HIGHLIGHTS OF

INDIAN AUTO ANCILLARY INDUSTRY

BIG STRATEGIC MANAGEMENT CONSULTANTS

3, Hindustan Kohinoor Complex, L B S Marg, Vikhroli (W), Mumbai, India
Tel: 022 67427821-29 Fax 022 67427826

P.O. Box 29815, Dubai, United Arab Emirates.

Tel 00971-4-431 5672 Fax 00971-4-431 5673 URL: www.big-consultants.com

Mazustegui 21- 2a Entreplanta Izquierda , 47806 , Bilbao Vizcaya , Spain

CONTENTS

Indian Economy Scenario

• The Automobile Industry

• Auto Ancillary Industry of India

• Growth Drivers of Auto Industry in India

• Key Players in the Auto Ancillary Industry

• How can BIG Help?

BIG Strategic Management Consultants 2

India is among the top 15 countries in the global economy in terms of GDP at current prices.

INDIAN ECONOMIC SCENARIO

INDIA- GDP GDP Composition 2009

INR Billion (at Current Prices)

70000
60000 Agriculture
17%
50000
40000
32,811
26,588 36,064
30000 20,696
18,763
20000 16,704
11,173 14,803 10,324
10000 9,617 11,550
5,893 10,142 Industry
4,950 6,364 7,260 8,957 9,523
0 20%
2003-04 2005-06 2006-07 2007-08 2008-09 2009-10 Services
63%

Primary Secondary Tertiary

Source: International Monetary Fund (IMF)

 After several consecutive years of strong growth, the world economy entered into the worst recession which started in
third quarter of 2008.
 All the advanced economies faced deep economic crisis , as the world GDP dropped by 1.3% in 2009.
 The signs of recovery shall be visible from fourth quarter of 2010.
 The Indian economy which has also been impacted by the global turmoil, posted a growth of 6.7% in FY 2009.

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Indian Economy is expected to grow at the rate of 7.2% in the year 2010 and the growth for the second quarter of 2010 was 8.5%.

INDIAN ECONOMIC SCENARIO

Real GDP Growth Rate: India vs. World

Transformation
15
Growth Rate (in %)

9.2 9.8 9.3  Average Real GDP growth in

10 6.7 7.2
5.4 5.9 5.8 last 5 year was 8.5%.
5 4.3
 GDP Per Capita is INR 48,000
0 -2.2
 Projected GDP growth in
2006 2007 2008 2009 2010
-5 2010-11 is 8.2%
INDIA WORLD

Source: Automotive Components Manufacturers Association of India (ACMA)

INDIA - Growing Trade and Investments

16000 13,718 13,153 13,436
14000 11,927
12000
8,608 8,721
INR Billion

10000 8,547 8,344

7,684
8000 5,874
6000
4000 1,556 1,674
740 1,158 1,287
2000
0
2006 2007 2008 2009 2010*
Imports Exports FDI

Source: Automotive Components Manufacturers Association of India (ACMA)

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CONTENTS

• Indian Economy Scenario

The Automobile Industry

• Auto Ancillary Industry of India

• Growth Drivers of Auto Industry in India

• Key Players in the Auto Ancillary Industry

• How can BIG Help?

BIG Strategic Management Consultants 5

The Automobile industry in India is the seventh largest in the world

INDIAN AUTOMOBILE INDUSTRY MARKET

Manufacturing of Automobiles in India Indian Automobile Industry

16000 (INR 2324 Billion as of 2009)
14000 433
12000
Number (in ‘000)

353 346 340 31.79%

10000
8000 10,500
6000 8,400 8,000 8,400
4000
68.21%
2000 549 417 566
520 2,351
1,545 1,778 1,838
0
2006-07 2007-08 2008-09 2009-10

Passenger Vehicles (in '000) Commercial Vehicles (in '000)

Two Wheelers (in '000) Tractors (in '000) Automotive Auto Ancillary
Source: Automotive Components Manufacturers Association of India (ACMA) Source: Market Forecast and Indicators

 The Indian Automobile Industry is expected to reach the Market size of INR 2684 Billion by the end of 2010 from INR 2324 Billion in
2009.
 The total number of Automobiles on the Indian roads has reached a mark of 2.6 Million in 2009.
 The Indian Automobile Industry contributes nearly 7.5% to the GDP.

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According to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the
expansion of manufacturing facilities of several automobile companies

INDIAN AUTOMOBILE INDUSTRY OVERVIEW

Players: Indian auto industry

INTERNATIONAL
INDIANAUTOMOBILE
AUTOMOBILE BRANDS
BRANDS
 GM  Tata Motors
 Toyota Indian
Auto  Mahindra & Mahindra
 Ford  Bajaj Auto
Industry
 Hyundai  TVS Motors
 Maruti Suzuki  Hero Honda
 Honda Global Indian
OEM OEM  Bajaj Tempo
 Skoda  Ashok Leyland
 Volvo
 Mercedes

INTERNATIONAL AUTO Global Indian INDIAN AUTO

ANCILLARY BRANDS Suppliers Suppliers ANCILLARY BRANDS
 Delphi  Bharat Forge
 Visteon Engineering  Sundram Fasteners
 Bosch &  Rane Group
 Denso Development  Shriram Pistons
 Valeo Companies  RICO Auto
 Thyssen Krupp  Sono Koyo Steering
The Indian auto industry is highly competitive
with a number of global and Indian auto companies present

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CONTENTS

• Indian Economy Scenario

• The Automobile Industry

Auto Ancillary Industry of India

• Growth Drivers of Auto and it’s Ancillary Industry in India

• Key Players in the Auto Ancillary Industry

• How can BIG Help?

BIG Strategic Management Consultants 8

The Indian Auto Ancillary Industry has been navigating through a period of rapid changes with great élan.

INDIAN AUTO ANCILLARY INDUSTRY MARKET

Market Size (Value in INR Crores)

73,924
80,000 There are more than 25,000
70,000 61,603
items and parts that are
60,000 51,336
42,780 produced in Indian Auto
50,000
40,000 Ancillary Industry every
30,000 year.
20,000
10,000
-
2006 2007 2008 2009

Source: Automotive Components Manufacturers Association of India (ACMA)

 The Indian Auto Ancillary Industry grew at a CAGR 20% for past couple of years.
 Having gained the global recognition, the Indian Auto Ancillary Industry exports are placed at around INR 16,000 crores.
 The sector is composed of 500 medium and large players, besides over 5,000 units in the small scale sector.
 Owing to Improved performance by the auto industry in the domestic market as well as on the export front, the overall production
jumped to INR 70,000 crores in 2009.

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Around 4% of the companies operating in the Auto Ancillary segment cater to 80% of the demand emanating from OEMs

INDIAN AUTO ANCILLARY INDUSTRY OVERVIEW

Auto Ancillary Product Segments in

Equipment &
India
Others The Market Segmentation in
17% India region wise in terms of
Engine Parts
31% Auto Ancillary Industry is as
Body & Chases
12% follows:
North- 35%,
Electrical Parts East- 10%,
Drive & 9%
West- 25%,
Transmission &
Steering Parts South- 30%
19%

Suspension &
Braking Parts
12%

Source: Automotive Components Manufacturers Association of India (ACMA)

 An interesting insight provided by a study conducted by the National Council of Applied Economic Research revealed
that the market segments for auto components included OEMs constituting 33%, local components having 25% with the
balance 42% comprising of spurious market including re-conditioned parts. A large part of the spurious or grey market
companies are in the unorganised sector.

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According to Bloomberg in 2009 India surpassed China as Asia's fourth largest exporter of cars.

TYPES OF AUTO ANCILLARY

AUTO
ANCILLARY

Transmission Suspension
Engines and Electrical
and steering and braking Equipments Others
Engine Parts parts
parts parts

Brake and
Pistons and Starter Sheet metal
Gears brake Headlights
Piston rings motors parts
assemblies

Engine
Brake Halogen Body and
valves and Wheels Spark plugs
linings Bulbs chassis
parts
Fuel-
Electric
injection Steering Shock Wiper
ignition Fan belts
systems & systems absorbers motors
systems
carburetors
Cooling
Dashboard Flywheel Pressure die
system and Axles Leaf springs
instruments magnetos castings
parts

Hydraulic
Power train Other panel Other
Clutches pneumatic
components instruments equipments
instruments

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CONTENTS

• Indian Economy Scenario

• The Automobile Industry

• Auto Ancillary Industry of India

Growth Drivers of Auto Industry in India

• Key Players in the Auto Ancillary Industry

• How can BIG Help?

BIG Strategic Management Consultants 12

It is estimated that the total turnover of the automotive industry in India would be in the order of USD 122-159 Billion by 2016.

GROWTH DRIVERS OF INDIAN AUTOMOBILE INDUSTRY

Availability
Increasing
of Low Cost
demand for
Skilled GROWTH
vehicles
Labour DRIVERS
OF INDIAN
AUTOMOBILE
Policy
Low-cost and INDUSTRY initiatives to
high-quality promote
standards growth in the
sector

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The major exports of the Auto Components from India are to North America and Europe which is in tune of 27% and 39% respectively.

GROWTH DRIVERS OF INDIAN AUTO ANCILLARY INDUSTRY

Investments announced by global

and domestic automobile Prominent Investments by
manufacturers promises the Government & FDI policy for the
emergence of India as a global hub sector
for auto components.

GROWTH OF
INDIAN
AUTO
ANCILLARY
SECTOR

Technology Upgradation and

Increase in Contract Manufacturing
and OEM Manufacturing. Innovation

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CONTENTS

• Indian Economy Scenario

• The Automobile Industry

• Auto Ancillary Industry of India

• Growth Drivers of Auto Industry in India

Key Players in the Auto Ancillary Industry

• How can BIG Help?

BIG Strategic Management Consultants 15

KEY PLAYERS IN THE INDIAN AUTO ANCILLARY INDUSTRY

W E

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CONTENTS

• Indian Economy Scenario

• The Automobile Industry

• Auto Ancillary Industry of India

• Growth Drivers of Auto Industry in India

• Key Players in the Auto Ancillary Industry

How can BIG Help?

BIG Strategic Management Consultants 17

HOW CAN HELP?

Competitive
Positioning and
Techno-Economic Acquiring Larger
Analysis of New Market Share and
Business Brand Image
Segments & Building
Leveraging
Traditional
approach with
GROWTH

Market Research Modern

for foraying into Technology.
new Business
Segments and
Analyzing the Financial
Current Management
Automobile
Industry in India.

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