The turmoil started around mid

2007.  Has exacerbated substantially since August 2008.  The Indian Automobile Industry registered a net increment in total sales by 3.31% with a descent CAGR of 10.30%.  Government announced a fresh stimulus to reverse the economic slowdown, taking its total revenue loss to Rs40,000 crore.

Housing bubble bursts

US Housing Market Collapse

Global Financial Crisis 2008-09

The global financial crisis of 20082009 emerged in September 2008 with the failure, merger, or conservatorship of several large United States based financial firms and spread with the insolvency of additional companies, governments in Europe, recession, and declining stock market prices around the globe.

US HOUSING MARKET COLLAPSE

 Easy

access to credit  Relaxed lending standards  Inadequate regulations  Complex credit derivatives  Market collapse

MISTAKES

Wrong belief of housing prices always going up FED overlooked warnings Past data reference illusion High leveraging Miscalculated ratings fooled investors Appetite beyond capacity Slicing and dicing spread the risk but did not eliminate it

Result- Mortgage Market

Housing market nose dives

Sub prime borrower

Investors
Losing faith in the system Broken promises

INVESTMENT BANKS

Nationalized

Bankrupt

CREDIT RATING AGENCIES

INSURERS
Saved by government funding

GLOBAL EQUITY MARKETS

Lose 45% of wealth

MONEY MARKET

CONFIDENCE IN MARKET

SOMEONE GOT LUCKY!

Gold Price (USD per ounce)
Oct,2008 Oct,2007

Alternate investment saw a surge

Oct,2006

400

600

800

1000

LEARNING
THINK BEFORE YOU ACT

SO WATCH THE MARKET CLOSELY

Watch

the money news Stay connected with reality Be well informed. This crisis will most probably take many time, because so many money was lost. The implications are only now appearing. Be conservative.

Risk is good only if you can control it.

 

One of the core industries of the Indian economy. The automotive sector in India is growing at around 18 per cent per annum. Tenth largest automobile industry in the world with an annual production of approximately 2 million units. Is expected to become one of the major global automotive industries in the coming years. Has grown at an impressive 16.82 per cent. Includes the manufacture of trucks, buses, passenger cars, defence vehicles, two wheelers, etc.

n India

is the second largest two-wheeler market in the world. n Fourth largest commercial vehicle market in the world. n 11th largest passenger car market in the world. n Expected to be the seventh largest by 2016.

For every Re.1 invested, auto sector gives back Rs.2.24 to the economy The automobile industrys contribution to the Indias current GDP is ~5% and is expected to be ~10% by 2016 Currently it provides employment to ~10 million people in the country and this is expected to rise to 25 million by 2016.

THE ROLE OF THE INDIAN AUTOMOTIVE COMPANIES IN THIS GROWTH Substantially increasing investments in production capacities Establishing partnerships in India and abroad Investing in or acquiring companies overseas Establishing green field manufacturing footprints overseas

Car penetration in India may be on a low side at present, but the market is young and growing.

continued

Ongoing Massive Road Network Development. Economic factors aid to the growth of the industry. Government initiatives.

IMPACT OF CRISIS ON INDIA

The country does face some downside risks from these international developments.  The risks arise mainly from the potential reversal of capital flows. The adverse effects have so far been mainly in the equity markets. Total net capital flows fell from US$17.3 billion in April June 2007 to US$13.2 billion in April June 2008.

IMPACT OF GLOBAL FINANCIAL CRISIS ON INDIAN AUTOMOBILE SECTOR

Impressive Growth in Domestic Sales

Total Domestic Sales
12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

Impact on Sales of Major automobile players of INDIA India Yamaha Motor sales up 45.3% in March 2009 Maruti Suzuki logs highest ever sales, exports in March 2009 Tata Motors domestic sales down 13% in March 2009 Hero Honda sales up 10% in March 2009 Bajaj Auto two wheeler sales down 15% in March 2009 Ashok Leyland sales down 52.2% in March 2009

EXPORT TREND IN INDIAN AUTOMOBILE SECTOR

Total Exports
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

PRODUCTION TREND IN INDIAN AUTOMOBILE SECTOR

Total Production
12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

DOMESTIC MARKET SHARE

FORECASTED GROWTH volumes and  By 2010 India will take over Germany in salesAT CURRENT Japan by 2012. SITUATIONS
 The Indian automobile component industry is estimated to triple from USD 63 billion to USD 190 billion within a span of six years by 2012.  Estimated turnover USD 12 billion, plus components revenue USD 3 billion  By 2010, India is expected to witness over Rs 30,000 crores of investment.  The Annual revenue from the country's automobile sector could grow to $145 billion by the year 2016.  The contribution of the auto sector to India's gross domestic product is expected to increase to more than 10 per cent by 2016, compared with 3 4 per cent currently.

The automobile sector is growing at a CAGR of

FINDINGS

10.30%. The sector has total sales of 11,254,051 vehicles as compared to 11,175,479 vehicles produced in FY 2008 09. The exports registered a CAGR of 30.68%. Maruti Suzuki still dominates the sector with sales up by 32.1%. Major automobile players TATA and Ashok Leyland registered sales down by 13% and 52.2% respectively. Two wheeler segment dominates the market

with76% market share. Indian automobile expecting huge investments in near future. Nano expected to boost sales.

RECOMMENDATIONS
 Automobile industries need to develop cost effective techniques to boost sales.  The industries can achieve success if they have/develop:
Ability to enhance and vary product mix Sales and distribution service network Access to new technologies Balance between outsourcing and in house

production.

CONCLUSION
nThe Indian automobile industry, though in its nascent stage, is expected to have an impressive impact in the Indian economy. nIt tends to remain insulated from the effects of the global turmoil nThe four wheeler segment is also witnessing tremendous growth nAutomobile industry in India has become the centre of attraction for most of the global automotive giants the world over.