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Presentation on Landscape of

Automobile Industry in India



Consulting Club

Evolution of Automobile Industry

Initial Years
Manufacturing was licensed

High Customs duty on import

Steep excise duties &
sales tax

2 Major players:
Premier Automobiles Ltd
& Hindustan Motors

1980s

Entry of MUL, better product,
with government support

Sellers Market

Long Waiting Periods
Early to mid 90s

Sellers market and long
waiting periods

Delicensing in 1993

Removal of capacity
restrictions

Decrease in customs &
excise

Auto finance boom- more
players (foreign banks &
non banking companies,
better schemes.

Mid 90s Early 2000s

Buyers market

Increase in Indigenization

Easy Auto finance

Manufactures diversifying
into related activities:
finance lease, fleet
management, insurance
and used car market
AUTOMOBILE
2 WHEELER 3 WHEELER
PASSENGER
VEHICLE
COMMERCIAL
VEHICLE
MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS
I.C.V. M.C.V. H.C.V.
Trends in the automobile sector
Production of automobiles
4.8
5.3
6.3
7.2
8.5
0
2
4
6
8
10
2000-01 2001-02 2002-03 2003-04 2004-05
m
i
l
l
i
o
n

n
u
m
b
e
r
s
Domestic Sales of automobiles
4.6
5.2
5.9
6.8
7.9
0
2
4
6
8
10
2000-01 2001-02 2002-03 2003-04 2004-05
m
i
l
l
i
o
n

n
u
m
b
e
r
s
Exports of automobiles
0.17
0.18
0.31
0.48
0.63
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2000-01 2001-02 2002-03 2003-04 2004-05
m
i
l
l
i
o
n

n
u
m
b
e
r
s

CAGR 15.4%
CAGR 14.2%
CAGR 39%
Domestic Sales have been growing strongly
Exports have nearly tripled in the last 5 years
Largest three wheeler market in the world
4
th
largest passenger vehicle in Asia
4
th
largest tractor in the market
5
th
largest commercial vehicle market in the world
Segment wise market share
Growth Rates of different segments
23.5
11.3
14.3 14 14.2
0
5
10
15
20
25
Commercial
Vehicles
Passenger
Vehicles
Two
wheelers
Three
wheelers
total
Automobiles
Segments
4

y
e
a
r

C
A
G
R
Two Wheeler
Three
Wheeler
Passenger
vehicles
CVs
The industry has not experienced much change in its structure over the last 6 years
Two- wheelers form the major share of domestic sales
Passenger vehicles lead the exports market(57.4%)
2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles
The growth in the two wheeler market is driven by the motorcycle market and is
expected to grow at 14-15 % YOY
78.63%
13.44%
4.03% 3.9%
The Key Players
Commercial
vehicles
TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force
motors, Eicher Motors
Passenger
vehicle
TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra &
Mahindra, Daimler Chrysler, Hindustan Motors
Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors
Three Wheeler Bajaj Auto, Piaggio India
Bajaj Auto,
24.4%
TVS Motors,
17.7%
Yamaha,
3.8%
Others, 5.8%
Honda
Motors, 8.5%
Hero Honda,
39.8%
Maruti, 50.37
Hyundai, 19.17
Tata Motors,
17.19
Honda, 5.33
Others, 5.73
Two wheeler Passenger vehicle


Favorable Demographics
Improving income curve
Reducing interest rates


Cost Pressure
High Expectations
Inadequate Infrastructure Development
KEY CHALLENGES KEY ENABLERS
Key Focus Areas
Product development( includes collaboration, new products developed)
Vendor base (quality of vendors, skill levels , size etc.)
Manufacturing capability( quality levels, productivity & skill levels, technology )
Service levels
Supply chain
Labor law
Leverage IT

Key Features of Future Auto Policy
Foreign Direct Investment
Import tariff
Incentives for Research and Development (R&D)
Environmental Aspects
Other measures




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