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OVERVIEW | OPPORTUNITIES
Automobiles
OVERVIEW
SIZE
- A US$34-billion industry, exports constitute 5% of revenues
- The Auto Industry in India has witnessed very high growth rates: approximately 14% CAGR in vehicle production in the last 3 years
- 11 million vehicles produced in India in 2006-07
- 1.5 million Passenger Cars; 21% CAGR over the last 4 years
- 8.4 million Two-wheelers (motor cycles and scooters); 13.3% CAGR over the last 4 years
- 0.52 million Commercial Vehicles; 25.7% CAGR over the last 4 years
- 0.56 million Three-wheelers; 31.6% CAGR over the last 4 years
- However, India still has low vehicle penetration
- Only 3 cars, 50 two-wheelers per 1000 individuals
STRUCTURE
- Industry has a mix of large domestic private players (Tata Motors, Mahindra & Mahindra, Ashok Leyland, Bajaj Auto, Hero Honda) and major international players including Suzuki, GM, Ford, Daimler, Toyota, Honda, Hyundai, Renault, VW and Volvo
- All major international players have set up manufacturing capacities
in India
POLICY
- 100% FDI allowed through the automatic route.
Major players and sales volumes
| Company |
Revenues
(US$ million) |
Sales Volume in India (FY 07) |
| |
|
Commercial
Vehicles |
Passenger
Cars |
Two-
wheelers |
Three-
wheelers |
| Major Indian Private Players (FY 07) |
| Tata Motors |
7,679 |
336,590 |
245.556 |
|
|
| Hero Honda |
2,815 |
|
|
3,339,896 |
|
| Bajaj Auto |
2,594 |
|
|
2,379,512 |
329,485 |
| Ashok Leyland |
2,067 |
83,104 |
|
|
|
| TVS Motors |
1,090 |
|
|
1,513,764 |
|
| Major International Private Players (CY
06) |
| Suzuki |
27,049 |
|
582,228 |
|
|
| Hyundai |
66,663 |
|
314,604 |
|
|
| Ford |
160,126 |
|
41,451 |
|
|
| GM |
207,349 |
|
36,894 |
|
|
| Toyota |
204,754 |
|
50,210 |
|
|
| Honda |
94,974 |
|
59,152 |
713,889 |
|
Source: SIAM, Annual Reports
OPPORTUNITY
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India is one of the fastest growing passenger car markets in the world
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International companies have already committed over US$2 billion to manufacturing capacity |
OUTLOOK
- The Automobile Mission Plan envisages industry to grow 5-fold to
US$145 billion by 2016
- Vehicle production expected to increase from 11 million vehicles in 2006-07 to 17 million by 2011-12
- Overall growth of over 9% p.a. will have some segments that outperform
- Passenger cars expected to be the fastest growing segment at a CAGR of 15% over next 5 years
- Heavy trucks and small commercial vehicles (below 1.5T payload) to drive growth in commercial vehicles
POTENTIAL
- India has several advantages making it an attractive destination for investment in the automobile sector
- Low-cost, high-skill manpower with an abundance of engineering talent – the second largest in the world
- Well-developed, globally competitive Auto Ancillary Industry
- Established automobile testing and R&D centres
- Among the lowest-cost producers of steel in the world
- National Automotive Testing and R&D Infrastructure Project (NATRIP), a US$400 million initiative, aims to create the state-of-art dedicated Testing, Validation and R&D infrastructure across the country
- Opportunity to address the global auto market while leveraging the domestic market
- Hyundai, Honda and Suzuki are planning to use India as a global hub for manufacture of small cars and have already committed resources over US$2 billion for capacity expansion
- Nissan Renault have set up alliances with local players for entering the lucrative auto segment
- Indian manufactures – Tata Motors, Mahindra & Mahindra, Bajaj Auto have major expansion plans planned in commercial vehicles and passenger car segment
- Opportunity to set up R&D and Engineering centers
For additional information:
Ministry of Heavy Industries and Public Sector Enterprises (http://dhi.nic.in/dpi),
Society of Indian Automobile Manufacturers (http://www.siamindia.com)
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