AUTOMOBILES Overview .. ... Aranca Research, Annual Report Mopeds and electric scooters Scooters...

download AUTOMOBILES  Overview .. ... Aranca Research, Annual Report Mopeds and electric scooters Scooters Motorcycles ... Honda Motorcycle  Scooter India expanded its

of 31

  • date post

    27-May-2018
  • Category

    Documents

  • view

    214
  • download

    0

Embed Size (px)

Transcript of AUTOMOBILES Overview .. ... Aranca Research, Annual Report Mopeds and electric scooters Scooters...

  • For updated information, please visit www.ibef.org April 2018

    AUTOMOBILES

  • Table of Content

    Executive Summary3

    Advantage India..4

    Market Overview ....5

    Recent Trends & Strategies......11

    Growth Drivers and Opportunities15

    Investment Scenario.........18

    Policies and Initiatives...19

    Key Players...........20

    Case Studies............21

    Key Industry Organizations..26

    Useful Information........28

  • For updated information, please visit www.ibef.org Automobiles 3

    EXECUTIVE SUMMARY

    Sources: SIAM, OICA, Aranca research, Business Standard

    Presence of established domestic and international original equipment manufacturers (OEMs).

    Strong market in terms of both, the domestic demand and exports.

    7th largest manufacturer of commercial vehicles

    Growth of 8.85 per cent in sales of cars, utility vehicles and vans during calendar year 2017.

    Automobile exports to grow at a CAGR of 3.05 per cent during 2016-2026.

    Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-18.18

    trillion (US$ 251.4-282.8 billion) by 2026.

    4th largest automobile

    market

    Automobile sector split into four segments , each having few market leaders.

    Two-wheelers and passenger vehicles dominate the domestic demand.

    Two-wheelers account for 80 per cent of domestic demand.

    Commercial vehicle segment expected to grow at 11.07 per cent between 2016-26.

    Segmented Market

    Exports grew at 4.3 per cent CAGR between FY12-17.

    Two-wheeler production estimated to grow at 16 per cent CAGR between FY17-20.

    Domestic sales of passenger vehicles expected to increase at a CAGR of 12.87 per cent between 2017-26

    Strong policy support from government.

    Indian auto industry is expected to see 8-12 per cent increase in its hiring during FY19.

    Positive growth

    prospects

  • For updated information, please visit www.ibef.org Automobiles 4

    ADVANTAGE INDIA

    Sources: Automotive Mission Plan (20162026), Make in India, SIAM

    Strong growth in demand due to rising

    income, middle class, and a young

    population.

    Domestics ales of passenger vehicles

    expected to increase at a CAGR of 12.87

    per cent between 2016-26.

    Utility vehicle sales increased 21.34 per

    cent year-on-year in 2017-18*.

    Cumulative vehicle sales in India is

    estimated to have grown 13.5 per cent in

    FY18.

    Focus shifting on electric cars to reduce

    emissions.

    Innovation is likely to intensify among

    engine technology & alternative fuels.

    Government aims to build India into an

    R&D hub.

    India has significant cost advantages; auto

    firms save 10-25 per cent on operations

    vis--vis Europe & Latin America.

    Cumulative FDI inflow of around US$

    18.413 billion in automobiles sector

    between April 2000 December 2017.

    Automotive Mission Plan : 2016-26 shows

    clear vision of government.

    The government aims to develop India as

    a global manufacturing centre.

    Reforms like GST to help boost the

    sectors growth.

    ADVANTAGE

    INDIA

    Note: * up to February 2018

  • Automobiles

    MARKET OVERVIEW

  • For updated information, please visit www.ibef.org Automobiles 6

    MARKET OVERVIEW

    Sources: Tata Motors, Society of Indian Automobile Manufacturers (SIAM), Aranca Research

    Indian government & Suzuki

    formed Maruti Udyog and

    commenced production in 1983

    Component manufacturers

    entered the market via JV

    Buyers market

    More than 35 market players

    GST to support lower raw material

    cost

    Launch of Automotive Mission Plan

    2016-26 in 2015

    Sector de-licensed in 1993

    Major Original Equipment Manufacturers (OEMs) started

    assembly operations in India

    Imports permitted from April 2001

    Introduction of value- added tax in 2005

    Closed market

    5 players

    Long waiting periods & outdated models

    Sellers market

    Before

    1982 2008

    onwards 1992-2007 1983-1992

  • For updated information, please visit www.ibef.org Automobiles 7

    MARKET OVERVIEW

    Automobile Sector

    Commercial Vehicles Three-wheelers Two-wheelers Passenger vehicles

    Source: Aranca Research, Annual Report

    Mopeds and electric

    scooters

    Scooters

    Motorcycles

    Utility Vehicles

    Passenger cars

    Multi-purpose

    vehicles

    Light commercial

    vehicles

    Medium & heavy

    commercial vehicles

    Passenger carriers

    Goods carriers

  • For updated information, please visit www.ibef.org Automobiles 8

    MARKET OVERVIEW

    Number of automobiles produced in India (in millions) Number of automobiles sold in India (in millions)

    The automotive manufacturing industry comprises the production of commercial vehicles, passenger cars, three & two-wheelers.

    Two-wheelers are by far the most popular form of vehicle in India, taking an 80 per cent share in 2015-16. India became the largest two-wheeler

    market in the world after selling 17.7 million two-wheelers in 2016.

    25.3 million automobiles produced in FY17.

    Total production volume grew at a CAGR of 4.43 per cent during FY12-17 and increased 14.41 per cent year-on-year in April-February 2017-18.

    Automobile exports from India increased 15.81 per cent year-on-year in April-February 2017-18. During the same period, two and three-wheelers

    exports increased 20.30 per cent and 37.02 per cent, respectively.

    17.4 17.8 18.4

    19.7 20.5

    21.9

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    FY12 FY13 FY14 FY15 FY16 FY17

    Source: Society of Indian Automobile Manufacturers (SIAM)

    20.4 20.6 21.5

    23.4 24.0 25.3

    26.4

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    30.0

    FY12 FY13 FY14 FY15 FY16 FY17 FY18*

    CAGR 5.5% CAGR 5.9%

    Note: FY18* - up to February 2018

  • For updated information, please visit www.ibef.org Automobiles 9

    15

    3

    3

    79

    0 20 40 60 80 100

    Passenger Vehicle

    Commercial Vehicle

    Three Wheelers

    Two Wheelers

    MARKET OVERVIEW

    % Share of each segment in total production volume in FY17 Number of automobiles exported (in millions)

    Two-wheelers and passenger vehicles dominate Indian auto market . Sales of two-wheelers are expected to grow 8-10 per cent in FY18

    Overall automobile sales increased 22.77 per cent year-on-year to 2,111,383 units in February 2018.

    Two-wheelers and passenger cars accounted for 79 per cent and 15 per cent of production volume in FY17 respectively.

    Domestic passenger car sales are dominated by small and mid-size cars.

    Over 67 per cent of export volumes comprised of two-wheelers, followed by 22 per cent for passenger cars.

    Source: Society of Indian Automobile Manufacturers (SIAM)

    2.9 2.9 3.1

    3.6 3.6 3.5

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    3.0

    3.5

    4.0

    4.5

    FY12 FY13 FY14 FY15 FY16 FY17

    CAGR 4.3%

  • For updated information, please visit www.ibef.org Automobiles 10

    Porters Five Force Framework Analysis

    Source: Aranca Research

    Low Bargaining power of suppliers

    is low as most of the auto component

    manufacturers are specialised in

    some segments related to only one

    client.

    Bargaining Power of Suppliers

    Low The threat from substitute

    products continues to be low, with

    public transportation being under

    developed even in cities.

    Threat of Substitutes

    High The competition has turned

    more intense after the entry of foreign

    players like Volkswagen and Ford

    with their changed designs to cater to

    Indian market.

    Competitive Rivalry

    Moderate The threat of new

    entrants is generally medium because

    of the brand equity and capital

    intensive nature of the business.

    Threat of New Entrants

    High In a market, like India there is

    lot of bargaining power available to

    the customers as there are variety of

    products available in the same range,

    by different manufacturers.

    Bargaining Power of Buyers

    Positive Impact

    Neutral Impact

    Negative Impact

  • Automobiles

    RECENT TRENDS

  • For updated information, please visit www.ibef.org Automobiles 12

    RECENT TRENDS

    Sources: World Wealth Report (2011) of Merrill Lynch Wealth Management and Capgemini, Aranca Research, media sources

    With sales of around 40,000 luxury cars in 2017, India became the 27th most attractive luxury market in the

    world. Sale of luxury cars stood at 33,279 units in 2016. The luxury car market in India is expected to grow

    at 25 per cent CAGR till 2020. BMW Group India recorded its highest ever annual sales in 2017 at 9,800

    units. During Q1 2018. Mercedes-Benz India crossed 16,000 annual sales for the first time in 2017-18 and

    sold 16,236 units after recording a 24.8 per cent year-on-year during January March 2018.

    Luxury Cars

    Carmakers such as BMW, Audi, Toyota, Skoda, Volkswagen & Mercedes-Benz have started providing

    customised finance to customers through NBFCs