681
77,456
69,969
198
49,557

2012-13
323
458
44,169
3,994
65
10,422
7,789
3,510
3,405
105
73,202
617
32,179
685
30,550
6,619
2,552
382,851
2,931
4,556
88,836
92,897
91,400
43,829
339
58,063

Cars: Model-wise domestic sales (Industry)


(nos)

Model

Segment

Maruti Suzuki India Ltd

Alto
A-Star
Baleno
Dzire
Esteem
Estilo
Kizashi
M800
Ritz
Swift
SX4
Wagon R
Zen

Mini
Mini
Mid-Size
Super Compact
Super Compact
Compact
Executive
Mini
Compact
Compact
Mid-Size
Mini
Mini

C Class
CLS
E 250
E Class Cabrio
E Class coupe
Maybach
S Class
SL Roadster
SLK Roadster
SLS AMG

Executive
Coupe
Premium
Coupe
Coupe
Exotics
Luxury
Coupe
Coupe
Coupe

Mercedes-Benz India Pvt Ltd

2008-09

2009-10

2010-11

2011-12

2012-13

212,568
21,295
61,952
32,694
49,383
110,071
13,976
134,768
3,137
1,504
16
1,119
1
472
1
24
-

235,212
32,186
83,601
41,624
33,028
63,096
116,174
15,714
144,898
3,611
1,653
5
1,433
9
495
16
-

346,840
36,894
107,955
52,188
128
26,485
68,749
140,862
23,327
163,019
5,962
2,495
35
2,628
22
32
704
2
37
7

308,288
13,374
110,132
17,458
458
23,253
64,767
153,529
17,997
146,474
3,069
1,473
5
1,351
23
2
195
15
5

266,785
9,257
169,571
11,279
188
17,833
59,126
184,897
6,707
135,694
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a
n.a

Cars: Model-wise domestic sales (Industry)


(nos)

Model

Mahindra & Mahindra Pvt


Verito
Ltd
Nissan Motor India Pvt Ltd
370Z
Micra
Sunny
Teana
Precision Cars India Private Ltd.3
911
Boxster
Cayman
Panamera
Renault
Fluence
Pulse
Scala
Skoda Auto India Pvt Ltd
Fabia
Laura
Rapid
Superb
Tata Motors Ltd
Indica
Indigo
Nano

Segment

2008-09

2009-10

2010-11

2011-12

2012-13

Super Compact

13,422

5,332

10,008

17,895

15,348

73
73
24
9
2
13
13,894
5,798
7,382
714
160,422
111,253
49,169
-

207
207
31
11
3
9
8
17,542
6,541
7,831
3,170
201,399
114,415
56,634
30,350

12,564
10
12,315
239
53
13
8
10
22
21,693
11,078
6,598
4,017
256,202
97,845
87,925
70,432

33,015
6
18,674
14,164
171
28
2
10
9
7
3,597
1,604
1,993
32,334
14,936
5,466
8,852
3,080
257,966
105,706
77,733
74,527

35,510
11,448
23,997
65
n.a
n.a
n.a
n.a
12,887
1,669
5,588
5,630
28,656
3,509
2,850
20,274
2,023
174,692
77,945
42,899
53,848

Coupe
Compact
Mid-Size
Premium
Coupe
Coupe
Coupe
Exotics
Executive
Compact
Mid-Size
Compact
Executive
Mid-Size
Premium
Compact
Compact
Micro

Cars: Model-wise domestic sales (Industry)


(nos)

Toyota Kirloskar Motor Ltd


Toyota Kirloskar Motor Ltd

Model

Segment

2008-09

2009-10

2010-11

2011-12

2012-13

8,581
10,134
19,226
90,969
72,000
8,581
10,134
19,226
90,969
72,000
Camry
Premium
513
367
298
140
389
Corolla
Executive
8,068
9,743
10,708
8,904
5,348
Etios
Super Compact
8,101
50,157
38,655
Liva
Compact
31,761
27,596
Prius
Premium
24
119
7
12
Volkswagen India Pvt Ltd
2,212
3,988
51,605
78,275
62,459
Beetle
Super Compact
179
398
59
1
Jetta
Executive
1,639
2,443
3,221
3,106
2,898
Passat
Premium
573
668
660
1,564
1,170
Phaeton
Luxury
42
14
1
Polo
Compact
698
28,904
39,465
34,678
Vento
Mid-Size
18,380
34,067
23,711
Volvo Car India
25
60
56
112
155
S60
Executive
23
96
99
S80
Premium
25
60
33
16
56
Total
1,222,142 1,527,506 1,980,591 2,015,671 1,872,518
Notes:1) Sales numbers of Audi, BMW, Mercedes from September 2011 onwards are not
available
2) Since SIAM have stopped reporting Audi, BMW and Mercedes sales figures thus the segmental figures may have
discrepancies
between SIAM and model-wise figures. In addition to this, SIAM doesnt report Volvo Car figures which would further add
to this.
3) Yearly figures may not match Yearly figures as reported by
SIAM
na: Not Available

Passenger car_annual

Cars : Playerwise Production


Player
2008-09
2009-10
2010-11
2011-12
2012-13
Audi
0
0
0
0
0
BMW India Pvt. Ltd.
2426
2765
1872
9620
4690
Daimlerchrysler India Ltd.
3065
3369
2564
6895
2793
Fiat India Ltd.
9079
26647
21896
17351
7941
Ford India Ltd.
24001
36567
109468
117345
108123
General Motors India Ltd.
44799
66034
91032
86830
68120
Hindustan Motors
7040
9063
7185
2941
3468
Honda SIEL Cars India Ltd.
46865
65735
60484
49459
73936
Hyundai Motors India Ltd.
502218
589536
594601
629258
638281
Mahindra & Mahindra Ltd.
14404
6225
11702
17849
15694
Maruti Suzuki India Ltd.
691335
920225
1105037
981245
978301
Nissan Motor India Pvt. Ltd.
0
0
74512
128936
136654
Renault
0
0
0
4464
14249
Skoda Auto India Pvt. Ltd
15164
10315
17539
34625
29659
Tata Motors
148103
164187
278387
278368
183513
Toyota Kirloskar Motor Ltd.
8196
9797
19277
91750
93850
Volkswagen
0
0
47264
79565
66707
Tata-JLR
0
0
200
107
Volkswagen-Porsche
0
0
0
Grand Total
1516695
1910465
2442820
2536701
2426086
Note:
1) Numbers for Audi, BMW and Mercedes are available only from April to September for
the years 2010-11 and 2011-12
2) Totals will not match SIAM numbers on account of restatement of data by SIAM

Alternative fuels

Rising prices of conventional fuel to boost demand for


alternate fuel vehicles
Average prices of conventional fuel, mainly petrol, have increased by
around 25 per cent cent in the last two years.
This sharp increase has prompted consumers to consider vehicles
running on alternate fuels like compressed natural gas (CNG) and
liquefied petroleum gas (LPG).
These alternatives not only reduce the average running cost of the car,
but also emit lower greenhouse gases as compared to conventional fuels
such as petrol and diesel.
The proportion of vehicles equipped with CNG/LPG fuel options are
estimated to have increased to about 8 per cent in 2012-13, from less than
1 per cent in 2006-07.
The penetration of such vehicles, however, continues to remain low
mainly because of the poor distribution infrastructure available in India.

Rising prices of conventional fuel to boost demand for


alternate fuel vehicles
CNG is considered to be the most environment friendly fuel
amongst all hydrocarbons as it emits the lowest amount of toxic
gases.
It is also priced at less than half that of petrol.
The basic engine characteristics of vehicles are retained while
converting it to run on CNG.
The vehicle is therefore capable of running either on petrol or CNG
at the flick of a switch.
However, the major disadvantage of CNG vehicles is the loss of
luggage space.
CNG cylinders take up a lot of storage space and generally have to
be placed in the boot of the car.

Rising prices of conventional fuel to boost demand for


alternate fuel vehicles
The body of the cylinders too has to be made of good grade steel
capable of enabling better life with higher wear and tear on
account of usage.
The cost of conversion too is another major determinant.
The conversion kit can cost from Rs 35,000 to Rs 50,000 but the
cost can be recovered from the fuel savings.
LPG is natural hydrocarbon fuel made up of propane and
butane, and is a by-product of the oil and gas industries.
The burning of LPG produces less carbon dioxide than
conventional fuels and is therefore less polluting.

Rising prices of conventional fuel to boost demand for


alternate fuel vehicles
Spiraling crude prices in the recent years are encouraging
automakers to come up with CNG/LPG variants of their major
selling models, as shown in the following table:
CNG and LPG variants

Comparing cost across fuel options

Comparing cost across fuel options


As evident from the above table, the running cost of a CNG
car is the lowest and that of the petrol car is the highest, at
current prices.
Although the running cost of CNG and LPG-run vehicles is
lower, their availability is a concern due to the lack of
adequate distribution outlets in the country.
There are only about 900 CNG filling stations and auto LPG
dispensing stations (ALDS) each spread across country.

Demand and supply situations of various fuels


India has a surplus refining capacity in both petrol and diesel,
although it is dependent on imports for crude oil.
India's oil marketing companies have also built up an extensive
fuel network for both petrol and diesel but as observed from the
graph below, aggregate availability of LPG is a concern.
In the case of CNG, both availability and distribution are
matters of concern.

LPG production and consumption

Motor Spirit production and consumption

High Speed Diesel production and consumption

Evolving technologies

Evolving technologies
Modern technology, in the form of hybrid technology, fuel cell
technology, electric vehicles etc has emerged in recent times.
Solar energy, methanol and hydrogen gas are also being
experimented as alternate fuels.

Hybrid technology
Hybrid vehicles run on at least two sources of power.
While an electric motor provides one source of power, a
different technology could be used to derive the other source.
An internal combustion engine, designed to run either on
petrol or diesel, typically provides the technology to procure
power.

Hybrid technology
The term, diesel-electric hybrid, refers to a Hybrid Electric Vehicle
(HEV), that combines the power of a diesel engine with an electric
motor.
The hybrid car typically gives 1.5-2.0 times greater fuel-efficiency and
lower emission than the conventional petrol engine.
Key features of gasoline hybrid vehicle are as follows:
Engine: The petrol engine is smaller compared to the normal version,
but offers better technology to increase fuel efficiency
and reduce emission.
Fuel tank: The fuel tank is a device to store petrol used for running
the engine.

Hybrid technology
Key features of gasoline hybrid vehicle are as follows:
Electric motor: The electric motor is very sophisticated.
Advanced electronics are used, which allow it to double up as a
motor and a generator. For example, whenever needed, it can
draw

energy

from

the

batteries

to

accelerate

the

car.

Simultaneously, it can act as a generator, slow down the car and


restore energy to batteries.
Generator : The generator is similar to an electric motor, but acts
only to produce electrical power.
Batteries : The batteries store energy needed to run the electric
motor. The electric motor on a hybrid car charges batteries with
energy and also draws energy from them.

Hybrid concepts
The hybrid engine runs on two concepts viz. parallel hybrid and
series hybrids:
Parallel hybrids : In a parallel hybrid concept, both the engines
(electric and gasoline) can provide power to turn on the
transmission, and the transmission powers the wheels.
Honda Insight and Toyota Prius are vehicles that run on this
concept.
Series hybrids : In a series hybrid concept, the petrol engine turns
the generator on, and the generator can either charge the batteries
or power the electric motor that drives the transmission.
Thus, the petrol engine or the electric motors can never directly
power the vehicle.

Hybrid concepts
The hybrid engine runs on two concepts viz. parallel hybrid and
series hybrids:
Globally, major players like Honda, BMW, Toyota, Kia, Range Rover, etc
are present in the hybrid vehicles segment.
Honda was the first automaker to launch a hybrid car - Civic, through its
Indian subsidiary, Honda Siel Cars India Ltd in June 2008.
However, due to weak customer response, the company discontinued
this car in April 2009.
Currently, the hybrid variant is available through imports as completely
built units (CBU).
In 2010, Toyota Kirloskar Motors also launched a hybrid car, Prius from
its global portfolio in India.
In 2012-13, the company was able to sell around 12 units of this model.
Toyota is also planning to offer a hybrid variant in its Etios model.

Hybrid concepts
The hybrid engine runs on two concepts viz. parallel hybrid and
series hybrids:
Mahindra & Mahindra (M&M) offers a micro hybrid technology,
which was developed along with auto parts maker Bosch Ltd, the
Indian arm of Germany's Bosch group.
M&M introduced this technology in its utility vehicles Scorpio,
Bolero and its latest XUV 500 , which has redefined technological
benchmarks.
M&M has sold 40,000-50,000 vehicles, since the technology was
first introduced in Scorpio in 2008.
(Micro hybrid technology automatically shuts down and restarts
the internal combustion engine to reduce the amount of time the
engine spends idling, thereby reducing fuel consumption and
emissions.

Hybrid concepts
The hybrid engine runs on two concepts viz. parallel hybrid and
series hybrids:
It shuts off the engine when a car is in its neutral gear and the
clutch is not depressed for 10-15 seconds.)
M&M is also planning to launch a complete hybrid vehicle
over the next three years.
Tata Motors Ltd too is working on a hybrid model.
The company had also showcased a diesel and electric hybrid
version of its Indigo Manza sedan at the Auto expo in January
2012.

Electric technology
Electricity can be used to power batteries and fuel cell vehicles.
Electric vehicles (EVs) use the electricity stored in a battery as fuel.
The electric motor converts electricity, usually from a battery pack
into mechanical power to turn the wheels.
However, EV batteries have limited storage capacity and must be
replenished regularly by plugging the vehicle into a recharging unit.
Compared to petrol cars, electric cars have electric motors instead of
internal combustion engines.
While internal combustion engines are powered by fuels, (diesel,
petrol etc), an electric engine receives power from a controller via
rechargeable batteries, which are powered by a common household
electric outlet.

Electric technology
An electric motor relies primarily on electromagnets.
By passing an electrical current through a wire loop, an electric
motor converts electrical energy into mechanical energy.
This conversion takes place because the wire loop produces a
magnetic field, which then transfers energy to the shaft, turns the
loop and creates mechanical energy.
This mechanical energy is then used to propel the vehicle forward.
Currently, there are three types of electric motors to choose from,
each with its own advantages and disadvantages.
1.

DC brushless motor type provides top speeds, but has


slower acceleration.

Electric technology
Currently, there are three types of electric motors to choose from,
each with its own advantages and disadvantages.
2.

AC induction motor enables a higher acceleration rate, though


its top speed is average. It also has the most expensive type of
motor.

3.

Permanent magnet DC motor enables higher torque and also


provides better acceleration and speed as compared to DC
brushless and AC induction motors.

Electric cars are also available with three types of batteries:


1.

Lead acid batteries: These are most cost-effective and


hence, very popular.

Electric cars are also available with three types of batteries:


2.

Nickel metal hydride batteries: Although costlier than lead


acid batteries, these perform better and require lesser space.

3.

Lithium ion batteries: With the steepest price tag, these are
less common than other types of batteries. However, they also
provide superior performance and range.

Globally, there are several players manufacturing electric vehicles like


Nissan, General Motors (GM), Ford, Mitsubishi, Toyota,Honda etc.

Although few players like Tata Motors and General Motors India had
showcased electric variants of their small cars at the various auto expo
shows in India, they have no plans to launch it over the short to
medium term.

Electric technology

In India, M&M is the only player manufacturing four-wheeler


EVs.

Currently, M&M has one model REVAi and it is expected to


launch an upgraded variant REVA NXR over the next 1-2
years.

In January 2013, Maruti announced plans to manufacture its first


hybrid vehicle Swift Range Extender.

Maruti has already started road-testing this vehicle, which runs


on an electric motor, and alternatively on petrol.

This model was developed by its parent, Suzuki Motor


Corporation and was unveiled at the Tokyo motor show in
November 2012.

Other evolving technologies


Other technologies such as fuel cell technology, cars based on

compressed air technology, solar energy, methanol and hydrogen


gas technology are also being used globally.
However, these technologies are still nascent in India.

Fuel cell technology: Fuel cell vehicles use a completely


different propulsion system from conventional vehicles, which
can be 2-3 times more efficient.

Unlike conventional vehicles, they produce no harmful exhaust


emissions.

Fuel cell vehicles can be fueled with pure hydrogen gas stored
directly in the vehicle or extracted from a secondary fuel, such
as methanol, ethanol, or natural gas that carries hydrogen.

Other evolving technologies

Fuel cell technology: These secondary fuels must first be converted into
hydrogen gas by an onboard device called a reformer.

This technology uses an electrochemical process to create energy using a


conversion device that converts chemicals like hydrogen and oxygen into
water and produces electricity in the process.

Fuel cell vehicles fueled with pure hydrogen emit no pollutants; they emit
only water and heat.

Vehicles that use secondary fuels and a reformer produce only small
amounts of air pollutants.

In order to increase efficiency, fuel cell vehicles can be equipped with other
advanced technologies such as regenerative braking systems that capture
the energy lost during braking and store it in a large battery.

These vehicles are still at early stages of development. Research and


development efforts are bringing them closer to commercialisation.

Other evolving technologies


Compressed Air technology : The engine that is installed in a
'compressed air car' uses compressed air that is stored in the car's
tank at a pressure as high as 4,500 psi (pressure per square inch).
The technology used by air car engines is totally different from
that used in conventional fuel cars.
They use the pressure generated by the expansion of compressed
air to run their pistons.
This technology is non-polluting, as air is the only product that is
used by the engine to produce power and the waste material is
the air itself.
Under this technology, ambient air is compressed in the vehicle's
tank.

Other evolving technologies


Compressed Air technology : The air coming from the high pressure
tank crosses a pressure reducer.
It is then used in a system of expansion with work, consisting of an
active chamber and an expansion cylinder.
This new thermodynamic cycle consists of the following three steps:
1. The feeding of the charge cylinder (or the active chamber) at constant
pressure. This stage is performed at constant pressure and
temperature, It produces significant work on the crankshaft and
makes it possible to double the efficiency of a conventional expansion.
2. Expansion of the volume of air created by the active chamber in the
expansion cylinder.
3. Venting of exhaust

Other evolving technologies


The energy released through this cycle is transferred to the wheels
through the gear box.
At present, this technology is used mainly by a Luxemburg-based
company Motor Development International (MDI).
Tata Motors has also announced plans to launch such a car in
association with MDI.
Methanol: Methanol, also known as wood alcohol, has been used
as an alternative fuel in flexible fuel vehicles that run on M85 (a
blend of 85 per cent methanol and 15 per cent petrol).
However, it is not commonly used at present because auto
manufacturers are no longer producing methanol-powered
vehicles.
In the future, methanol could be used for providing the hydrogen
necessary to power fuel cell vehicles.

Other evolving technologies


Hydrogen: Hydrogen gas is expected to play an important role in
developing sustainable transportation, because it can be produced in
virtually unlimited quantities using renewable resources.
Pure hydrogen and hydrogen mixed with natural gas (hythane) have been
used effectively to power automobiles.
Hydrogen is the cleanest of all alternative fuels, as it burns with nearly zero
emissions in an internal combustion engine and emits only water vapor and
heat in an electro-mechanical fuel cell.
Hydrogen vehicles are being developed in many forms by several large car
manufacturers.
Some vehicles powered by hydrogen are in demonstration fleets, while
others like the Honda FCX Clarity and Chevy Equinox Fuel Cell are being
driven by consumers.

Other evolving technologies


Solar energy : Solar energy technologies use sunlight to produce heat
and electricity.
Electricity produced by solar energy through photovoltaic technologies
can be used in electric vehicles.
The market for pure solar powered vehicles is limited (used for
competition and demonstration) and none of the vehicle manufacturers
are planning to manufacture these vehicles on a commercial scale.
Cornstarch

Tata

Motor's

research

and

development

(R&D)

department is working on integrating cornstarch, the non-flammable


and non-toxic material, in making body parts of the vehicle, to improve
safety aspects.
Tata Motors claimed that cornstarch can increase the crash resistance of
cars and reduce the effects of an accident on occupants.

Key global markets-overall

Global car sales growth remained weak in 2011


The global cars industry grew marginally by 3.3 per cent (y-o-y) to about
47.8 million units in 2011.
Three regions - Asia, Western Europe and North America - together
contributed above 80 per cent of total car sales, globally.
This was 1.5 per cent lower than 2010 levels, mainly due to weak
performance of the Western European market.
In 2010, the global cars industry grew by 10.1 per cent (y-o-y) to about 48.6
million units with Asia (contributing nearly 40 per cent to the global car
industry) posting a sharp growth of 21.8 per cent (y-o-y).
Western Europe (contributing 29 per cent to the global

car market),

however, declined by 0.5 per cent (y-o-y) on account of weak economic


growth.

Global car sales growth remained weak in 2011


Africa rose the sharpest by 23 per cent (y-o-y), followed by Eastern
Europe at 18.8 per cent (y-o-y), South America at 14.6 per cent (y-oy), Oceania at 9.3 per cent (y-o-y) and North America at 4 per cent
(y-o-y).
Cars - Region-wise global sales

Note: Data for 2012 is not available.

Cars - Region-wise global sales


During 2011, passenger car sales in Eastern Europe posted sharp growth of
25.4 per cent (y-o-y), followed by South America and North America, where
sales rose by 8.1 per cent and 7.7 per cent (y-o-y), Sales in North America
rebounded strongly over a low base, however, remained below pre-crisis
levels.
Sales in Africa, which grew at a phenomenal pace of 21.8 per cent (y-o-y) in
2010 over a low base of 2009, declined marginally by 1.7 per cent in (y-o-y)
in 2011.
Car sales in Oceania also declined by 5.2 per cent (y-o-y).
Growth in the passenger car market in Asia remained muted in 2011, since
growth in China (6.7 per cent) and that in India (5.5 per cent), was offset by
a sharp decline of 16.3 per cent in Japan.
Car sales in Western Europe too continued to decline due to a weak macroeconomic environment.

Cars - Region-wise growth (y-o-y)

Note: Data for 2011 is not available.

Cars - Region-wise growth (y-o-y)


Analysis of key markets in Europe and North America, based on
data released for 2012, reveals that the North American markets
have continued to show a strong rebound in volumes.
However, volumes still remain below pre-crisis levels.
The Japanese passenger car market witnessed a strong revival in
2012 over a Tsunami-led downturn in 2011, and witnessed robust
growth in volumes.

Key global markets_US

US passenger car sales reached five-year high in 2012


After the global financial turmoil in 2008, passenger car sales in
the US started recovering consistently, albeit at a slower pace.
Passenger car sales recorded a five-year high and grew by 16.9
per cent (y-o-y) in 2012.
Car volumes stood at 7.2 million units, but have yet not crossed
pre-crisis levels.
Rising demand for mid-sized and small cars was the key growth
driver.
However, over a five year period (2007 to 2012), passenger car
sales in the US declined by 0.9 per cent.

Trend in US passenger car sales

Market share of key players

Note: Data for 2012 is not available.

Market share of key players


In 2011, the three leading players in the US automobile market
viz., General Motors, Ford Motor and Chrysler LLC accounted
for around 45 per cent of overall sales. Market shares of Toyota
and Honda declined by 2 per cent from the 2010 level.
Both suffered mainly on the back of production disruptions,
due to natural earthquakes in Japan and Thailand.
Market shares of both Chrysler LLC and General Motors rose
marginally by 1 per cent.
Market shares of Ford and Nissan remain unchanged in 2011
over the previous year.

Western Europe car sales recorded all-time low in past 20


years .....
Western Europe comprises all nations from the European
Union (EU) - 15 group and countries, which have signed the
European Free Trade Agreement (EFTA) viz, Iceland, Norway
and Switzerland.
In 2012, new passenger car registrations in Western Europe
declined by 8.1 per cent (y-o-y) and recorded a 20-year low.
The ongoing economic uncertainty surrounding European
nations have weakened buyer sentiments, leading to a sharp
contraction in car sales.
Even during the first half of 2013, new passenger car
registrations in Western Europe declined by 6.6 per cent (y-o-y)
(from January to June 2013).

Car sales decline in 2012

Of the top 5 markets, only UK market managed to grow


Performance of key countries

Of the top 5 markets, only UK market managed to grow


Performance of key countries
Germany, Italy, France, Spain and the UK together accounted
for about 78 per cent of the total Western European car market
in 2012.
Among these, only UK managed to grow by 5.3 per cent (y-o-y).
Sales in Spain fell by 19.9 per cent during the year, while sales in
France and Italy fell by 13.9 per cent and 13.4 per cent
respectively.
During the first half of 2013 as well, car sales in the UK
expanded by 10 per cent (y-o-y), while all other markets
experienced a downturn.
Sales in France, Italy, Germany and Spain dropped by 11.2 per
cent, 10.3 per cent, 8.1 per cent and 4.9 per cent respectively.

Share of small cars continued to grow


Segment-wise break-up of cars sales

Sales in the small and lower-medium segment together contributed to around


68.9 per cent to total car sales in 2012, compared to 70 per cent in 2011.

Share of diesel cars fell marginally


Western Europe - Share of diesel cars

During 2012, diesel models accounted for 55.2 per cent of all the new cars sold. Diesel
penetration was around 30 per cent (of the total car fleet) in the five main markets of
Europe, viz, Germany, Italy, France, UK and Spain.

Volkswagen constitutes nearly one-fourth of the market


Manufacturer-wise break-up of car sales in 2012

In 2012, the Volkswagen Group and PSA Group remained top manufacturers and
together contributed 36.5 per cent to total passenger car sales. Renault Group and
General Motors contributed 8.2 per cent and 8 per cent, followed by Ford, BMW Group
and Daimler.

Key global markets-western europe

Western Europe car sales recorded all-time low in past 20 years .....
Western Europe comprises all nations from the European Union
(EU) - 15 group and countries, which have signed the European Free
Trade Agreement (EFTA) viz, Iceland, Norway and Switzerland.
In 2012, new passenger car registrations in Western Europe declined
by 8.1 per cent (y-o-y) and recorded a 20-year low.
The ongoing economic uncertainty surrounding European nations
have weakened buyer sentiments, leading to a sharp contraction in
car sales.
Even during the first half of 2013, new passenger car registrations in
Western Europe declined by 6.6 per cent (y-o-y) (from January to
June 2013).

Car sales decline in 2012

Of the top 5 markets, only UK market managed to grow


Performance of key countries

Of the top 5 markets, only UK market managed to grow


Performance of key countries
Germany, Italy, France, Spain and the UK together accounted for
about 78 per cent of the total Western European car market in 2012.
Among these, only UK managed to grow by 5.3 per cent (y-o-y).
Sales in Spain fell by 19.9 per cent during the year, while sales in
France and Italy fell by 13.9 per cent and 13.4 per cent respectively
During the first half of 2013 as well, car sales in the UK expanded by
10 per cent (y-o-y), while all other markets experienced a downturn.
Sales in France, Italy, Germany and Spain dropped by 11.2 per cent,
10.3 per cent, 8.1 per cent and 4.9 per cent respectively.

Share of small cars continued to grow


Segment-wise break-up of cars sales

Sales in the small and lower-medium segment together contributed to around 68.9 per cent to
total car sales in 2012, compared to 70 per cent in 2011.

Share of diesel cars fell marginally


Western Europe - Share of diesel cars

During 2012, diesel models accounted for 55.2 per cent of all the new cars sold. Diesel
penetration was around 30 per cent (of the total car fleet) in the five main markets of Europe,
viz, Germany, Italy, France, UK and Spain.

Volkswagen constitutes nearly one-fourth of the market


Manufacturer-wise break-up of car sales in 2012

Volkswagen constitutes nearly one-fourth of the market


Manufacturer-wise break-up of car sales in 2012
In 2012, the Volkswagen Group and PSA Group remained top
manufacturers and together contributed 36.5 per cent to total
passenger car sales.
Renault Group and General Motors contributed 8.2 per cent and 8
per cent, followed by Ford, BMW Group and Daimler.

Key global markets-china

Passenger vehicle sales growth in China remained


moderate in 2012
China is the world's largest producer of passenger vehicles (PVs),
surpassing the US in 2008 and Japan in 2009.
As of 2012, PV sales contributes more than 80 per cent of China's
total automobile sales.
The PV market in China has more than 100 indigenous
manufacturers assembling vehicles.
Due to government restrictions, all foreign manufacturers
assemble vehicles in China under their brands through joint
ventures with Chinese state-owned enterprises.

Trend in foreign manufacturer's share in China's passenger


vehicle market

China's PV sales grew by a modest 7 per cent y-o-y in 2012, which was slightly
higher than the y-o-y growth rate of 5 per cent in 2011. Growth in 2012 was
mainly driven by healthy y-o-y growth of sports utility vehicles (SUVs), followed
by a growth of 5.7 per cent in sedans.

Segment-wise passenger car sales mix

Segment-wise passenger car sales mix


Post liberalisation of the Chinese economy in 2001, the PV market was
growing at a strong pace till the global economic downturn.
However, following the financial turmoil in 2008, the PV market in China
was significantly impacted, and posted a mere 7 per cent y-o-y growth.
In order to boost passenger car sales, the Chinese government introduced a
stimulus package in 2009:
1. The purchase tax on light passenger cars (displacement volume less than
1.6 liters) was reduced by 50 per cent;
2. One-time subsidy programme (RMB 5 billion) was implemented for rural
residents on the purchase of light vehicles or mini passenger cars
(displacement volume below 1.3 litres);
3. An additional auto trade-in subsidy programme was announced to
accelerate the replacement of outdated vehicles with high emissions.

Segment-wise passenger car sales mix


These stimulus policies were implemented in the rural as well as
urban areas, which benefited first-time buyers along with existing
buyers.
As a result, PV sales rose by a robust 53 per cent and 33 per cent yo-y in 2009 and 2010, respectively.
However, two years of strong PV sales led to a traffic congestion
and increased concerns of air pollution in large and medium-sized
cities in China.
Hence, in late 2010, the government phased out subsidies, rebates
and a sales tax break on vehicle purchases.
To prevent overheating and tackle rising inflation, the government
also tighten credit policies and put restrictions on new licences in
2011.

Segment-wise passenger car sales mix


The removal of incentives forced consumers to turn away from
local brands, following which the proportion of domestic brands
in total PV sales declined in 2011.
PV sales growth decelerated to 5 per cent in 2011 and remained
moderate in 2012.

Trend in China's passenger vehicle sales

For the first nine months of 2013, PV sales in China rose marginally y-o-y to 12.8
million, mainly due to high sales growth of utility vehicles with the revival in
demand from Japanese branded passenger cars.

Launch of Honda Amaze

Honda launched Amaze in India


Honda launched its new sub-4 metre car Amaze in the Indian
market.
The car is Honda's first car in India to sport a diesel engine.
With the launch of its new car, the company has discontinued
its existing premium hatchback Jazz and is expected to launch
the new Jazz in 2014-15.
Honda's new i-DTEC light weight diesel engine with a claimed
mileage of 25.8 kpl which makes it the countrys most fuel
efficient car.
In terms of claimed mileage, the car exceeds Maruti Swift Dzire
and Toyota Etios which claim a mileage of close to 23.5 kpl.

Technical specifications

Technical specifications
On the technical front, Honda Amaze compares well to most
other cars in the segment and especially so with respect to
mileage and torque (diesel model).
The boot space is considerable when compared to the small
version of Swift Dzire helping it compete effectively.
However, as per several published reviews, the diesel engine
is a bit noisy.
The interiors are similar to Brio and hence may not find favour
with some buyers.

Competition to increase owing to aggressive pricing by Honda


Price comparison across models

Competition to increase owing to aggressive pricing by Honda


Price comparison across models
Amaze scores well on the pricing front. In terms of pricing, Honda
Amaze competes aggressively with the segment incumbent (Swift
Dzire) with the base petrol variant priced at Rs. 5.1 lakhs exshowroom Mumbai (same as Swift Dzire) and diesel variant priced
marginally lower than Swift Dzire at Rs. 6.1 lakhs.
Additionally, the base petrol variant provides features such as
front and rear power windows and central locking which are amiss
in base variant of Swift Dzire.
The base diesel variant of Honda Amaze also scores over that of
Swift Dzire despite lower pricing as it provides central locking and
ABS not available in the latter.

Competition to increase owing to aggressive pricing by Honda


Price comparison across models
However, we believe availability of another lower priced model
in the segment will pose a formidable competition to Toyota
Etios and M&M Verito in addition to challenging Swift Dzire.

Our view
Though Amaze is a perfect competitor to Swift Dzire, we
expect it to eat into the share of Toyota Etios and M&M Verito.
Demand for Swift Dzire too will be impacted, however, to a
lesser extent due to 's superior brand Maruti positioning and
reach.

Our view
Given weak demand for Honda's petrol cars, City and Brio, we
expect that company is not likely to face significant bottlenecks
in terms of capacity in the near term.
However, with an expectation of decline in petrol prices, we
expect waiting period to prevail in the short term, should sales
of its petrol fleet recover in line with an expected recovery in
sales of petrol cars.
Honda's current installed capacity in India is currently 120,000
units.
We expect that with the current line-up of models, the
company would target sales of 3,000-3,500 units per month.

Dealer Interactions:
The company has reported wholesale sales of over 2,000 units
during March.
On an average, dealers are getting about 20 enquiries per day.
A few of them have also reported pre bookings ranging from 70100 from April 01, 2013 and are expecting a waiting period
of 15-20 days post launch.
So far, the company is estimated to have received bookings for
over 6,500 units.

Super compact segment recorded a growth of 21 per cent in


2012-13
The super compact segment (as per SIAM's classification)
includes cars with seats upto-5, length normally between 4000
4250 mm, body style-sedan/estate/hatch/notchback, engine
displacement normally upto 1.6 litre.
Sales in this segment form nearly 12 per cent of total sales and
they grew by a whopping 21 per cent in 2012-13 despite car
sales growth ending the year in red.

Swift Dizre constitutes three-fourths of the segment sales

Swift Dizre constitutes three-fourths of the segment sales


Excise duty on sedans in India is upwards of 24.7 per cent
depending upon its size and engine capacity.
However, cars with length not exceeding 4,000 mm and engine
capacity not exceeding 1,200 cc for petrol and 1,500 cc for diesel
enjoy concessional duty of 12.4 per cent.
For availing of the excise duty benefit, Maruti Suzuki had
launched a sub-4m version of its existing model Swift Dzire in
2012.
As Honda Amaze too falls under this category, it enjoys a
concessional excise duty of 12.4 per cent enabling it to gain a
price advantage over most other models in the segment.

Swift Dizre constitutes three-fourths of the segment sales


Maruti Suzuki Swift is the largest selling car in this segment
clocking 13,000-15,000 units on an average with Etios being in
the second spot with sales of 3,000-4,000 units per month.
Both Mahindra and Mahindra's (M&M) Verito and Hyundai
Motors India Limited's (HMIL) Accent command a very low
share (nearly 7 per cent and 1 per cent) in segment's total sales.

About Honda
Honda Cars India Limited, a subsidiary of Honda Motor Co
Limited, Japan; first set up shop in India in 1995.
The companys product range include Honda Brio, Honda Jazz,
Honda City, Honda Civic, Honda All-New CR-V and Honda
Accord which are produced at the Greater Noida facility.
The Noida facility was set up in 1997 and has a capacity of 1.2
lakh units spread over 150 acres.
The companys second manufacturing facility is in Tapukara,
Rajasthan.
This facility is spread over 450 acres and currently has a Power
train and Press shop.
The first phase of this facility was inaugurated in September
2008.

About Honda
The company recently announced an investment of Rs 25 billion at
its Rajasthan plant to build a new assembly line of 1.2 lakh units, a
new diesel engine component forging line and a Forging plant.
The company registered an annual growth of 35 per cent by selling
an all time high volume of 73,483 units during Apr 2012 Mar 2013
as compared to 54,427 units in the corresponding period last year.
The company also exported a total volume of 2,622 units during the
fiscal year 2012-13.
The company registered these volumes through a sales and
distribution network of 150 facilities spread across 97 cities.
The network stood at 135 facilities in 83 cities in 2011-12. Honda
commands a market share 2.8 per cent in total passenger vehicle
sales.

Launch of Ford Ecosport

Ford EcoSport to make a mark in UV segment


Ford India launched its new sub-4 metre compact utility vehicle,
the Ford EcoSport, on June 27, 2013.
The company has invested $142 million (~Rs 8 billion) in its
Chennai facility to support production of the EcoSport.
Ecoboost technology makes India debut
The EcoSport has been launched with three engine options a 1-litre
petrol engine with eco-boost technology (manual transmission), another
1.5-litre petrol model (manual and automatic transmission) and a 1.5litre diesel engine (manual transmission).
The turbo-charged direct injection 1-litre petrol engine with Ecoboost
technology has a three-cylinder 1,000 cc displacement.
It is expected to match the performance of a 1.6-litre engine with 120
bhp and 170 Nm of torque.

Ecoboost technology makes India debut


In India, the EcoSport is manufactured locally to the extent of ~65 per cent
while the Ecoboost engine is imported from Romania.
The company expects to achieve a localisation of 80 per cent over the next
few years.
EcoSport well placed to compete with existing models
Ford EcoSport compares well with most other compact utility vehicles on
the technical front (Please refer to the annexure for technical details).
Urbane in look and feel, the car is expected to compete with Renault's
Duster along with other technical details) similarly priced utility vehicles
i.e. Maruti's Ertiga and M&M's Quanto.
The 1-litre EcoBoost petrol engine could prove to be a game changer for
Ford in India.
In Brazil, the EcoSport has been providing tough competition to Renault's
Duster by outselling it month over month since its launch in 2012.

EcoSport well placed to compete with existing models


EcoSport's variants with 1-litre petrol engine and 1.5 litre diesel engine are
expected to be eligible for concessional excise duty of 12 per cent owing to
their length and engine capacity.
In India, the excise duty on sedans is generally upwards of 24 per cent.
However, cars and utility vehicles with length not exceeding 4,000 mm and
engine capacity not exceeding 1,200 cc for petrol and 1,500 cc for diesel,
enjoy a concessional duty of 12 per cent.
This will give EcoSport a competitive advantage in terms of pricing over
most other models in the segment.
EcoSport has been priced attractively in the range of Rs 5.6-7.6 lakh for the
1.5-litre petrol model and Rs 8-8.4 lakh for the 1.0 litre diesel model.
Thus, the company is well-placed to take on competition from peers on
account of attractive pricing and strong technical specifications.
The diesel model has been priced at Rs.7-9.4 lakhs.

EcoSport domestic sales volumes expected to be similar to


those of Duster

Note: 1) The size of the bubble and numbers indicated along with model names represent
average units sold per month in 2012-13
2) For Ford EcoSport, the size of the bubble and the numbers indicated along with the model
name represent average units projected to be sold per m
3) Prices are ex-showroom Mumbai and represent prices of base/cheapest variant

EcoSport domestic sales volumes expected to be similar to


those of Duster
CRISIL Research expects EcoSport to provide strong competition
to other players in the sub-15 lakh UV segment as well as
similarly priced sedans.
Renault's Duster, which currently sells 4,000-5,000 units each
month, could be the most impacted.
The Ecoboost petrol engine and competitive pricing would be its
unique selling proposition, especially as the difference between
petrol and diesel has been narrowing.
While demand would be strong, we expect sales of the EcoSport
to be limited to 4,000-5,000 units per month in 2013-14,
considering Fords production capacity.
This would lead to longer waiting periods for the model.

EcoSport domestic sales volumes expected to be similar to


those of Duster
Currently, Ford has an installed capacity of 200,000 units on a
three-shift basis at its Chennai plant, which runs at a capacity
utilisation of over 80 per cent (assuming the plant operates on a
two-shift basis).
If the company continues to work on two shifts and we consider
minimal growth in production of other vehicles, Ford will be able
to produce about 2,000 units of Ford EcoSport per month.
Sales of EcoSport are expected to be higher as weak domestic
demand will limit growth in the sales of its existing models.
Moreover, Ford also has the option to operate on a three-shift basis.
Hence, we believe, that the company will be able to target
production of 4,000 - 5,000 units of EcoSport per month in 2013-14.

New UV launches drove growth in 2012-13


New models constituted 70 per cent of incremental sales in 2012-13

New UV launches drove growth in 2012-13


New models constituted 70 per cent of incremental sales in 2012-13
UV sales grew at a phenomenal pace of 52 per cent even as car
sales declined by 7 per cent y-o-y in 2012-13.
During the year, the share of UVs in total domestic passenger
vehicle sales increased to 21 per cent from 10 per cent in 2010-11.
This growth can be attributed to the host of new model launches
(which garnered significant consumer interest) and ample
availability of diesel models.
Sales of new models like the Duster, Ertiga and Quanto
constituted about 17 per cent of domestic UV sales and 70 per
cent of incremental domestic UV sales during 2012-13.
UV sales grew at a phenomenal pace of 52 per cent even as car
sales declined by 7 per cent y-o-y in 2012-13.

New UV launches drove growth in 2012-13


New models constituted 70 per cent of incremental sales in 2012-13
During the year, the share of UVs in total domestic passenger
vehicle sales increased to 21 per cent from 10 per cent in 2010-11.
This growth can be attributed to the host of new model launches
(which garnered significant consumer interest) and ample
availability of diesel models.
Sales of new models like the Duster, Ertiga and Quanto
constituted about 17 per cent of domestic UV sales and 70 per
cent of incremental domestic UV sales during 2012-13.

Growth in sedan segment moderates as consumers turn to UVs


Fall in sedan sales growth from second half of 2012-13

Growth in sedan segment moderates as consumers turn to UVs


Fall in sedan sales growth from second half of 2012-13
New launches in the sub-15 lakh UV segment and relatively fewer
launches in the sedan segment made UVs the preferred choice of
buyers in 2011-12 and 2012-13.
Coupled with the novelty factor, attractive pricing of these models
made them extremely competitive to mid-size sedans (Volkswagen
Vento, Ford Fiesta, Hyundai Verna, etc).
Thus, demand for UVs increased at the cost of demand for sedans.
On account of this cannibalisation, growth in the sedan segment
moderated significantly during the year (3 per cent growth against
20 per cent in 2011-12).
With the introduction of Ford EcoSport, we expect mid-size sedans
to continue to face the heat.

Growth in sedan segment moderates as consumers turn to UVs


Fall in sedan sales growth from second half of 2012-13
However, the overall growth rate of utility vehicles would moderate
significantly in 2013-14 (6-8 per cent) from the levels of 2012-13, given
the higher base and fewer new launches expected.
About Ford
Established in 1995, Ford India Pvt Ltd (FIPL) manufactures and distributes
automobiles and engines from its production facilities at Maraimalai Nagar,
near Chennai.
The company's models like the Endeavour, Fiesta and Figo are
manufactured at its production facility in Chennai (installed capacity of
200,000 units for vehicles and 340,000 units for engines).
FIPL is a wholly owned subsidiary of Ford Motor Company, USA. It is the
sixth-largest carmaker in India after Maruti Suzuki, Hyundai, Tata,
Mahindra and Chevrolet, with a market share of 3 per cent in 2012-13.

About Ford
In March 2012, FIPL announced its intention to set up a second plant in
India at Sanand in Gujarat with an investment of Rs 45 billion.
The plant is expected to have an initial capacity of 240,000 cars and
270,000 engines and is likely to be operational in 2014.
By 2014, FIPL's Chennai and Sanand plants will have a combined
capacity of 440,000 cars and 610,000 engines, annually.
In 2010-11, Ford had announced that it would launch eight compact
cars in India by 2015.
Ford India is expected to launch Ford Focus 2WD and B Max by the
end of 2013-14. In 2012-13, Ford India's total domestic passenger vehicle
sales declined by 17 per cent (y-o-y).
However, FIPL's exports rose by 15 per cent y-o-y.

About Ford
Over 2007-08 to 2012-13, the company's domestic sales grew at a
CAGR of 18 per cent, while exports registered a whopping growth
of 70 per cent.
Currently, FIPL exports 40 per cent of its engine production and
25 per cent of its car production to 35 countries like South Africa,
Nepal, Mexico, Kenya, Bahrain, Angola, Bermuda, Ghana, Iraq,
Liberia, Lebanon, Malawi, Madagascar, Mauritius, Nigeria,
Senegal, Tanzania, the UAE, Zambia, Zimbabwe etc.
Its share in India's total passenger vehicle exports has increased
from 6 per cent in 2007-08 to 28 per cent in 2012-13.
Ford plans to make India its export hub and sell its vehicles in
more than 50 countries over a period of time.

Annexure
Technical specifications

Fuel Mix in passenger vehicles

Almost one out of two cars & UVs sold to run on diesel by
2015-16
Demand for diesel cars and UVs is expected to increase by a CAGR of 20
per cent to reach about 2.2 million vehicles in 2015-16 from about 0.9
million vehicles in 2010-11.
The increasing differential between the petrol and diesel prices will
drive dieselisation, taking the share of diesel models to 44-46 per cent of
total car & UV sales over the next 5 years.
Rate of dieselisation will be higher in the car segment with diesel
contributing to 38-40 per cent of domestic car sales by 2015-16 from 27
per cent at present.
In the utility vehicles segment, the share of diesel vehicles is expected to
remain constant at around 95-97 per cent, while in the C-van segment, it
is expected to increase marginally to 25-26 per cent from 24 per cent
(estimates) in 2010-11.

Almost one out of two cars & UVs sold to run on diesel by
2015-16
Petrol prices have increased by 37 per cent since its de regulation
while diesel prices have increased by around 15 per cent during
the same period.
The difference between petrol and diesel now stands at Rs 26.
Owing to the increasing differential in the prices of petrol and
diesel, the proportion of diesel car sales have gone up to nearly
30 per cent in the 2011-12 from around 26-27 per cent in 2010-11.
Simultaneously, the launch of small cars fitted with diesel
engines by the OEMs will aid the sales of diesel models.

Proportion of petrol, diesel and CNG in passenger vehicles


(cars+utility vehicles)

Dieselisation to grow at a faster rate in the small car space


Dieselisation to increase to 60 per cent in the sedan segment
Traditionally, dieselisation in the sedan segment has been higher
than in the small car segment.
Proportion of diesel sedans in domestic sedan sales increased to
more than 50 per cent in 2010-11 from around 31 per cent in
2005-06. By 2015-16, we expect dieselisation in sedans to increase
to almost 60 per cent .
Over one-out-of-three small cars sold to run on diesel by 2015-16
In the small car segment, the share of diesel vehicles in total
sales increased at a slow pace from 19 per cent in 2005-06 to
around 22-23 per cent in 2010-11.

Dieselisation to grow at a faster rate in the small car space


Over one-out-of-three small cars sold to run on diesel by 2015-16
The slow growth in dieselisation was partly on account of nonavailability of diesel variants among the small cars models of Maruti
and Hyundai, the top 2 players in the small car segment.
However, with the entry of several OEMs in the small car segment,
the share of diesel cars in total sales is expected to increase.
Introduction of diesel variants of popular models like Ford Figo,
Nissan Micra, Chevrolet Beat and Volkswagen Polo has provided
consumers with the choice of owning a diesel car even in the
compact car segment.
Driven by competition from these OEMs, Maruti and Hyundai are
also expected to provide a diesel option on their existing as well as
proposed models.

Dieselisation to grow at a faster rate in the small car space


Over one-out-of-three small cars sold to run on diesel by 2015-16
As a result, we expect the share of diesel cars in the small car
segment to go up to 33-35 per cent by 2015-16.
Proportion of diesel sales in small cars to grow at a faster rate.

Difference between petrol and diesel engines


Diesel and petrol engines use different technologies with fuel
mixing and compressing techniques being different in both engine
types.
Differences in these techniques ensure higher compression ratios
for diesel engines.
Though diesel engines are heavy, their fuel efficiency is higher
due to higher energy density (contains about 15 per cent more
energy by volume).
While environmentalists have expressed their concerns on the
problems caused by use of diesel as vehicle fuel, agencies like
ACEA believe that diesel engines use lesser fuel owing to higher
fuel efficiency and also lead to lower carbon emissions as
compared to petrol engines.

Difference between petrol and diesel engines


In the past, diesel engines were noisy and gave out foul odour.
However, improvement in technology over the years has led to
the development of sophisticated diesel engines leading to
increasing acceptance of diesel as a car fuel.
Petrol versus diesel: Cost Economics
Difference in prices of petrol and diesel has led to higher dieselisation
Since its deregulation in June 2010, petrol prices have increased by
37 per cent and are currently at Rs 71 (Mumbai prices) to the litre.
During the same period, prices of diesel have increased only once,
by 15 per cent (to Rs 45.84 Mumbai).
As a result, the gap between the prices of the two fuels has widened
significantly to Rs 26 per litre, which has led to the preference for
diesel cars among consumers.

Difference between the prices of petrol and diesel is very high

Running cost of diesel is 22 per cent less than that of petrol


Running cost is a function of mileage and the distance travelled.
Assuming the distance travelled by a petrol car and a diesel car to
be the same, the cost of running a diesel car is 22 per cent lower
than that of a petrol car.
This cost advantage accrues from a combination of lower price of
fuel and higher mileage offered by diesel cars.
Mileage of a diesel car is around 25 per cent higher than that of a
petrol car.

Running cost of diesel is 22 per cent less than that of petrol


The following exhibit shows savings of Rs 19 per km if diesel is
used and Rs 26 per kilometer if CNG is used.

Break even is achieved faster at higher distances


Cost of ownership of a car includes interest cost, fuel cost,
insurance and maintenance cost.
Diesel cars typically cost Rs 70,000-100,000 more than petrol cars.
Higher capital expenditure entails higher insurance and interest
costs.
Maintenance costs are also higher for a diesel car.
However, these higher costs are partly offset by the savings in
fuel costs with diesel being priced lower than petrol.
Assuming distance travelled of 50 km per day (18,000 km per
annum), the additional capital cost incurred on diesel cars can be
recovered through savings in running costs over a period of 3.54.0 years.

Break even is achieved faster at higher distances


If we increase the distance travelled per year to 20,000 km, this
will be achieved faster at around 2-3 years.
Similarly, at 25,000-30,000 km p.a., the owner of a diesel vehicle
will cover the extra cost incurred on the purchase of a diesel car
(compared to a petrol vehicle) in just 1.5 years through savings in
fuel costs.

Benefits of lower operating cost of diesel leads to break even


in 3.5-4 years

OEMs keen on setting up diesel capacities


The competitive scenario in the market has changed over the last
of couple of years with OEMs other than the top 3 players - Maruti
Suzuki, Hyundai and Tata Motors - entering the Indian markets.
Further, their foray into the most lucrative compact and sub
compact car segments changed the fuel dynamics in the industry.
In 2010-11, while the total number of models in the small car
segment doubled from 11 in 2005-06 to 24, the number of models
with a diesel variant tripled from 3 to 9.
For several models, diesel forms 70 per cent of the demand as
against 50-55 per cent a year ago.

OEMs keen on setting up diesel capacities


To meet the rising demand, OEMs have started to focus on
increasing capacities of diesel engines:
Maruti has announced its plans to increase capacities for diesel
engines to 0.29 mn from the current level of 0.25 mn at its diesel
engine plant in Manesar till 2013.
Ford has invested Rs 3.2 billion to expand its power train facility in
Chennai to 0.33 million units from 0.25 million units due to
constraints in its capacities to meet the demand for diesel variants of
Ford Figo.
General Motors commissioned a flexi-engine plant in Talegaon with
an initial capacity of 0.16 million units, scalable to 0.3 million units in
November, 2010.

OEMs keen on setting up diesel capacities


To meet the rising demand, OEMs have started to focus on increasing
capacities of diesel engines:
This plant can produce both petrol and diesel engine and capacities can
be adjusted to meet the rising demand for diesel.
GM introduced the diesel variant of Chevrolet Beat early 2011-12, the
lowest priced diesel vehicle in the compact segment that uses diesel
engines manufactured in this plant.
Hyundai is also considering setting up a diesel engine plant in India at
an investment of Rs 4 billion.
This will improve localisation of diesel engine components for existing
models leading to reduction in their prices.

OEMs keen on setting up diesel capacities


In addition to this, it is also thinking of launching diesel variants of existing
models like the i10 and Santro to counter competition from other models in
the segment.
The only uncertainty stopping players from ramping up capacities for
diesel engines quickly is the fear of diesel deregulation or any differential
tax/levy on diesel variants by the government (i.e. higher excise
duty/registration charges on diesel cars).
These measures, if implemented, will either make diesel costlier or lead to
an increase in the prices of diesel cars.
Even if the government increases excise duties on diesel cars or reduces
subsidies on the fuel, we expect diesel penetration to be not less than 40 per
cent by 2015-16 as the differential in the cost of ownership will continue to
remain high.

CNG/LPG to contribute to 9-10 per cent of car sales by 2015-16


With more CNG/LPG refueling points and service centers being
established, CRISIL Research expects sales of such vehicles to increase
over the next 5 years, presenting a cost-effective alternative to diesel cars.
During 2005-06 to 2010-11, 300 CNG stations were set up across 50 cities.
CRISIL Research expects the number of these stations to increase to
almost 570 by 2014, covering another 50-60 cities.
In 2010-11, CNG/LPG cars accounted for 6 per cent of total cars & UV
sales.
While offering a mileage similar to that of diesel cars, CNG/ LPG are
cheaper by about Rs 6 per litre.
We therefore expect almost 10 per cent of new cars & Uvs sold over the
next 5 years to run on CNG/LPG.

Used car market-demand review and outlook

Indian used car market to triple in size by 2016-17


Used car sales in India have more than doubled to 2.6 million
units over the past five years, posting a 22 per cent CAGR during
2006-07 to 2011-12.
This is faster than new car sales, which grew at a 13 per cent
CAGR during the period.
In value terms too, used car sales posted a 23 per cent CAGR to
reach Rs 520 billion during 2006-07 to 2011-12.

Used car sales volumes to triple...

Used car sales volumes to triple...


The underlying factors for both new car and used car sales are the
same: rising household incomes, low penetration levels (13 cars
per thousand) and launch of new models.
Other salient factors that are aiding growth in used car sales are
declining holding periods of cars and the lower initial price of a
used car (given price-sensitive Indian buyers).
In the next 5 years (2011-12 to 2016-17), CRISIL Research expects
the used car market to triple, with further lowering of holding
period of cars and increasing share of organised players in the
market aiding growth.

...revenues to grow correspondingly

...revenues to grow correspondingly


Similarly, the rising share of organised players, mainly OEM-led
companies, in the used car market, will ensure transparency and
better valuation of used cars and improvement in service levels.
This along with a marginal improvement in the share of sedans
will aid increase in realisations.
Hence, growth in used car market and marginal improvement in
realisations is expected to help industry grow by 24-26 per cent in
value terms to reach a size of Rs. 1,554 billion by 2016-17.

More used cars to sell per new car sold

We expect used car sales to continue to post a 22-24 per cent CAGR (volume
terms) during the next five years, touching 7-8 million units. The ratio of new to
used car sales is projected to reach 1:1.8 by 2016-17 from 1:1.3 by 2016-17.

Small cars dominate used car market too


Higher proportion of small cars in new car sales ensures that the
share of such cars in the used car market is also correspondingly
high.
Small cars dominate as they are relatively affordable to sedans. A
larger proportion of total addressable households are below the
threshold income needed to afford a sedan.
Moreover, as carmakers continue to launch newer small car
models at attractive price points, the average holding period for
such cars is also declining.
As a result, in the used car market too, small cars dominate,
accounting for two third of total sales. In the next 5 years too, we
expect this share to remain constant.

Share of small cars to remain high in used car sales

Growth drivers
Declining holding period of new cars
In the past five years, the Indian car market has been flooded with
new models.
This has led buyers to upgrade to newer models faster, thus
pulling down the average holding period of cars from 4.5-4.7 years
in 2006-07 to around 3.9-4.1 years in 2011-12.
This has in turn translated into a higher number of used cars.
The growing presence of company-led OEMs in the used car
market will also aid lower holding periods, as these companies
push sales of newer models through exchange offers for old cars.
CRISIL Research expects the holding period to decline further to
3.4-3.6 years by 2016-17, supporting growth in used car sales.

Average holding periods to shrink further

Large number of potential first car buyers


The Indian car market is highly underpenetrated with only 13
cars per thousand people.
Further only 19-20 per cent of the addressable household
(households above income needed to buy the cheapest available
car) actually own a car.
Further, used cars have a lower initial price, which makes them
appealing to price-sensitive Indian buyers.
Together, these factors ensure that used cars sales continue to
grow exponentially in the next five years.

Used Car market-industry Structure

Organised players slowly gaining share in the used car market


In the past few years, used car sales in India have grown faster than
new car sales, with the used car to new car ratio improving to 1:1.3 in
2011-12 from 1:0.9 in 2006-07.
A rise in the share of organised players (OEM-led used car companies
like Maruti True Value, Ford Assured, etc. and players with pan India
presence in the used car market, namely Carnation) in the past 5
years has contributed to this growth.
The entry of organised players, including car manufacturers (OEMs),
in the used car industry will reduce the holding period of cars, as
these players lure customers through exchange schemes to boost
demand for new cars.
Used car transactions through organised players will also improve
lenders' confidence and reduce credit risks for the financier.

Organised players slowly gaining share in the used car market


Most organised dealers receive used cars in exchange of their new
cars sold.
However, at times, OEM-led companies may not want to certify
these cars as they may not comply with their standards.
In such cases, an organised dealer may sell such cars at a low
margin to unorganised dealers.
However, in contrast to developed economies, unorganised players
still dominate the used car market in India.
A large number of used car sales in India do not involve a thirdparty entity and take place directly.
Further, a large part of the used car market depends on
unorganised dealers and in some cases, on brokers who eventually
direct them to unorganised dealers.

Transaction cycle for a used car

Transaction cycle for a used car


Use of web-based listings for used car transactions is also gaining
pace. Portals like carwale.com, sulekha.com, gaadi.com and
others offer facilities for listing.
To elaborate, a dealer or an individual can list his/her used car
online and the websites act as intermediary in getting the buyers
to meet the sellers. Usually, the website collects a listing fee for
the services offered.

Organised players to form one-fourth of used car market by 2016-17


The share of organised players in the used car market was as less as 3-5 per
cent in 2006-07 with the existence of only one organised OEM affiliated used
car player: Maruti True Value.
However, with an objective of improving the overall new car buying
experience and to push new car sales, other OEMs too embarked upon the
used car business.
Consequently, with nearly every OEM developing their own used car
brand, the market became more organised.
The share of organised players in total used car sales is estimated to have
risen to 15-17 per cent in 2011-12 per cent from an estimated 3-5 per cent in
2006-07.
Of this, Maruti True Value controls over 50 per cent.
By 2016-17, we expect organised players to constitute nearly a quarter of
used car sales.

Share of organised players to improve

Share of organised players to improve


Advantages of a more organised used car market are:
Transparent transactions: Selling or buying a used car through
an organised dealer or an OEM-led company makes the
transaction more transparent, helping both parties get a fair
valuation.
Improved service: Growth in the sale of used cars is largely
dependent on the confidence of buyers.
Organised players have started offering a warranty of 6-12
months on used cars.
In addition, the quality of refurbishment and overall service has
also improved.

Used car market-dealer profitability

Organised financiers to remain cautious


Used car financiers, have usually been cautious while lending to used
car buyers due to the presence of a large number of unorganised
dealers/ brokers, which leads to a high valuation risk.
Financiers, especially the organised ones: banks, NBFCs and captive
financing companies therefore have their own valuers who assess the
price of the vehicle.
The loan-to-value (LTV) ratio is then determined on the assessed value
and not on the selling price.
Used car loans have a lower average ticket size, lower tenure, higher
yields as compared to loans for new cars.
Interest rates for used car financing is 300-400 basis points higher than
in the case of new car financing, which gives organised financiers
higher yields.

Organised financiers to remain cautious


However, as unorganised dealers would continue to dominate the
used car market, we expect organised financiers to remain
cautious, as most transactions by unorganised dealers carry a high
risk.
Moreover, the credit profile of a used car buyer is weaker than a
new car buyer, as most used car buyers are first-timers upgrading
from two-wheelers.
Thus, we expect the share of organised financiers to remain stable
in the next five years.

Organised financiers to wait and watch

Used car business enhances dealers' margins, will aid dealers


to better handle competitive pressures of new car business
As used car transactions are highly subjective to vehicle age,
valuation, condition of the car, etc, dealers have a better bargaining
power with used car sellers.
In case of new cars, dealers would forgo their margins for several
reasons: incentives received from the manufacturer on meeting
targets, dealer payouts by financiers, future service income expected
from the customer, lower growth in sales per dealership with rising
competition.
On the contrary, a dealer enters into a used car transaction due to
the following reasons:

Used car business enhances dealers' margins, will aid dealers


to better handle competitive pressures of new car business
1.

To cushion overall margins amid an increasingly competitive


scenario in new car sales,

2.

Facilitating used car sales through provision of prompt


exchange option,

3.

To shield margins during times when new car sales are


witnessing a down cycle.

Below, we examine at margins that an organised dealer earns


from a used car transaction vis-a-vis a new car transaction.

Dealer margins for new versus used cars

Dealer margins for new versus used cars


We have considered a four-year old Maruti Suzuki Wagon R for
exhibiting expenses and margins that dealers incur/ earn in the used
car business.
We have concluded that on an average, margins earned on used cars
are higher than margins earned on a new car (excluding capital cost).
While selling and showroom costs on sale of new cars will be higher,
inventory carrying cost including interest cost will be higher in case of
used cars.
CRISIL Research therefore estimates that used car transactions offer
higher margins to dealers than new cars.
Presence in the used car business also helps a dealer shield his
profitability during a down cycle when new cars sales are affected and
face competitive pressures of new car business better.

Summary

Passenger vehicle sales to decline in 2013-14


Key forecast for the cars and utility vehicles segment

Note: P: Projected; YTD: Year-to-date; H1: Half year

Key forecast for the cars and utility vehicles segment


CRISIL Research expects sales of cars and UVs to decline by 8-10
per cent in 2013-14, due to the following reasons:
1. Anticipation of weak economic growth (lower GDP growth
projections), translating into weak consumer sentiments
2. Sharp rupee depreciation, causing petrol prices to escalate by 3-5
per cent during the year
3. Expected hike of 18 per cent in diesel prices, impacting sedans
and utility vehicles sales
4. Firm lending rates
5. Weak demand momentum exhibited by a sharp volume decline
of 5 per cent during April-September 2013 despite low base (on
account of production disruptions at Maruti Suzuki India's
Manesar plant)

Key forecast for the cars and utility vehicles segment


Decline in volumes during April-September 2013 demonstrates
that consumer sentiments are extremely weak.
We do not expect sales to recover, as hike in petrol prices and
firm lending rates will prevent any meaningful recovery.
Additionally, sales of utility vehicles (including vans), which
posted a sharp growth of 32 per cent in 2012-13, is also showing
signs of moderation, with YTD (April-September 2013) sales
declining by 7 per cent.
We expect hike in diesel prices and the waiting period for
Ford's EcoSport to impact sales in the near term, causing the
segment to post a decline of 6-9 per cent for the full year (201314).

Demand_domestic

Passenger vehicle sales to decline in 2013-14


Passenger vehicle sales are expected to decline by 8-10 per cent in
2013-14, impacted by weak consumer sentiments, lower growth in
consumer incomes, rising fuel prices, interest rates and lower
disposable income on account of high inflation.
This decline over a growth of just 2 per cent and 5 per cent in the
industry in 2012-13 and 2011-12, respectively indicates extremely
weak consumer sentiments.
Prospects of growth in the consumers' incomes were muted in
2012-13 and will weaken further in 2013-14, as economic growth
remains subdued.
Further, rising fuel prices and interest rates and taxes, which have
caused the cost of owning a car to rise significantly by ~30 per
cent over the last 3-4 years will continue to deter growth in 201314.

Passenger vehicle sales to decline in 2013-14


Hence, the cost of owning a car is expected to increase by 2-3 per
cent, mirroring a 2-3 per cent hike in petrol prices.
Further, lending is also expected to remain firm.
Consequently, car sales are expected to decline for the second
consecutive year in 2012-13.
Sales of utility vehicles are also being impacted significantly by
prolonged weakness in consumer sentiments, coupled with hike in
duties, lending rates and diesel prices.
Hence, UV sales too are expected to drop by 6-9 per cent after
growing by 52 per cent in 2013-14.
Sales of vans, which posted a decline of 1 per cent in 2012-13, are
also forecast to decline by 5-7 per cent in 2013-14.

Weak

consumer sentiments, high cost of ownership to impact


demand

Note: P: Projected; YTD: Year-to-date; H1: Half year

Demand-side indicators worsen in 2013-14

Demand-side indicators worsen in 2013-14


Economy and income growth
We forecast GDP to grow by 4.7 per cent in 2013-14, marginally lower
than a growth of 5 per cent in 2012-13.
This is a downward revision from our earlier forecast of 5.5 per cent.
Lower economic growth impacts consumer incomes as well as the
expectation of income growth in the near term.
Together, these have a bearing on sentiments, which, in turn, govern
their purchase decisions.
As a result, PV sales moderated during the last two years (2011-12
and 2012-13).
Even as sentiments in urban areas are likely to worsen, the
expectation of better rural incomes, largely led by better monsoons,
will boost sales in rural areas.

Demand-side indicators worsen in 2013-14


Economy and income growth
We estimate the share of rural areas in total passenger vehicle
sales at ~20 per cent.
We believe, like in 2012-13, car sales to rural areas will continue to
increase in 2013-14.
For instance, Maruti Suzuki India Ltd (MSIL) reported a growth of
19 per cent in sales to rural areas in 2012-13, thereby causing the
share of rural areas in total sales to increase to 28 per cent in 201213 from 25 per cent in 2011-12.

Demand-side indicators worsen in 2013-14


Cost of ownership to remain high
The cost of owning a car includes fuel cost, maintenance cost,
insurance cost and annual amount payable towards loan
repayment.
The cost of ownership is estimated to have risen by around 8 per
cent and 6 per cent in 2011-12 and 2012-13, respectively, mainly
due to increase in petrol prices and hike in lending rates.
This had a major impact on sales of small cars, as potential small
car buyers are more sensitive to interest rates and fuel prices.
In 2013-14, we expect petrol prices to increase by 2-3 per cent.
Lending rates are also expected to remain firm.
The combined effect of these factors will push up the cost of
ownership by 2-3 per cent in 2013-14.

Cost of petrol car ownership set to decline

Demand-side indicators worsen in 2013-14


Increase in taxes to impact utility vehicle sales
Duties and taxes on small cars remain unchanged in the Union
Budget 2013-14.
However, the excise duty on non-taxi sedans and UVs with engine
capacity exceeding 1,500 cc, length exceeding 4,000 mm and having
ground clearance of 170 mm and above has been increased to 30
per cent from 27 per cent.
However, owing to the condition of higher ground clearance, less
than five sedan models will be taxed under these provisions.
On the contrary, most utility vehicles (barring some newly
launched models) will be taxed higher (at 30 per cent).
We expect the increase in tax to marginally impact demand for
such vehicles.

Increase in taxes to impact utility vehicle sales


Further, demand for luxury cars (priced over $40,000 and/or engine
capacity exceeding 3000 cc for petrol cars and 2500 cc for diesel cars) may
see some moderation, with basic customs duty being hiked to 100 per cent
from 75 per cent.
Limited supply of new models to hamper growth, especially in UV sales
Our expectation that the supply side will have a neutral role in promoting
demand growth rests on the assumption that there would be no further
production disruptions during the year.
However, in case of utility vehicles, huge demand amid limited production
of Ford's will impact growth.
Based on our interactions with the industry, we believe that the company
EcoSport may work towards increasing the production of the model
sometime in the second half of the year, which may aid growth in the
segment.

Demand-side indicators worsen in 2013-14


New model launches to provide some support to falling sales
Several new models were launched in 2012-13, especially in the
UV segment, thereby boosting growth.
We expect these model launches along with new model launches
expected in 2013-14 to continue to drive growth in UV sales.
Additionally, new launches of models such as , and in the small
car Honda Amaze Grand i10 Wagon R StingRay segment will
seek to somewhat contain the decline in small car sales to 8-10
per cent.

Model launches expected in 2013-14

Economic growth, petrol prices remain key monitorables


We have based our projections on expectations of 4.8 per cent growth in
GDP and increase of 2-3 per cent in petrol prices.
However, growth will continue to suffer if these expectations do not
materialise.
If macroeconomic concerns persist, it will dent the industry's growth
prospects.
Segmental outlook
Small car sales to decline for third consecutive year in 2013-14
Small cars constitute over half of total passenger vehicle sales and threefourths of total car sales.
Demand for small cars was severely impacted by the economic
downturn and rising cost of ownership in 2011-12 and 2012-13.
The limited supply of diesel vehicles, despite excessive demand for the
same, also restricted sales growth.

Segmental outlook
Small car sales to decline for third consecutive year in 2013-14
We expect the key determinants of demand for small cars i.e.
income growth and cost of ownership, to worsen in 2013-14.
Hence, small car sales are forecast to decline by 8-10 per cent in
2012-13.
Small car sales slide for two consecutive years

Small car sales slide for two consecutive years


Demand for the segment (as per SIAM classification) suffered the
most (on account of the unavailability of the Mini diesel option in
any of the models), declining by 7 per cent in 2011-12 and further
by 11 per cent in 2012-13.
On the other hand, in 2011-12, the compact segment (as per SIAM
classification) grew by 3 per cent due to comparatively higher
availability of the diesel option.
However, compact car sales declined by 7 per cent in 2012-13 due
to the prolonged economic downturn, hike in diesel prices and
only marginal decline in interest rates.
We expect the proportion of the Mini segment to increase in 201314, with the decline in difference between petrol and diesel prices.

Diesel price hikes to impact growth in sedan sales in 2013-14


Sedan sales grew by 18 per cent in 2011-12 due to lower
sensitivity to cost of ownership and higher availability of diesel
options as compared to small cars.
However, with the launch of several new utility vehicles priced
similarly to sedans in 2012-13, consumers opted for UVs, thus
impacting sales in the sedan segment.
Hence, growth in this segment moderated to 1 per cent in 201213.
The prolonged economic slowdown and hike in diesel prices
(diesel vehicles constitute ~60-70 per cent of total sedan sales)
will impact sedan sales, causing them to fall by 8-10 per cent in
2013-14.

Trend in sedan sales growth

Difference in average prices of petrol and diesel

Diesel price hikes and duty hikes to cause significant moderation


in UV (including vans) sales
Utility vehicle sales (including vans) grew by 14 per cent y-o-y in
2011-12, outpacing growth in the cars segment (which grew by 2
per cent in 2011-12), as the widening gap between the prices of the
two fuels led to higher demand for sedans and utility vehicles.
Further, many new models were launched in the segment in 201213.
Amid rising dieselisation, these new model launches were received
well by the consumers.
New model launches formed a third of total UV sales. Thus, the UV
segment (including vans) grew by 32 per cent y-o-y in 2012-13.
However, growth in UV sales moderated since the beginning of the
fourth quarter of 2012-13.

Diesel price hikes and duty hikes to cause significant moderation


in UV (including vans) sales
In the Union Budget of 2013-14, the excise duty on non-taxi
sedans and UVs with engine capacity exceeding 1,500 cc, length
exceeding 4,000 mm and having ground clearance of 170 mm
and above has been increased to 30 per cent from 27 per cent.
Most utility vehicles (barring some newly launched models like
MSIL's , M&M's and Renault's ) will be taxed higher (at 30 per
cent).
Ertiga Quanto Duster We expect the sensitivity of sales to hike in
prices to increase on account of persistent weakness in consumer
sentiments.
Launch of Ford's EcoSport , created a huge demand, impacting
demand for other models.

Diesel price hikes and duty hikes to cause significant moderation


in UV (including vans) sales
However, since the production of the model is capped at 5,0006,000 units per month, the waiting period is long.
Such a scenario is causing sales of other UVs, which are already
witnessing moderation, to decline.
In 2013-14, we expect diesel prices and duty hikes to cause UV
sales to continue to decline.
We expect the company's effort to increase the production of its
EcoSport model to limit the decline in sales to 6-9 per cent.

Trend in UV sales

Trend in UV sales
In 2012-13, many new models were launched in the Rs 8-12 lakh
(ex-showroom) bracket.
These models garnered significant consumer interest.
Also, the launch of new models in the UV segment (priced
similarly to the SIAM's 'mid-size' segment) adversely impacted
growth in the sedan segment.
Additionally, with increasing dieselisation, consumer preference
has shifted from petrol cars to diesel cars and UVs.
Against this backdrop, the availability of a host of new models
acted as a catalyst for growth in the segment.
In 2013-14, however, we expect UV sales to decline, mainly led by
the impact of the prolonged downturn and hike in diesel prices.

New model launches and UV (not including vans) sales growth


in 2012-13

Demand-exports

Exports stage a recovery in 2012-13


Exports of cars & utility vehicles (UVs) grew by 9 per cent in
2012-13 after a marginal decline of 0.4 per cent in 2011-12.
Weak global demand, especially in Europe, one of the largest
export markets, impacted demand in 2011-12.
In 2012-13, sluggish demand in Europe and increase in import
and excise duty rates in Sri Lanka, which constitutes nearly 5 per
cent of the total exports of major exporters such as Maruti Suzuki
India Limited (MSIL), limited growth to single digits.

Export sales and growth trend

Export sales and growth trend


Hyundai Motors India Limited (HMIL), the largest exporter from
India, clocked a 9 per cent growth in exports during 2012-13 with
its i10 and i20 models performing well.
HMIL supplies to over 100 destinations across West Asia, Asia
Pacific and the European region.
MSIL, the second largest exporter from India, exports its cars to
Europe, Algeria, Chile, Sri Lanka and Nepal. Export sales of MSIL
declined by 5 per cent due to slower growth and increasing
competition in the export markets, in addition to the impact of
increase in import and excise duty rates on vehicle imports in Sri
Lanka.

Export sales and growth trend


In 2012-13, Honda started exporting to South Africa while
Renualt started exporting to South Africa.
Brio Duster Also, Volkswagen started exporting Polo and Vento
to the Middle East and Africa adding to its existing destinations
in the Middle East and South Africa.
M&M started exporting its SUV, XuV 5oo to Europe apart from
its existing market, South Africa.
HMIL maintained its share at 47 per cent while that of MSIL and
Nissan fell with a decline in their exports during the year.
However, the share of other players like Honda, Volkswagen,
Toyota, M&M and Ford increased due to growth in the export
volumes.

Player proportion in total exports from India

Exports grew by 14 per cent in the first half of 2013-14


Passenger vehicle exports grew by 14 per cent y-o-y during the first
half (April-September) of 2013-14.
Exports of the top two exporters from India - HMIL and MSIL grew by 5 per cent and 4 per cent, respectively.
Exports of Ford and Honda increased as they started exporting
their new models -EcoSport and Amaze.
Despite no new offerings for over a year, players such as Toyota
and Volkswagen managed to grow their exports significantly
during the first half of 2013-14.
We attribute increased focus on export to the weak rupee (which
causes export realisations to soar) and decline in volumes in the
domestic market.

Exports to grow by 10-12 per cent in 2013-14


In 2013-14, we expect exports to grow by 10-12 per cent with
players tapping newer export geographies to tide over low
operating rates.
The share of imported components in cars manufactured in India
(by foreign players) remains high.
Even for MSIL, despite its long-standing presence in the Indian
markets, direct and indirect imports constitute about 15 per cent
of its raw material cost.
We believe that this number could be higher for relatively newer
entrants, making their cost and hence their profitability
susceptible to currency movements.

Exports to grow by 10-12 per cent in 2013-14


Therefore,

apart

from

improving

operating

rates

and

realisations, exports also serve as a natural hedge against


imports of raw material/technology.
In 2013-14, the share of players other than those of MSIL and
HMIL is expected to increase as players such as Ford, Honda
and Renault-Nissan plan the export of their India-specific
models to other markets in Africa and Asia, which have
consumer preference similar to that of India.

Share of exports in total sales to increase marginally

Car & UV exports have grown at 21 per cent CAGR in the


past 5 years
Cars & UVs exports have grown at a CAGR of 21 per cent during
the last five years (2007-08 to 2012-13) with volumes of the top
two exporters - HMIL and MSIL - growing by 12 per cent and 18
per cent, respectively during this period.
Sales of other players grew at a significantly high CAGR of 53 per
cent as players such as Nissan and Toyota started exporting their
cars from India and as Renault-Nissan JV and Ford India develop
India as an export base.
Small cars constituted over 75 per cent of car exports, while
Europe and Asia were the key export destinations.
However, many OEMs started exporting sedans and UVs in 201112 and 2012-13.

Car & UV exports have grown at 21 per cent CAGR in the


past 5 years
As a result, the share of small cars fell to 82 per cent in 2012-13
from 86 per cent in 2011-12.
Over the last couple of years, several OEMs started looking at
India as their export base to avail of the low-labour cost
advantage.
Besides, location of export hubs in markets with high growth
potential will give OEMs the benefits of scale.
This will also enable competitive pricing, one of the preconditions for operating in the small car market.

Car exports to more than double over the next 5 years...


CRISIL Research expects car exports from India to more than
double over the next 5 years and reach almost 1 million by 201718.
Plans by global OEMs to set up export-oriented manufacturing
facilities in India will enable a 12-14 per cent growth during this
period.
The combined shares of HMIL and MSIL, which accounted for
68 per cent of the total car exports in 2012-13, will decrease to
about 60-63 per cent by 2017-18, following higher exports by the
newer entrants.
Small cars will, however, continue to constitute significant
chunk of car exports over the next 5 years.

...as India gains prominence as an export hub


Given the availability of skilled labour at low costs and the
development of industrial clusters, which enjoy tax and non-tax
incentives, India presents a good opportunity for global players
to set up their manufacturing bases.
Further, strong domestic demand will also help companies
achieve a higher scale of production and further lower
production costs.
MSIL, which has invested heavily in setting up capacities in
Gujarat, is expected to capitalise on the proximity of its facilities
to the Mundra port, to boost its exports.

Players add export-focused capacities


The Renault-Nissan JV has set up a plant near Chennai with an
annual production capacity of 400,000 units.
Nearly three-fourths of the plant's capacity is expected to be
dedicated to exports.
In 2012-13, Renault started using this facility to export its newly
launched Duster to the United Kingdom and Ireland.
Ford has invested Rs 40 billion in Gujarat to set up a plant with
an initial capacity of 240,000 units scalable to 400,000 units.
Ford started exporting Figo in 2010-11 to Bahrain, Kenya,
Mexico, Nepal, South Africa, North Africa, the Caribbean Islands
and Central Asia.

Players add export-focused capacities


Export of Figo to newer markets and the introduction of other
models, which may subsequently be exported, will help Ford
increase its share of exports.
Toyota and Volkswagen, newer entrants to the export market,
are also tapping the African and the Middle Eastern markets for
their cars.
General Motors has plans to increase exports from India over the
next 5 years.
Tata Motors has also started exporting its Nano to markets like
Nepal and Sri Lanka and is planning to explore other export
markets to improve the utilisation rates of its plant.

Realizations

Favourable product mix, dieselisation aid growth in net


realisations
The net realisations of Indian carmakers grew by 18 per cent in 201213, led by the following factors:
Increase in demand for diesel vehicles
A sizeable shift in demand from petrol to diesel vehicles owing to a huge
gap in the prices of both fuels caused realisations to increase sharply. Diesel
models are priced 20-25 per cent higher than petrol models.
Increase in prices
Car prices are estimated to have risen by 3-5 per cent (y-o-y) in 2012-13.
Faster growth in utility vehicle (UV) sales
New model launches and preference for diesel vehicles led to faster growth
in UV sales when compared to small cars. Thus, the increasing proportion
of relatively higher priced vehicles (UVs) pushed up growth in realisations.

Growth in realisations to moderate to 3-4 per cent in 2013-14


We expect realisations per vehicle to grow at a slower rate of 3-4
per cent (y-o-y) in 2013-14, owing to the following factors:
1.

We expect the proportion of petrol-based cars to increase


marginally (on account of the contracting difference in prices of
petrol and diesel), thereby impacting realisations negatively.

2.

For leading players, sales of UVs will suffer on account of the


impact of new models launched by competitors amid an
expected contraction in UV sales in 2013-14.

3.

Despite the above factors, price hikes and higher export


realisations (due to rupee depreciation) will aid a 2-3 per cent
growth in realisations in 2013-14.

Net realisations to improve at slower pace in 2013-14

Input costs

Input cost to rise only marginally in 2013-14


Input costs of leading players rose by about 17 per cent y-o-y in
2012-13, despite a decline of nearly 1 per cent in the basic raw
material index.
This is mainly on account of the shift towards larger vehicles
such as utility vehicles.
Additionally, the shift towards diesel vehicles and the rupee's
depreciation (imported raw materials constitute 15-20 per cent of
total input cost for leading players) also escalated input cost.
We expect basic raw material cost to increase by 0-2 per cent y-oy in 2013-14, mainly due to an increase in prices of aluminium
and plastics.

Input cost to rise only marginally in 2013-14


Prices of iron are are expected to fall, while that of steel are
expected to remain flat.
We expect prices of tyres also to fall, owing to an expected decline
in natural and synthetic rubber prices.
We expect raw material cost per unit to increase by 2-3 per cent yo-y, after posting a growth of 13 per cent y-o-y in 2012-13.
Higher input prices coupled with the impact of rupee
depreciation, will cause raw material cost to increase.
However, the shift towards lower-cost vehicles will limit the
increase in cost.
On account of these factors, raw material cost-to-sales ratio
will decline marginally.

Basic raw material cost to inch up marginally

Raw material cost-to-sales ratio to decrease marginally

RM: Raw material; P: Projected

Margins

Sharp realisation growth led to margin expansion in 2012-13


Operating margins improved phenomenally by ~270 bps y-o-y
in 2012-13 due to price hikes and shift of sales mix towards
higher realisation vehicles such as utility vehicles and diesel
vehicles.
Further,

even

as

other

costs

increased,

it

could

not

commensurate the sharp growth in realisations causing margin


expansion.
Also, impact of merger of leading car maker Maruti Suzuki
India Limited (MSIL), with its higher margin generating group
company Suzuki Powertrain India Limited (SPIL) also aided
margin expansion.

Easing input costs to result in higher margins in 2013-14


In 2013-14, we expect realisations to grow by 3-4 per cent on
account of price hikes and higher export realisations despite a shift
in sales mix towards lower priced products.
Shift in product mix towards petrol powered vehicles and lower
sales of utility vehicles (of sample set company) on account of
competition from new launches such as Ford EcoSport will led to
moderation in realisations growth.
However, we expect efforts to indegenise production to minimize
the adverse impact of rupee depreciation to some extent.
Also, as most imports are yen denominated, yen depreciation will
seek to somewhat mitigate the impact of sharp rupee depreciation.
Further, per unit input cost is expected to go down on account of
change in product mix.

Easing input costs to result in higher margins in 2013-14


On account of these factors, we expect lower input costs to enable
margin expansion to the extent of 80-120 bps y-o-y.
Operating margins to improve in 2013-14

Operating margins to improve in 2013-14


Operating margins of other players are lower as compared to those
of leading players.
We estimate margins of these players to have eroded during 201112 due to higher input and selling costs.
In 2012-13, a favourable product mix aided improvement in
realisations for certain players.
However, higher selling costs, pricing pressures and low operating
rates are estimated to have resulted in flat or lower margins.
In 2013-14, we expect margins of players exporting from India to
remain stable or fall only marginally as higher export realisations
would partially offset rising input costs.

Operating margins to improve in 2013-14


Further, barring those of Japanese car OEMs, margins of other
players are likely to be severely hit on account of rupee
depreciation amid limited ability to pass on rising input cost in
order to remain competitive in a contracting market.

Player-wise margins

Trend in industry margins

Note: Data for industry includes Hyundai and Maruti for 2003, Hyundai, Maruti
and Honda for 2004, Hyundai, Maruti, Honda and Toyota for 2005 and H

Easing input cost to lead to improvement in margins

Operating rate to continue to decline


Capacity utilisation (effective) is estimated to have declined to 77
per cent in 2011-12 from 83 per cent in 2010-11 following a
moderation in demand and commissioning of additional
capacities in 2011-12.
Owing to lower demand, especially for passenger cars, operating
rates fell to 75 per cent in 2012-13.
As demand for passenger vehicles is expected to decline in 201314, we expect capacity utilisation to decline to 64 per cent.

Operating rates to continue to decline in 2013-14

RoCE to improve for leading players


In 2011-12, higher raw material costs, royalty and selling costs
weighed down the industry's operating margins.
Moreover, production problems at Maruti Suzuki's plants led to a
drop in the industry's profits, which reduced RoCE to 14 per cent
in 2011-12 from 22 per cent in 2010-11.
In 2012-13, increased profitability caused RoCE to expand by ~310
bps to 17.3 per cent.
Like in 2012-13, we expect RoCE to increase by ~100 bps in 201314, mainly due to improvement in profitability.

RoCE to improve with improvement in margins

Supply

Supply
Pace of capacity additions slowed in 2012-13
The total domestic installed car manufacturing capacities are estimated to
have increased by 13-15 per cent in 2011-12, with the top two manufacturers
- Maruti Suzuki India Ltd (MSIL) and Hyundai Motors India Ltd (HMIL) accounting for more than 50 per cent of the additions.
However, the pace of demand growth slowed in 2012-13 as labour issues
impacted planned capacity addition at market leader MSIL's Manesar plant.
Thus, in 2012-13, installed capacity is estimated to have risen by 8 per cent
with majority of the additions coming from Renault-Nissan JV, Toyota
Kirloskar Motors and Mahindra and Mahindra Ltd (M&M).
We expect installed capacities to increase by 10-11 per cent in 2013-14, with
MSIL and Ford India constituting over 90 per cent of the total expected
incremental capacities.

Capacity utilisation rates drop as demand slows


Slowing demand for cars along with production problems at MSIL (due
to labour strikes), pulled down capacity utilisation (effective) rates to 77
per cent in 2011-12 from 83 per cent in 2010-11. In 2012-13, PV sales
grew by a mere 2 per cent.
Effective capacities are estimated to have grown by 6-7 per cent in 201213.
Hence, operating rates are estimated to have declined to 75 per cent.
In 2013-14, we forecast capacity utilisation (effective) to decline further
to 57 per cent with a slow recovery in demand growth amid capacity
additions.
On installed capacity basis, we estimate operating rates to have
declined to 67 per cent in 2012-13 (from 69 per cent in 2013-14) and
further expect them to fall to 64 per cent in 2013-14.

Trend in capacity utilisation

Note: Includes Maruti Suzuki India Limited, Hyundai Motors India Limited,
Tata Motors Limited, Ford India, Renault-Nissan JV, General Motors India, To

MSIL and Ford to expand capacities in 2013-14


Estimated player-wise installed capacity (units in million)

MSIL and Ford to expand capacities in 2013-14


Estimated player-wise installed capacity (units in million)
Few major expected capacity additions include:
MSIL has invested Rs 17 billion at its Manesar plant to
commission an additional 0.25 million units to the existing
capacity of around million units.
This capacity was set to get commissioned in 2012-13.
However, labour issues at the Manesar facility led to delays.
We expect these capacities to come onstream in 2013-14.
In addition, MSIL plans to invest Rs 120 billion to set up a plant in
Gujarat for manufacturing 1 million units per year.
Proximity of the plant to the Mundra port will also aid exports.
However, land acquisition issues in Gujarat are likely to postpone
the date of commissioning.

MSIL and Ford to expand capacities in 2013-14


Estimated player-wise installed capacity (units in million)
According to the company, initial capacity of 250,000 is likely to
commission in 2015-16.
Ford India has invested Rs 40 billion to establish a greenfield plant in
Gujarat (Sanand).
The initial capacity of the plant will be 240,000 units (scalable to 400,000
units) and it is expected to get commissioned by early 2014.
Toyota-Kirloskar Motor had invested Rs 9 billion to increase its capacity
to 310,000 units from the current 210,000 units, to cater to rising demand
for its Etios and Etios Liva models.
General Motors India has invested Rs 20 billion to increase its capacity
to almost 340,000 from 240,000 units at its Talegaon plant.
We expect these capacities to get commissioned after 2014-15.

Demand for diesel cars outstrips existing capacities, waiting


periods to ease in 2013-14
In 2011-12, demand slowed on account of a rapid rise in petrol
prices and growing interest rates.
Simultaneously, demand for diesel models surged, far outstripping
capacities for such models.
The waiting period on diesel models also despite significant
discounts, diesel variants were in short supply, thus restricting sales
growth at both ends.
This led MSIL to increase its diesel car capacities at its Manesar
plant to about 300,000 by the end of 2011-12 from 240,000 in 2010-11.
In addition, MSIL will also receive 100,000 diesel engines in 2012-13
from Fiat under a contract signed in 2011-12.

Demand for diesel cars outstrips existing capacities, waiting


periods to ease in 2013-14
The carmaker has also announced fresh investments of about Rs 17
billion in 2012-13, towards establishment of a diesel engine plant
with an annual capacity of 150,000 units.
However, supplies from the plant are expected to commence only
by 2013-14.
In 2013-14, we expect dieselisation in cars to reduce (due to higher
demand for petrol cars in line with our forecast of contraction in
gap between petrol and diesel prices), thus resulting in lowering of
waiting periods for such vehicles.

Regional dynamics
The Gurgaon-Manesar region in Haryana is currently the largest cluster,
accounting for about 35 per cent (2011-12) of installed car capacities.
Going forward, this cluster will continue to remain the largest base for the
Indian cars and UVs industry, considering the large expansions planned by
MSIL - the only major car maker in the state.
The overall contribution of the cluster to total capacity would continue to be
about 34 per cent by 2013-14.
Tamil Nadu-Karnataka will continue to remain the second largest supply
cluster.
The two states' share in total installed capacities will increase to 29 per cent
in 2012-13 from 25 per cent in 2011-12.
However, the share of this cluster will fall to 26 per cent in 2013-14 with an
increase in the share of other clusters.

Regional dynamics
Maharashtra accounts for 26 per cent (2012-13 of the total installed capacity
in the country.
Tata Motors and Mahindra & Mahindra are two main OEMs, with a large
share of their capacities for cars and UVs in Maharashtra.
In 2013-14, we expect the state's share in total installed capacity to decline to
24 per cent.
Gujarat currently houses 7 per cent of the industry's total capacity.
While its share may not increase in 2012-13, it will grow in 2013-14, with
significant capacities planned by Ford Motors.
Thus, by 2013-14, we forecast Gujarat to account for 11 per cent of the total
installed cars and UV capacities in the country.
We expect the share of Gujarat to increase further over the next 3-4 years as
MSIL's new capacities get commissioned.

Estimated break-up of total capacities by key cluster

Estimated break-up of total capacities by key cluster


Growth in these clusters can be attributed to the following factors:
1. Proximity to key component manufacturers
2. Availability of skilled manpower
3. Availability of key infrastructure
4. Electricity
5. Road connectivity
6. Air connectivity
7. Ports
8. Proximity to key domestic markets
9. Favourable state policy and government incentives
10.Ease of land acquisition
11.Focus of projects i.e. domestic versus export focus

Short-term demand trends

Passenger vehicle sales fell y-o-y post festive season in


November
In November 2013, domestic passenger vehicle sales fell by 10.2
per cent year-on-year (y-o-y), mainly due to 8.2 per cent y-o-y
drop in passenger cars coupled with a sharp decline of 14.8 per
cent y-o-y in utility vehicles (UVs) including vans.
On a m-o-m basis as well, passenger vehicle sales fell sharply by
15.7 per cent post festive season.
During November 2013, rise in ownership cost due to firm
interest rates and high fuel prices impacted passenger car sales.
Also, an increase in excise duty on sports utility vehicles
effective from April 2013 continued to affect UV sales which
declined by 9.1 per cent y-o-y.

Passenger vehicle sales fell y-o-y post festive season in


November
Van sales also fell significantly by 28.4 per cent y-o-y.
Consequently, utility vehicles (including vans) dropped by 14.8
per cent (y-o-y) in November 2013.
Except in August 2013, domestic passenger vehicle sales posted a
y-o-y decline in the past eight months of 2013-14.
Cumulatively during April to November 2013 also, passenger
vehicle sales dropped by 5.3 per cent y-o-y.
This decline was driven by continued uncertainty over income
growth, weak consumer sentiments and high ownership cost of
vehicles.

Passenger car domestic sales trend

Passenger car domestic sales growth trend

Tata Nano sales continued to fall....


Sales of Tata contributed marginally to the company's total sales
and were only 30 per cent of the past year Nano sales in
November 2013.
Despite continued efforts to push sales through discounts and
special edition models, sales of Tata Nano failed to improve on
y-o-y as well as on m-o-m basis.
During April to November 2013, Tata Nano sales declined sharply
by 71.6 per cent y-o-y.
Besides rising ownership costs, severe competition from the
Maruti Alto 800 continued to impact sales of the Nano .

Mini segment sales skid down again......


Sales of Mini cars (forming around 34 per cent of the total domestic
sales) fell modestly by 3 per cent y-o-y in November 2013.
Sequentially also, mini segment sales fell marginally.
This segment currently includes Spark, Santro, Eon, A-Star, Alto
and Wagon R .
Sales of nearly all models in the segment declined y-o-y in
November 2013, except Maruti's 800 and Wagon R which
increased y-o-y due to heavy discounts during festive season.
During April to November 2013, sales of Mini cars rose by 4.7 per
cent y-o-y, led by marginal y-o-y rise in Maruti's Alto and strong
sales of 17.8 per cent and 19.1 per cent in Maruti's Wagon R and
M800 respectively and aided by 6.4 per cent growth in sales of
Hyundai's EON.

Compact segment sales fell y-o-y post festive season in November


The compact sales (forming around 47 per cent of total domestic
car sales) fell by 5.4 per cent y-o-y in November 2013, mainly due
to drop of 9.2 per cent y-o-y in sales of Maruti's Swift , despite
rise in sales of newly launched Hyundai's Grand i10 and Honda's
Amaze.
During April to November 2013, sales of cars in compact segment
fell by 2.2 per cent (y-o-y).
Over the past two years, dieselisation in the segment had
increased significantly (due to widening gap between the petrol
and diesel prices).
Hence, sales fell on account of hike in diesel prices.

Trend in domestic Mini and Compact sales

Hyundai gains market share


During April to November 2013, Maruti lost while Hyundai
gained market share marginally.
Hyundai's share rose on account of launch of the new Grand i10,
while Maruti's market share fell owing to weak domestic
demand.
Tata Motors share slipped on account of weak growth in sales of
Indica and Indigo.
Honda's share is estimated to have risen on account of launch of
Amaze during April-November 2013.

Hyundai gains market share

Sedan sales continued to fall in November 2013


Sales of sedans (super compact and mid-size) decreased by 14.5 per
cent in November 2013.
Sequentially also post festive season, sedan sales dropped sharply
by 19.2 per cent.
Barring sales of Maruti's , sales of all other models declined Dzire
significantly on y-o-y basis due to competition from UVs, hike in
diesel prices and impact of prolonged economic downturn on
consumer sentiments.
During April to November 2013, sales of sedans fell by 8.6 per cent
y-o-y.
However, Maruti's market rose sharply on account of low base of
last year coupled with higher demand for its flagship model Swift
Dzire .

Sedan segment sales: Domestic sales

Sedan segment: Market share of key players

Discounts rise on account of festive season in November 2013


Interactions with dealers indicate that average discounts for the
month of November 2013 have risen sequentially on the back of
festive season.
Hyundai retained its free insurance scheme on all variants and
offered a cash discount of up to Rs 15,000 to boost sales.
Tata Motors also continued with its discounts on the Indica and
increased exchange bonus by Rs.5,000.
MSIL Vista similarly offered a discount of Rs 15,000 on its Swift .
We expect discounts to increase over the next couple of months.

Small car segment: Trends in discount

Note: The above discount index indicates discounts offered for key models by top three
OEMs (Maruti, Hyundai and Tata Motors). These models constitute around 35-40 per cent
of sales in small car segment (excluding Nano).Discount includes cash discounts,
insurance and accessories.

Exports fell y-o-y in November 2013


Exports of passenger vehicles dropped by 13.6 per cent y-o-y in November
2013, mainly due to y-o-y fall in exports of Hyundai and Maruti.
During April to November 2013, however, exports grew by 9.6 per cent y-oy primarily due to the sharp rise in exports of Renault's and Ford's i Duster
Eco Sport n past five months .
Key Developments:
New models launched:
Mahindra and Mahindra (M&M):
Launched XUV500 variant XUV500 W4 , powered by 2.2 litre mHawk 140
bhp diesel engine, priced at Rs. 10.83 lakhs (ex-showroom Mumbai).
Launched a variant of its multi-purpose vehicle (MPV) Xylo as Xylo D2
MAXX , with 9-seats options at Rs. 7.34 lacs (ex-showroom, Bangalore).
The new 9-seater MPV is equipped with BS III compliant 2.5 litre mDI
CRDe engine, giving a mileage of 14.95 kmpl.

Key Developments:
New models launched:
Hyundai launched two variants of its compact car Grand i10 with automatic
transmission - Grand Sportz AT and Grand Asta AT , priced at Rs 5.64 lakh
and Rs 5.92 lakh respectively (ex-showroom Delhi).
Mercedes-Bens launched a variant of luxury C-Class car Edition C , priced
at Rs. 39.16 lakh (ex-showroom Mumbai).
The new variant is equipped with 4-cylinder, 2143 cc diesel engine with 7GTronic Plus automatic transmission, has rated output of 125 kW @ 3000-4200
rpm and a rated torque of 400 Nm @ 1400-2800 rpm.
BMW India
Launched a petrol variant of BMW Z4 roadster, priced at Rs 68.9 lakh (exshowroom Mumbai).

Key Developments:
New models launched:
BMW India
Launched an updated version of 5-Series , priced between Rs. 46.9 lakh to Rs.
57.9 laks (ex-showroom Delhi).
Tata Motors launched the CNG versions of its mid-sized sedan Tata Indigo
and compact car Tata Indica under its emax series priced up to Rs 5.27 lakh
(ex-showroom Delhi).
The new Tata Indigo emax is priced between Rs. 4.99 lakh to Rs 5.27 lakh
(ex-showroom Delhi), while the new Tata Indica emax is priced between Rs
3.99 lakh and Rs 4.26 lakh (ex-showroom Delhi) respectively.
Volvo India launched upgraded variants of S60 and XC60, priced between
Rs 29.90 lakh and Rs 46.55 lakh (ex-showroom Delhi).

Key Developments:
New models launched:
General Motors India launched a new version of Chevrolet Cruze ,
priced between Rs 13.75 lakh and Rs 16.15 lakh.
Volkswagen India launched an upgraded version of its mid-size
sedan Vento TSI at Rs 9.99 lakh - (ex-showroom New Delhi).
The new mid-size sedan is powered by a 1.2 litre turbocharged petrol
engine which produces 105 ps of power and 175 Nm of torque.

New models to be launched:


Mercedes-Benz announced to launch a new variant of its luxury
car S-Class in January 2014.
Ford India is planning to launch a new hatchback in the 201415, named as 'The all-new Ford Ka Concept'. Any further details
on the model are not yet known.
Honda Cars India Ltd. announced to launch three new models
including one MPV Mobilio in 2014-15.

Maruti

Maruti Suzuki India Ltd


Key indicators

Background
Maruti Suzuki India Ltd (MSIL) is India's largest passenger
vehicles manufacturer.
As of March 2013, MSIL's manufacturing facilities are located at
Gurgaon and Manesar with total annual capacity of 1.5 million
vehicles.
MSIL is planning to expand its capacity to 1.75 million vehicles in
2013-14, owing to expansion at its Manesar plant.
The company is also expected to commission its diesel engine
plant with initial capacity to produce 150,000 units per annum.

Dealer Network
As of March 2013, MSIL had a strong network of around 1,204
sales outlets spread across 874 cities and 2,965 authorised service
stations spread over 1,423 cities.
Key models

Domestic sales and exports


Maruti's domestic sales increased modestly by 4.4 per cent y-o-y
in 2012-13, mainly due to the slowdown in the passenger vehicles
segment.
In 2012-13, the passenger vehicles segment was highly impacted
and grew marginally by 2 per cent y-o-y due to the weak
economic environment coupled with the high ownership cost of
vehicles, leading to poor consumer sentiments.
Exports fell by 5.5 per cent y-o-y owing to a sharp decline in the
company's key export market - Europe.
Over 2007-08 to 2012-13, while domestic sales increased by 8.1
per cent, exports rose robustly by 18.4 per cent.

Domestic sales and exports


As of March 2013, Maruti primarily exported its passenger
vehicles to Indonesia, Thailand, Malaysia, Vietnam along with
Europe.
Due to the economic slowdown in Europe, the company started
exploring other non-European export destinations.
As a result, the company's share of exports to European
countries decreased to 23 per cent in 2012-13 over 38 per cent in
the previous year.
Maruti continued to hold a dominant position in the domestic
passenger vehicle market with a share of 39 per cent in 2012 - 13.

Trend in Domestic Sales:

Trend in Exports:

Recent launches (2012 onwards)

Recent launches (2012 onwards)

Forthcoming launches

Capital expenditure
In 2012-13, MSIL incurred a total capex of Rs 27 billion.
A large part of this capex was to add 250,000 units of vehicle
manufacturing capacity to its Manesar plant.
In 2013-14, the company has announced a capex of Rs 30 billion,
of which, around Rs 19 billion will be spent towards increasing
the capacity at the Manesar plant by 250,000 units, while the
balance will be spent on setting up new diesel engine capacities.
The company had also announced a capex of Rs 60 billion to set
up capacities to manufacture about 10,00,000 units per annum in
Gujarat (greenfield expansion) in 2012-13.
The company has signed an agreement with the Gujarat state
government under which, the government will allocate 500 acres
for the same.

Capital expenditure
The company is also planning to make an investment of Rs 10 billion to
build a new research and development centre at Rohtak, which is
expected to be commissioned in two phases by 2016.
Merger with Suzuki Powertrain India Limited (SPIL)
Under a scheme of amalgamation approved by the high court, Delhi,
MSIL amalgamated with itself, Suzuki Powertrain India Limited (SPIL), a
supplier to it of diesel engines and transmissions.
SPIL, which was 70 per cent owned by Suzuki Motor Corporation, Japan
and 30 per cent by MSIL, was amalgamated with the company through a
share swap.
The swap ratio was fixed at 1:70 based on the terms of the scheme.

Merger with Suzuki Powertrain India Limited (SPIL)


With the amalgamation the company brought entire diesel engine
capacity under single management control in order to enable the
company strengthen its business, including sourcing, localisation
and production planning.
It will also lead to manufacturing flexibility and cost reduction.

Hyundai

Hyundai Motors India Limited (HMIL)


Key indicators

Plant locations and capacity


HMIL has two plants at Sriperumbudur, Chennai and a research
and development (R&D) centre at Hyderabad.
As on March 31, 2013, its total installed capacity stood at 670,000
units. The company has 350 dealers across 800 service points.
Recent models and expected launches
In March 2012, the company launched its new sedan , with a 2.4 litre GDi
petrol engine and a 6-speed transmission Sonata system.
The model was priced at Rs 18.53-20.61 lakh (ex-showroom Delhi).
The same month, HMIL launched an upgraded version of its
hatchback i20 , named as iGen i20 , at a price of Rs 4.73 lakh (base
petrol variant) and Rs 5.96 lakh (base diesel variant).
The iGen i20 is available in 12 variants and sports a more powerful (84 PS)
1.2-litre Kappa petrol engine (or a 1.4 U2 CRDi diesel engine).

Recent models and expected launches


In August 2012, HMIL launched a sedan Elantra .
It is powered by a 1,797cc petrol/ or a 1,582cc diesel engine, priced
between Rs 12.51-14.24 lakh (ex-showroom Delhi) and Rs 12.9115.85 lakh, (ex-showroom Delhi) respectively.
The four-cylinder petrol engine produces 149.5PS @6,500 rpm and
a 181Nm of torque @ 4700 rpm.
The diesel engine produces 128PS @ 4000 rpm at 265Nm of torque
between 1,900-2,750 rpm.

Key models

Key models
In March 2013, HMIL launched a special edition of the , named ,
priced between Rs. 4.24 lakh-4.57 i10 i Tech lakh (ex-showroom
Delhi).
The model is available with engine options of 1.1 litre and 1.2 litre.
In 2013-14, HMIL plans to launch a diesel variant of the i-10 .
The company also plans to launch a new small car code-named BA
in the second quarter of 2013-14.
The new car is expected to have a 1.2-litre petrol engine (1.1-litre
diesel engine in the variant) and will compete directly with
Maruti's Swift.
In 2014-15, HMIL plans to launch four models, including a
compact sports utility vehicle (SUV), a six-seater multi-purpose
vehicle, with the HexaSpace concept.

Key models
Also expected are a sub-4 metre sedan and a compact car which will
be positioned between i-10 and i-20 .
All the above models will be jointly developed with the company's
Korean R&D team.
Domestic sales and exports
The company's domestic sales remained flat y-o-y in 2012-13
owing to weak demand.
However, exports grew by 9 per cent y-o-y, after having declined
consecutively over 2010-11 and 2011-12.
Over the past five years (2007-08 to 2012-13), however, domestic
sales as well as exports increased at a robust CAGR of 12 per cent.

Domestic sales and exports


As of March 2013, HMIL is exporting six models: Santro, i10, i20,
Accent, Eon and Vernato to 120 countries across the European
Union (EU), Africa, Middle East, Latin America, Asia and
Australia.
It has been the India's leading exporter of passenger vehicles for
a decade.
The company has a domestic market share of 14.3 per cent as on
March 31, 2013.

Trend in domestic sales and exports

Capital expenditure
In 2012-13, HMIL invested $300 million (Rs 1.6 billion) in a new
diesel-gasoline flexible engine plant, which has a capacity to
manufacture 300,000 units.
It is expected that the plant will produce 1.1-litre, 1.4-litre and 1.6litre engines, which will be used in SUV and MUV models.
The parent company, Hyundai Motor Company has invested Rs
1.84 billion to set up a 200,000 square feet R&D facility in
Hyderabad, through its fully-owned subsidiary Hyundai Motor
India Engineering.

Key developments
In May 2013, HMIL stopped the production of its sedan , as
sales declined due to non-availability Accent of diesel version
and rising competition.
HMIL hiked prices of all models (by Rs 4,201-20,878) with
effect from February 2013.

Mahindra

Mahindra & Mahindra Ltd (M&M)


Key indicators

Background
Mahindra & Mahindra is the largest manufacturer of utility
vehicles (UVs) and tractors in India.
It also ranks second in the commercial vehicles segment, after
Tata Motors.
The company has its major manufacturing units at Nashik
(Maharashtra), Kandivali (Mumbai, Maharashtra) and Chakan
(Pune, Maharashtra).
As on March 31, 2013, the installed capacity at the plant stood at
400,000 units.
The company had a wide dealership network of 1,300 dealers
across India for all its categories of vehicles, as on March 31, 2013.
In March 2011, M&M acquired 70 per cent stake in Ssangyong
Motor Company (SMC).

Background
SMC has approved a total investment of around 500 billion
won till date, since its acquisition.
M&M is developing three new engine platforms with SMC
which are expected to be launched over the next 2 years.
In October 2012, M&M launched its first SUV Rexton with
SMC, priced at Rs 17.67 lakhs(ex-showroom Delhi).
Rexton is available in two variants RX5 and RX7, only in diesel
engines.

Key models

Domestic sales and Exports


M&M's domestic sales increased by 26.5 per cent y-o-y in 201213, led by strong demand for UVs due to new model launches
and increased preference for diesel vehicles.
Exports also grew by a strong 44 per cent y-o-y, after declining in
2011-12, since the company started shipping new models.
Over 2007-08 to 2012-13, domestic sales and exports increased at
a robust CAGR of 19.1 per cent and 11.8 per cent, respectively.
As of March 2013, M&M primarily exported its utility vehicles to
Bangladesh, Nepal, Sri Lanka, South Africa, Europe and Latin
America, thereby making India, its major export hub.
The company also had a strong domestic market share of 37.3
per cent in Uvs in 2012-13.

Domestic sales Growth

Exports Growth

Recent Launches (From 2012 onwards)

Forthcoming Launches

Capital expenditure
In September 2013, M&M announced investments of Rs 40 billion
for setting up its new plant in India.
The location for the same will be confirmed by the end of 2013-14.
Besides this, the company also announced a capital expenditure
plan of Rs 100 billion over the next 3 years, out of which, Rs 75
billion will be used for the automobile and farm equipment
segments and the remaining Rs 25 billion will be used to launch
new models and expand capacity.

Tata motors

Tata Motors

Key indicators
Plant locations and capacity:
Tata Motors has three plants in India at Pune (Maharashtra),
Pantnagar (Uttarakhand) and Sanand (Gujarat).
The company also has research and development (R&D) centres in
Pune, Jamshedpur, Lucknow and Dharwad.
As on March 31, 2013, the total combined installed capacity of the
Company stood at 970,000 units across vehicle segments.
Dealership network:
The company has a wide dealership network of 800 dealers
across 500 locations in India, as of March 31, 2013.
These dealerships are across all categories of vehicles.

Key models

Domestic sales and Exports


The company's domestic passenger vehicle sales (volumes)
dropped by 15.1 per cent (y-o-y) in 2012-13, mainly due to a sharp
fall of 31.9 per cent (y-o-y) in passenger car segment.
Decline was led by its inability to launch models at a faster pace.
Sales of company's passenger cars fell significantly with sales of
Nano declining by 27.7 per cent, while that of Indica falling by 7.1
per cent.
The company's UV business in 2012-13, however, grew robustly by
23.1 per cent (y-o-y) due to increased preference for diesel
vehicles and faster growth in rural areas.
Over 2007-08 to 2012-13, domestic sales increased at a CAGR of 5.1
per cent.

Domestic sales and Exports


The company has been able to maintain its position among the
top three players in the domestic passenger vehicle industry in
2012-13, although its market share fell to 11.8 per cent from 14.7
per cent in 2007-08.
In 2012-13, the company's passenger vehicle exports fell by 14.1
per cent (y-o-y), owing to economic and political upheavals in its
key export market.
As of March 2013, the company exports its passenger vehicles to
several countries in Europe, Africa, the Middle East, South East
Asia and South Asia.
Over 2007-08 to 2012-13, the company's share in India's total
passenger vehicle exports dropped sharply from 6.8 per cent in
2007-08 to 1.6 per cent in 2012-13.

Capital expenditure plans


In 2013-14, the Company announced a total capex of Rs. 30 billion,
out of which Rs. 16 billion will be invested in product development
for the passenger vehicles division, while the same for commercial
vehicles will be Rs. 14 billion.

Recent Launches (From 2012 onwards)

Recent Launches (From 2012 onwards)

Forthcoming launches