Auto Component Industry

in India

Automotive Component Manufacturers Association of India

1
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

2
 India-At a Glance
• Largest Democracy in the world with a population of 1,166 mln.
•
Age structure:
0-14 years: 31.1%
15-64 years: 63.6%
65-over: 5.3%
Sex ratio : At birth: 1 : 1.06 male(s)/female

Life expectancy: 69.89 years male

67.46 years female

University* Institutions of
Deemed Research Arts, Science & Engg., Tech., &
States/U National
Univers Institution Commerc Arch.,
Ts Importance
Central State ity* s e Colleges Colleges#
*

INDIA 20 216 101 13 140 11,698 1,562

Indian IT Companies played a vital role in the development of the Airbus A380
and Boeing 787 Dreamlines

Total no. of telephone connection as on Feb 2009 was 413million (14million

subscriber added every month last year)

3
 India-At a Glance

Taj Mahal it's one of the 7 wonders

Chandrayaan-1 a fantastic success: European scientist

National Aeronautics and Space Administration (NASA)

astronaut Edward Michael Fincke said on Friday (September
11, 2009) the Chandrayaan Mission of the Indian Space
Research Organisation (ISRO) was a success, with 95 per
cent of the mission being accomplished.

Hyundai i-10, Foreign Made vehicle, 1st

Launched in India then rest of the world

4
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

5
 After decades of low growth, the economy
moved into a high-growth phase….
Real GDP growth rate: India vs. World

9.2 9.8 9.3

10 India
World 7.9
8
7.3
5.6
Growth (%)

5.2
6
4.0 5.1 5.9 5.8
3.6 5.7
5.4
4 4.3
2.9
2

0
1950's 1960's 1970's 1980's 1990's 2001-03 2004 2005 2006 2007 2008

Slow growing closed economy Fast growing open economy

Transformation
Composition of GDP
Agriculture
21% Average Real GDP growth in last 5 years
Services was 8.5%
52%
Projected GDP growth in 2009-10 is 6.1%

GDP Per Capita is US $ 680

Manufacturing
27%
6
Source: IMF Apr’09, Economic Survey 2008-09 & RBI Bulletin
 The Indian Economy
India’s Trade, FDI and Foreign Exchange Reserves
300
291
Imports(US $ bln) 281

250 Exports(US $ Bln) 253 252

FDI(US $ bln)

200 FE Reserves ( US $ bln) 181.3

149.2 182.6
136 173.1
150 163
107 142
111.5 124.6
100
75.4
78.2 103.1
83.5
50
61.4 63.8
52.7 24.57 27.3
15.7
4.2 3.1 2.6 5.5
0

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Source: Economic Survey 2008-09 & RBI Bulletin

7
 Indian Economy
Exchange Rate is Market Driven Continued Import Tariff Reduction

48.4 49.0
46.0 44.9 44.3 45.5
39.5

25
20
15 12.5
10 8.5
7.5

Exchange Rate Import Tariff

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

* As on March 31, 2009

Source: Economic Survey 2007-08 8

The Surging – Urban India

9
The Emerging – Rural India

10
 What does this mean for us?
The Demand Drivers
Short Term Long Term
Infrastructure development According to McKinsey, the
($500 billion in the next 5-6 middle class will grow from
years) 50 million to 550 million by
2025
Low penetration rate of Cars Continuously Improving
(7-8/1000) Quality resulting in Export
of Automobiles and Auto
components
Easy access to capital Low cost of Skilled
although interest rate is high Manpower & Rapidly
(There is a Credit Squeeze in Short Term) growing Design Capability

11
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

12
 Investments are well Balanced

CARS & MUVs

CVs

2/3 WHEELERS

TRACTORS

13
 Passenger Vehicle Production
(Qty in ‘000 Nos.)

3,500 PROJECTED CAGR

2008-2014 3.0m
Cars = 8.6%
MUV’s = 4%
3,000 Overall=8.5%
277

2001-2008 CAGR
Cars =16.3%
2,500 MUV’s = 11% 2654
Overall=15.5%

2,000 1778 1838

1545
1,500 1309 1620
1210 1532
988 1323
1,000 1113
669 722 1028
842
500 564 608 246
146 182 196 222
105 114 218
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Cars MUVs Total Pass Veh 2014-15

Source: SIAM & ACMA-McKinsey Report 14

 Market Share- Passenger Cars

GM Ford M.- Renault

SkodaAuto Others
Honda Siel 3.0% 1.7%
3.2%
1.0%
0.9% 1.9% 2008-09(Apl-Mar)
Tata Motors
10.7%
Maruti
45.5%
Hyundai
32.1%

M.- Renault
GM Others
1.6, 2%
Honda Siel 3.2% Ford 2.9% 2007-08(Apl-Mar)
4.2% 2.4%

Tata Motors
12.7%
Maruti
Hyundai 47.4%
25.5%

15
 Commercial Vehicles Production
(Qty in ‘000 Nos.)
350 2001-2008 CAGR
M&HCVs LCVs M & HCVs =10.7% 520
LCV’s = 19.6% 549
294 295
300 Overall=14.8%

254
417
250
350 391 226 224
211 219
193
200 275
172
166

150
202 139
121
159 109
95
100 81
64
50

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

16
 2-Wheeler Production
(Qty in million Nos.) ??
24. 0

22. 0

20. 0
CAGR
18. 0
2001-2008
16. 0
10%

14. 0 13 ?

12. 0
8.4 8.0 8.4
10. 0 7.6
6.5
8. 0
5.1 5.6
6. 0 4.3
4. 0

2. 0

-
2009-10 2014-15
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
17
 Expectation Ahead
Future Numbers : 2016

(Numbers in millions)

Segments Domesti Exports Total Global Current

Position Global
c Sales Position
Passenger 3.00 1.10 4.10
Vehicles 7 9
Commercial 0.70 0.08 0.78 4
Vehicles
11
Three Wheelers 0.97 0.50 1.47 1 1
Two Wheelers 32.0 3.00 35.00 2 2
Source : SIAM

18
 “INDIA” – A Base for Compact Cars
Maruti Suzuki : VW :
• New car plant
• Capacity 250K • New plant Investment Euro 400
million
Hyundai : SOP Q3 2009.
• Increase capacity to 600K cars.
Tata Motors : Honda :
• New plant to manufacture Nano Car,
• Selling price USD 2000 • New Capacity 60K
• investment US $ 240 million. Investment $ 250
• Capacity 500K SOP Q1 2009.
Toyota :
• New Capacity 200K cars by 2008
Ford :
General Motors :
• New plant capacity 140K.
• New Investment US$ 500
• SOP Q3 2008.
million
Nissan-Renault :
• 50:50 JV,
• Capacity 400K
• Investment USD 1 Billion 19
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

20
 Auto Component Industry
The Industry is graduating to world-class
Annual Turnover
in Million US $
211 < 1 ~ 5 Million US $
ACMA’s membership comprises 584 companies.

206 > 5 ~ 25 Million US $

84 > 25 ~ 50 Million US $

42 > 50 ~ 100 Million US $

41 > 100 Million US $

Number of Companies
564
Suppliers Embracing
TS 16949 397 Modern Shop-Floor
Practices:
56
- 5-S, 7-W
186 - Kaizen
- TQM
OHSAS
18001
60 - TPM
Deming Award 11 - 6-Sigma
- Lean Manufacturing
TPM Awards 15
21
 Auto Component Industry - Statistics
(Value in US $ Billion)

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Estimated

Turnover 6.730 8.700 12.0 15.0 18.0 19.1

24.6% 29% 38% 25% 20% 6%
Exports 1.274 1.692 2.469 2.673 3.520 3.80
37% 34% 47% 16% 32% 8%
1.428 1.902 2.482 3.600 5.220 6.80
Imports
40% 33% 30% 31% 45% 30%

Investment 3.100 3.750 4.400 5.400 7.200 7.70

7%

Export as % of 18.9% 19.5% 20.5% 19.2% 19.6% 19.9%

Turnover

22
 Comprehensive Product Range

Others
Engine Parts
7%
Electrical Parts 31%
9%

Equipments
10%

Suspension &
Braking Parts
12%

Drive
Body & Chassis Transmission &
12% Steering Parts
19%

23
 Auto Component Turnover

POTENTIAL CAGR
In US$ Billion 2008 – 2015 40
11%
25

20 2002 – 2008 CAGR

19.1 20
23.4%
18
15
15
12
10 8.7
6.7
5.4
5

2002 2003 2004 2005 2006 2007 2008 2009 2016

Source : MOHI Automotive Mission Plan (AMP) 24

 Auto Component Industry – Exports
20-22
(in US$ billion) POTENTIAL
EXPORT CAGR
2008-2015
CAGR 27%
2003-2008 5.9
Exports : 26%

3.8
3.6

2.9
2.5
1.7
1.2

2009 2016
2003 2004 2005 2006 2007 2008

Projected
25
 Direction of Exports

CONTINENT-WISE EXPORT OF AUTO COMPONENT 2007-08

South America Oceania

North America 1% Middle East
4%
22% 7%

Africa
7% Europe
44%
Asia
15%

COMPOSITION OF EXPORTS
Aftermarket OEM/TIER 1
65% 80%
OEM/TIER 1 Aftermarket
35% 20%

2008
1990s
26
Increase in Sourcing Components
from India

27
Auto Component Sourcing

28
Auto Component Sourcing

29
Auto Component Import by Major Countries
Auto Component Import by Major Countries
Year To Date: January - December
Value in US $ Billion %
Reporting Country
2006 2007 2008 Change
United States 100.98 97.72 91.27 -6.60

EU(27 Members) 47.24 54.93 61.13 11.29

China 25.99 28.05 32.35 15.32
Japan 17.75 17.53 19.81 13.00
South Korea 10.92 10.32 11.48 11.28
India 3.60 5.34 7.43 39.00

Auto Component Import by European Union(27 Members)

Year To Date: January - December
% %
Value in US $ Billion
Share Change
Partner Country
2008/200
2006 2007 2008 2008
7

World 47.24 54.93 61.13   100.00 11.3

Japan 10.52 11.65 12.45   20.36 6.8
United States 8.43 8.37 8.88   14.52 6.1
China 5.28 6.65 8.39   13.72 26.2
Turkey 3.57 4.84 5.53   9.04 14.3
South Africa 2.81 3.50 3.80   6.21 8.6
Switzerland 2.79 3.13 3.33   5.44 6.1
Korea South 1.33 2.27 2.62   4.28 15.3
India 1.24 1.69 2.22   3.62 31.2
Taiwan 1.48 1.72 1.95   3.19 13.7
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 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

31
 Automotive Mission Plan 2016

Government of India
SIAM
ACMA

Automotive
Plan 2016

On 29.01.07, the Prime Minister released

Automobile Plan 2006 -2016 to give a road
map to Indian Automobile Industry

Increase turnover to
Increase export revenue Provide employment to
$145 billion by 2016
To $ 35 billion by 2016 from additional 25 million people
from $ 35 billion
$ 4.1 billion at present by 2016
at present

By 2016, the Automotive sector is expected to contribute

10% of the country’s GDP and 30~35% of the Industry

32
 ACMA Vision for 2016
20 : 20 : 1

Growth of the Automotive Component Industry

directly linked with the growth of Automobile
Industry.
Over 70% sales to the OEM

20
20 Achieve $20 billion in Domestic Sales

20:20:1
20:20:1 20
20 Achieve $20 billion in Exports Sales

11 Create 1 million additional Jobs

33
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

34
 Capability of Indian Manufacturers
Tata Nano: The Low Cost Car of The World
Capacity 500K
• The Price Rs 100,000~($ 2000)

Hybrid Scorpio: First in SE Asia!

• It is Diesel Electric
• Parallel, Full Hybrid Vehicle
• Offers
• Start – Stop
• Electric Launch
• Torque Augmentation
• Regenerative Braking
• Seamless, enhanced driving
experience
35
 Capability of Indian
Component Suppliers

1. Conversant in all Global Automotive Standards

2. Investments in R&D to meet OE Customer

requirements

3. Flexibility in small-batch production.

4. Growing IT Capability for Design, Development &

Simulation.

5. Respect for Intellectual Property

36
Some Design & Research
Centres in India

37
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Auto Component Industry of India

Automotive Mission Plan

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

38
 The Way Forward

1. Auto-Component Sector needs US $ 1.5 billion of new

investments every year for next 8 years.

2. Overseas auto-component manufacturers, especially SMEs

should invest more in capacity enhancements and green-
field manufacturing in India – to meet growing domestic
demand for auto-components.

3. Investments in Auto-IT sector is a high potential area.

4. To encourage new wave of partnerships at the Tier 2/3

level covering the entire automotive supply chain to
address not only product technology, but also “Process
Technology”.

39
 Areas of Cooperation

• Manufacturing

• Technology

• Research & Development

• Quality

• Environment

40
 The Addressable Opportunity…

• Establish Partners/JV in India for

- Safety Components
- Auto Electronics, Electromechanical Sub assemblies
- Embedded Systems
- Informatics & Telematics
- New Material
- Simulation Technology
• Collaboration for Manufacturing Excellence and Process Design
• Production Sharing in India & Germany for a Holistic Service
Capability
• Partnering for Global Requirements
• Merger & Acquisition
•

41
 Contents

India-At a Glance

The Indian Economy

The Automotive Industry

Automotive Mission Plan

Supply Industry of India & Global Experiences

Growing Capabilities of the Indian Industry

The Way Forward

ACMA & Its Services

42
Introduction
Automotive Component Manufacturers Association
of India

Role An apex agency of the Indian Automotive Industry

570+ companies forming majority of the

auto component output in the organized sector
Members

ACMA operates on Quality System based

Quality System on ISO 9001:2000

As Automotive Component Manufacturers

Association of India in the year 1982
Re-Christened

Inception
In the year 1959 as The All India Automobile & Ancillary Industries
Association (AIA & AIA)

43
 ACMA and Its Services

Promotes Indian
Automotive Component Industry

Collection &
Technology Quality
Trade Promotion Dissemination of
Up-gradation Enhancement
Information

Vital Catalyst for Industrial

Development

44
 International Business Development
Organize
Organize Business
Business
Promote
Promote India
India Development
Development Delegation
Delegation
as a Brand
as a Brand Overseas
Overseas

Organize
Organize Participation
Participation
Undertake
Undertake Export
Export in Overseas
in Overseas
Promotional
Promotional Automobile
Automobile
Projects
Projects Exhibitions
Exhibitions &
& Fairs
Fairs

Global
Global Interaction
Interaction Facilitate
Facilitate potential
potential
through
through Business
Business Partnership of
Partnership of
Counterpart
Counterpart Association
Association JV / Strategic Alliance
JV / Strategic Alliance

Organize
Organize Private
Private Providing
Providing Working
Working closely
closely Dissemination
Dissemination ofof
Exhibitions
Exhibitions && International
International with
with IPOs in
IPOs in India
India Export Enquiries
Export Enquiries
Suppliers Conference
Suppliers Conference Sourcing
Sourcing Forums
Forums

45
AUTO EXPO 2010

5th – 11th January, 2010, India

46
 ACMA Office
The Capital Court, 6th Floor, Olof Palme Marg, Munirka,
New Delhi – 110 067
Tel: 011-26160315, 26175873, 74
Fax: 011-26160317
E-mail: acma@acma.in,
Website: www.acmainfo.com

47