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Automobilies & Auto Ancillaries Setor Presentation
Automobilies & Auto Ancillaries Setor Presentation
OVERVIEW
INDUSTRY CLUSTERS
The automobile industry is concentrated in 4 key regions
North: Delhi-Gurgaon-Faridabad
West: Mumbai-Pune-Nashik-Aurangabad
East: Kolkata-Jamshedpur
South: Chennai-Bengaluru
Source: ACMA
SALES TRENDS
25000000
35
3573806
20000000
2898907
2937905
3110584
25
2319956
20
15000000
1804426
Sales
15
10000000
15481381
5000000
30
17361769
17793701
18423223
19752580
Percentage change
10
5
12295397
0
0
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
-5
Year
Domestic
Export
%DOMESTIC
%EXPORT
MARKET SEGMENTS
Motorcycles
Two Wheelers
Scooters
Mopeds
Automobile
s
Goods carriers
Three Wheelers
Passenger
carriers
Passenger cars
Passenger
Vehicles
Utility vehicles
Multi purpose
vehicles
Commercial
Vehicles
Tractors
Light
commercial
vehicles
Medium
commercial
vehicles
Heavy
commercial
vehicles
Commercial
Vehicles
9%
13%
3%
3%
Passenger Vehicles
Commercial Vehicles
Three Wheelers
27%
45%
Two Wheelers
Passenger
Vehicles
Two Wheelers
others
81%
19%
COST BREAKDOWN
Cost Breakdown
Raw Materials
Power & Fuel Cost
Employee Cost
34%
Other Manufacturing
Expenses
57%
5%
1%
2% 1%
Major costs involved in case of the auto industry is raw material cost
Lowering of commodity costs thus have resulted in the escalation of profit
margins for auto sector.
VALUE CHAIN
Transportation
Suppliers
(RM)
Tier 1&2
Suppliers
Automakers
(OEMs)
Recycling
Repairs
Used Vehicle
buyers
Dealers
Customers
Used Vehicle
Retailers
After Sales
Services
Sales
20000000
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
40
1975111
1956378
2084000
2457597
20
1140058
9370951
30
25
1531619
11768910
35
13409150
13797185
14806778
16004581
Percentage change
15
10
5
0
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
-5
year
Domestic
Export
%DOMESTIC
%EXPORT
5%
28%
67%
Key Players
Rural Demand
The scope for rural penetration is huge as only 32 per 1000 inhabitants
have 2W. Good monsoon, increased penetration of the players in terms of
dealership network will fuel growth
Favorable demographics
Around 33% of Indias population of 1.2 billion belongs to the age bracket
of 20-40 years. 150 million people will be added to the working population in
the next five years. The increasing number of women in the urban work
force will lead to the growth of gearless scooters
KEY CONCERNS
Distribution costs
Dependency on rural economy which in-turn is highly depended on natural
and policy factors.
Environmental and safety concerns
Motorcycle MarketBajaj
Share
Auto Ltd.
3% 1% 7%
25%
1%
14%
4%
45%
Hero MotoCorp
Ltd.
Hero MotoCorp
Ltd.
Honda
Motorcycle &
Scooter India
(Pvt) Ltd
India Yamaha
Motor Pvt. Ltd.
Mahindra &
Mahindra Ltd.
Royal Enfield
Motors
1%
1%
5%
16%
Honda Motorcycle
& Scooter India
(Pvt) Ltd
19%
Mahindra &
Mahindra Ltd.
58%
HMSI
Tvs Motors
Others
Bajaj Auto
9%
13%
40%
11%
27%
India Yamaha
Motor Pvt. Ltd.
Piaggio Vehicles
Pvt Ltd
Suzuki Motorcycle
India Pvt. Ltd.
TVS Motor
Company Ltd.
OUTLOOK
The two wheeler industry which grew at about 9.3 percent in FY 15 saw a
slowdown in the second half of the fiscal due to the weak rural demand
owing to poor and untimely monsoon the poor demand majorly impacted
the demand of the motorcycles. In the current fiscal also in the first half the
demand for the motorcycles is estimated to remain low.
Scooters are expected to drive the demand for the two wheelers owing to
the increasing urbanization, growing middle class and increase in female
work force, convenience factor, higher utility perceived in intra-city
transport, growth in demand from urban and semi-urban areas, and better
rural infrastructure.
Due to the lower commodity prizes the operating margins are expected to
increase in this fiscal.
Due to the slowdown in the global economy exports may get hit on the
wake of weak global demand.
India is the worlds foremost producer, consumer and exporter of threewheelers (3W) over 40 % of the worlds three wheeler ply on the Indian
roads.
The domestic market has registered an impressive growth of 10.8 % during
FY 14-15 in contrast to de-growth of 10.9% witnessed during FY 2014
The demand improvement during the last fiscal has primarily been led by
pick-up in the passenger carrier segment, which has benefited by fresh
permit issuances across various cities.
During the year, three-wheeler exports, which contribute almost 43% to
industry sales, have also grown by a healthy 15.4% over the previous year
on account
ofcontinue
higher demand
frompressure
South-East
primarily
Sales of goods
carriers
to be under
withAsian
new and African
markets
product
introductions
SALES TREND
1000000
60
900000
50
800000
700000
269968
361753
303088
600000
sales
500000
407957
353392
30
173214
20
400000
440392
526024
513281
538290
480085
531927
0
-10
100000
0
Percentage change
10
300000
200000
40
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
-20
Year
Domestic
Export
%DOMESTIC
%EXPORT
Total 3W sales have grown at a CAGR 10% over the past five years
from 2008-09 to 2014-15
Export contribution has also risen from 30% in 2008-09 to 42% in
2014-15 with Bajaj Auto being the largest exporter of three
wheelers.
MARKET SHARE
Greater reach within the area compared to other public transport means like
metro, buses.
Ideal for congested roads of India particularly because of increasing
urbanization.
Inadequacy of public transport to server the last mile transportation needs of
population.
Feasibility of carrying goods from low accessible areas like Tier 3 cities.
Low cost of ownership compared to taxis and small commercial vehicles.
Self-employment opportunity for youth.
Low operating costs both for passenger and goods carriers.
CONCERNS
OUTLOOK
Passenger transportation segment has been the engine of growth for the three
wheelers market and is expected to continue to do so.
The cargo transporters have started preferring LCVs over lorry for carrying the
freight. The goods transportation segment is facing a stiff competition from
the LCVs like Mahindras chota hati, Ashok Leylands LCV and many others
With the continual up- gradation in the LCV segment it is going to get tougher
for the goods transportation segment
Indian passenger industry has seen a drastic change in the post liberalization
era with Indian manufacturers like Maruti Suzuki, Tata Motors, Mahindra &
Mahindra, expanding their operations and global manufacturers like Hyundai,
Honda, Skoda coming up with their range of vehicles from small cars to SUVs
and sedans.
The economic recovery coupled with introduction of new models, easy
availability of finance and aggressive pricing by almost all the players has
helped the industry to post strong growth over the past few years
The domestic PV market has grown at a CAGR of 11.6% in the past five years
and exports growth has slowed at a CAGR of 10.6%
Passenger vehicle penetration in India is as low as 17 vehicles per 1000
people making it one of the lowest penetration levels among the key
developed and developing countries.
The industry hit a low of 4.5% decline in sales during FY 13-14. In 2014-15, a
gradual improvement in consumer sentiments with expectations of a higher
GDP growth, lower vehicle prices following excise duty cuts, and launch of
new models led to a 3.7 per cent growth in sales of cars & UVs. Lower cost of
ownership following a drop in crude oil prices also aided the boost in demand.
SALES TRENDS
3500000
35
30
3000000
559414
508783
444326
596142
622470
25
2500000
20
446145
2000000
15
1500000
10
Sales
2501542
1000000
2629839
2665015
2503509
2601111
1951333
0
500000
-5
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Year
Domestic
Export
%DOMESTIC
%EXPORT
-10
Percentage change
MARKET SEGMENTATION
GROWTH DRIVERS
MARKET SHARE
Passenger Cars Market Share
Maruti Suzuki India
Ltd.
12%
6%
8%
52%
Tata Motors
others
22%
UV Market Share
Mahindra &
Mahindra Ltd.
Maruti Suzuki
India Ltd.
11%
5%
30%
7%
Toyota Kirloskar
Motor Ltd.
14%
Maruti suzuki
MTBL
Tata Motors
7%
11%
27%
others
53%
33%
Tata Motors
OUTLOOK
After witnessing tepid sales in 2014-15, passenger vehicles sales are expected to
improve in 2015-16 on the back of economic growth bolstering the consumer
sentiments
The lower penetration of Passenger vehicles provides a long term opportunity for
the Vehicle manufacturers. OEMS have lined up a slew of new launches in the
compact cars segment to attract first-time customers
While the prices of diesel and petrol have been sliding, the differential between
them has narrowed. This has led to consumers opting for cars operating on petrol
as diesel-operated cars are more expensive. The utility vehicles segment, which
majorly comprises of diesel-variants, will also suffer on account of this. The
segments sales growth is expected to decelerate during 2015-16.
Manufacturers have thus planned new launches in order to spur sales of the
segment. Most of the launches are in the compact utility vehicles segment, which
offers the features of a utility vehicle at a lower price and reduced size. These
vehicles are offered in petrol-variants as well. These will supplement sales of the
utility vehicles segment.
The current share of freight traffic in India through road is around 65%,
which is much higher when compared to other countries like US & China.
The domestic CV industry gradually came out of the down cycle during FY
2015 after two years of demand contraction. During the year, the M&HCV
segment recorded a growth of 16.0% in unit sales primarily led by sharp
uptick in replacement demand for Heavy Commercial Vehicles (HCVs) and
improvement in bus sales on back of STU orders
M&HCV segment seems to have bottomed out, the LCV Truck segment is
still experiencing sluggish trends (down 11.6% YoY) as significant capacity
addition over the past few years and constrained financing environment
amidst rising delinquencies remains a challenge for the segment
MARKET SEGMENTATION
SALES TRENDS
Sales Trend
Sales
1000000
900000
800000
700000
600000
500000
400000
300000
200000
100000
0
92,258
80,027
74,043
77,050
85,782
45,009
532721
2009-10
684905
2010-11
809499
793211
2011-12
2012-13
632851
614961
2013-14
2014-15
Years
Domestic
Export
%DOMESTIC
%EXPORT
70
60
50
40
30
20
10
0
-10
-20
-30
Percentage change
Market Share
CV Market Share
Tata Motors
6%
15%
25%
Ashok Leyland
Ltd.
47%
VECVs - Eicher
Force Motors
Ltd.
3% 2% 2%
VECVs Eicher
11%
55%
29%
Swaraj Mazda
Ltd.
MTBL
Others
Others
Passenger Carriers
Market Share
Tata Motors
Ashok Leyland
Ltd.
Force Motors
Ltd.
13%
9%
40%
18%
VECVs Eicher
others
20%
Tata Motors
Ashok Leyland
Ltd.
MTBL
3% 4%
5%
7%
39%
MTBL
6%
43%
Ashok Leyland
Ltd.
Force Motors
Ltd.
Others
GROWTH DRIVERS
Improved industrial activity
Uptick in agriculturaloutput
Replacement demand
Implementation of Regulations on Overloading
Demand from STU
Demand from unorganized sector
Improved bus operator profitability
KEY CONCERNS
Competition in LCV
High Dependence on economic
scenario
Stiff competition from railways
Slow income growth
High inflation rate
OUTLOOK
Healthy growth in sales coupled with declining steel prices aided in
registering profit at the operating level. New launches in the passenger
vehicles segment along with strong medium & heavy commercial vehicles
(M&HCVs) sales, bolstered sales growth. Improving sales growth has
resulted in better capacity utilization levels, which accompanied by
declining steel prices aided in containing raw material costs
The expected improvement in industrial activity, steady agricultural output
and strong focus on infrastructure project execution, along with continued
capacity constraints in Railways, is expected to drive demand for MHCVs
Ashift towards higher tonnage vehicles, commissioning of dedicated freight
corridors (DFCs), and the structural decline in transporter profitability over
the last 3-4 years are expected to restrict further rise in sales of LCV.
Demand for buses is expected to be driven by steady growth in urban
population and demand from schools and corporate, improved road
infrastructure andincrease in inter-city travel.However, implementation of
metro rail and mono rail projects in several citiescould hit further rise in bus
sales
TRACTORS - OVERVIEW
The Tractor industry has always been a barometer for the state of rural economy in
India.
The tractor industry did well in the last 5 years because of good monsoons, easy
availability of finance and initiatives from government to boost up agriculture and
agricultural machinery industry
Domestic tractor sales volume declined by 13.0% during FY15 owing to host of
unfavorable factors which include delayed and deficient monsoons, decline in Kharif
output, softening commodity prices, modest increases in MSP of major crops, lower
realizations in cash crops, altered rabi sowing pattern owing to delay in Kharif
harvest and farm losses due to extensive crop damages due to unseasonal rainfall
and hail storms in several key rabi cropping states
The Indian tractor industry has been classified into small, medium and large tractors,
based on the engine's horsepower (hp)
Sales Trends
Tractors Sales Trend
800000
80
70
700000
62677
600000
70772
60
75376
63147
500000
Sales
400000
40
37622
62872
30
634151
300000
200000
536891
402586
527768
551463
402286
20
10
0
100000
0
50
-10
2009-10
2010-11
2011-12
Domestic
2012-13
Export
2013-14
%DOMESTIC
2014-15
%EXPORT
-20
Percentage change
MARKET SHARE
Market Share
Mahindra &
Mahindra Ltd.
others; 9%
TAFE
Johndeere; 7%
Mahindra & Mahindra Ltd.; 38%
Escorts Ltd.; 10%
10%
6%
11%
TAFE; 24%
12%
31%
Johndeere
New Holland
India
Escorts Ltd.
16%
26%
Others
14%
30%
9% 15%
10% 43%
23%
Mahindra &
Mahindra
Ltd.
TAFE
Escorts Ltd.
International
Tractors Ltd.
others
TAFE
Escorts Ltd.
Others
others
Mahindra &
Mahindra Ltd.
5%
36%
International
Tractors Ltd.
International
Tractors Ltd.
10%
20%
VST
51%
Mahindra &
Mahindra Ltd.
GROWTH DRIVERS
Landholding size
OUTLOOK
Industry Turnover
Turnover Breakup
2500
2348
2046
Organised
Unorganised
2160
2117
1883
2000
40
35
30
25
1500
1386
20
15%
15
1000
10
85%
500
0
0
Growth rate
-5
Market Segmentation
OEM Market
Capacities and Production in
line with schedule of OEM
Requirements
Quality
Delivery Schedule
Price Competitiveness
Proximity
Demand further segregated
based on various vehicle
segments
Market Segmentation
PVs
HCV
Three w heelers
2%
1%
4%
5%
45%
8%
22%
SCV
Two wheelers
MCV
Backhoe
loaders
Tractors
LCV
Others
Market Segmentation
Replacement Market
Acts as a Steadying Factor
Better Bargaining Power
Export Market
India emerging as a Auto Component hub
India Advantage:
Lower Manufacturing Cost
Superior Product Quality
Shift to High-Tech products
Industry Classification
Industry Breakup
19%
9%
10%
12%
Source: ACMA
31%
19%
Engine Parts
Drive, Transmission &
Steering Parts
Suspension and
braking parts
Equipment
Electrical parts
Others
Major Players
Engine Parts
Drive
Transmission &
Steering Parts
Suspension &
Braking Parts
Equipment
Electrical Parts
Value Chain
Growth Drivers:
Growth in Domestic Automotive Industry
Replacement Demand
Exports healthy growth of 15-20% - Rupee depreciation
Rising share of revenues from non-automotive segment
Onset of festive season
Key Concern:
Threat of poor monsoon
Spurious parts
Free Trade Agreements
OUTLOOK
Infrastructure Development
geographies
The components industry to grow at a relatively faster pace than the
4% 3% 2%
12%
27%
13%
19%
20%
MRF Tyres
Others
CEAT Ltd
Goodyear India
Appollo Tyres
JK Tyres
TVS Srichakra
Ltd.
Falcon Tyres Ltd.
Value Chain
Value Chain
Major Inputs
Natural Rubber
Petroleum Based Products
17%
6%
14%
62%
Value Chain
Major Products
Value Chain
Major Products
11%
Replacement
OEM
Export
28%
61%
Key Concerns:
Cheaper Imports
Radialisation
OUTLOOK
Growth Drivers:
Growth in Automotive Industry
18%
Lead &
Alloys
Polypropyle
ne
Others
2%
80%
OUTLOOK
Conventional sources
Non-Conventional sources
A healthy rise in the sale of batteries can be expected
Both Exide Industries and Amara Raja Batteries are expected to
report a healthy rise in sales
However, the growth in profits will be restricted
Drop in lead prices
Thank You!