Documente Academic
Documente Profesional
Documente Cultură
A Perspective
Emerging Opportunities
2
(Managing Director)
(Managing Director)
A P Arya
A P Arya
(President Heavy and Medium
(President Heavy and Medium
Commercial Vehicles
Commercial Vehicles
PPMMTelang
Telang
(President
(President Light
Lightand
and
Small
SmallCommercial
Commercial
Vehicles)
Vehicles)
P P Kadle
P P Kadle
(ED Finance &
(ED Finance &
Corporate Affairs)
Corporate Affairs)
Rajiv Dube
Rajiv Dube
(Sr Vice President Passenger
(Sr Vice President Passenger
Cars)
Cars)
Engineering
Engineering
Research Centre
Research Centre
Emerging Opportunities
4
70000
60000
50000
40000
30000
20000
10000
0
1997
1998
1999
2000
2001
2002
2003
2004
Year
Source : OICA.net
North America
South America
European Union
Other Europe
Japan
Data excludes 2-wheelers where Asia is not only the largest producer, but is also the largest market
Emerging Opportunities
7
INDIA : An Introduction
India
USA
Population
1080 million
296 million
States
28
50
(+ 7 Union Territories)
Geographical Area
3.3 mn sq km
9.6 mn sq kms
GDP - Nominal
US $ 0.67 trillion
US $ 11.73 trillion
US $622
US $ 3080
US $39,935
US $ 39,496
6.9%
5.4%
After decades of
indifferent
growth, Indias
economy is
accelerating in
the new
millenium..
500
400
586
548
473
5.8%
300
279
3.0%
200
100
0
3.2%
159
4.2%
60
1950
86
1960
118
1970
1980
1990
2000
2003
2004
Year
1950
1960
1970
1980
1990
2000
2003
2004
6.9%
3.6%
Rapid increase in
population in the
last fifty years
have negated the
impact of
economic growth
in the past
500
400
300
546
511
466
3.6%
328
0.7%
0.8%
200
2.2%
199
216
231
1970
1980
164
100
0
1950
1960
1990
2000
2003
2004
Year
1950
1960
1970
1980
1990
2000
2003
2004
10
Goldman Sachs
predicts India to
be the third
largest economy
in the world in
absolute terms
by 2025
Indian Economy
already ranks 4th
in the world in
terms of GDP
adjusted for
Purchasing Power
Parity
%
RANK
COUNTRY
GDP
(Purchasing Power Parity)
1
2
3
4
5
6
7
8
9
10
United States
China
Japan
India
Germany
United Kingdom
France
Italy
Brazil
Russia
11,750,000,000,000
7,262,000,000,000
3,745,000,000,000
3,319,000,000,000
2,362,000,000,000
1,782,000,000,000
1,737,000,000,000
1,609,000,000,000
1,492,000,000,000
1,408,000,000,000
India
Brazil
China
Russia
11
Although it is the most populous country, because of Beijings long-standing one-child policy,
Chinas working age population will begin to decline in the next 10 years. Meanwhile, Indias
youthfulness - 350 million citizens are under age 15 - ensures its workforce will expand for decades,
potentially enabling it to outstrip Chinas economic pace through sheer weight of numbers.
Time Magazine, Issue dated Dec 05, 2005
12
Sources:
Statistical Outline of India 2004-05
13
Emerging Opportunities
14
Automobile production in India has doubled in 4 years, with growth seen across all
four major segments..
By numbers, two wheelers
are the dominant segment
of the Indian Automotive
market
15
16
17
Inhabitants/Vehicle
Developing Markets
Mature Markets
Inhabitants/Vehicle
02
China in 2002
India in 2014
50
China in 2014
10
Mexico
South Korea
Brazil
Poland
Argentina
Czech Spain
Republic
2
$1,000
15
India
100
China
82
Germany
Canada
Australia
Italy
20
Belgium
Austria
UK Sweden
Japan
USA
France
25
30
35
40
Note:
The above includes both Passenger Vehicles and Commercial Vehicles
Sources: Wards Auto Yearbook 2002, EIU, Goldman Sachs BRICs report, DRI 2002, A.T. Kearney analysis
18
YEAR
Emission Regulation
Metro Cities
Rest of Country
2000
BS 2 (Euro II)
BS 1 (Euro I)
2005
BS 3 (Euro III)
BS 2 (Euro II)
2009
BS 4 (Euro IV)
BS 3 (Euro III)
Safety Regulation
Emerging Opportunities
20
7,000,000
989,560
6,000,000
723,330
935,279
5,000,000
669,719
986,208
848,434
4,000,000
640,934
3,000,000
937,506
879,759
5,193,752
4,355,168
3,876,175
2,000,000
2,906,323
2,183,785
1,000,000
0
2000-01
2001-02
Motorcycles
2002-03
Year
Scooters
2003-04
2004-05
Moped
21
Motorcycle
50%
30%
13%
4%
1%
2%
<1%
<1%
15%
28%
2%
46%
9% <1%
82%
8% 10%
Characteristics
23
Key Trends
Eclipse of scooter segment
Executive
Performance
Emerging Opportunities
25
350,000
300,000
250,000
200,000
356,223
150,000
100,000
374,414
276,719
203,234
212,748
50,000
0
2000-01
2001-02
2002-03
Year
2003-04
2004-05
Three Wheeler
26
Sub
Segments
60%
Scooters
India
68%
24%
2%
1%
3%
3%
23%
40%
12%
13%
7%
6%
Passenger
40%
Goods
27
Characteristics
None.
28
Key Trends
Goods segment growing at faster
clip.
29
Emerging Opportunities
30
1,200,000
67,371
181,778
1,000,000
60,673
146,325
800,000
51,441
600,000
0
127,519
63,751
114,479
105,667
960,505
782,562
400,000
513,415
200,000
500,301
557,410
(*)
0
2000-01
2001-02
Passenger Cars
2002-03
Year
Utility Vehicles
2003-04
2004-05
Multi-Purpose Vehicles
31
Passenger
Cars
52%
17%
19%
1%
5%
2%
2%
2%
1%
<1%
<1%
Utility
Vehicles
2%
18%
1%
42%
21%
1%
10%
1%
<1%
4%
<1%
Multi
Purpose
Vehicles
100%
<1%
32
Characteristics
Multiple segmentation across & within major segments
Cars (A, B, C, D & E segments) (Hatchbacks, Sedans, Notchbacks, Station
Wagons & Saloons)
Utility Vehicles (Multi- & Sports Utility)
33
34
Key Trends
Market evolution from Mini
cars to Hatchbacks to
Compact Sedans now evident
Emerging Opportunities
36
350,000
300,000
138,890
250,000
108,917
200,000
83,195
150,000
68,922
65,756
211,143
100,000
50,000
166,123
87,784
96,752
120,502
0
2000-01
2001-02
2002-03
Year
2003-04
2004-05
Medium &
Heavy CV Trucks
64%
24%
8%
3%
<1%
<1%
Buses L, M
& HCV
40%
30%
7%
5%
10%
6%
1%
1%
59%
<1%
32%
4%
3%
3%
<1%
38
Indian CV
Industry
Similar with Global
CV Industry
Characteristics
Indian CV Industry
Cyclical
250
200
Dis-similar to
Global CV Industry
Nosin'000
150
100
CAGR: 5%
50
0
39
40
1000
900
900
Germany
800
Stage
Germany
800
Truck penetration
MHCV / m population
France
700
Truck penetration
MHCV / m population
Gradual
impact
1000
Stage
UK
600
Turkey
Spain
500
400
Australia
Russia
Argentina
300
Portugal
Brazil
200
India
100
China
South Africa
(AL)
Indonesia
India
1
0.5
1.5
France
UK
600
500
Portugal
400
Argentina
300
Hungary
Mexico
Romania
100
Spain
Brazil
200
0
0
700
China
South Africa
Indonesia
India
0
0
Road Density
Paved Highway (km) / Area (km2)
10
15
20
25
Between 2003-04 to 2007-08 each year ~2000 Kms of 4-laned highways will be added
Golden
Quadrilateral
NSEW
Corridors
Feeder
Roads
Completed
15%
2004
21%
2005-07
52%
Between 1997 - 2002, Highway length in China increased by around 15,000 km and CV
volumes nearly doubled from 1.2 mn to 2.1mn
.. Indicative of future likely directions in Indian market
42
Key Trends
Migration from erstwhile Basic
MCV Workhorse to Hub &
Spoke Model
Europe
Japan
Brazil
China
India
et n
k
ar i o
m cat
k ti
uc his
r
T p
so
Emerging Opportunities
44
8,000
1,400
7,000
1,020
6,000
760
5,000
578
4,000
625
7,300
5,710
3,000
4,670
2,000
3,340
3,892
1,000
0
2000-01
2001-02
2002-03
Year
Domestic
2003-04
2004-05
Export
45
Key Trends
Indias emergence as low cost
global sourcing destination.
Competitiveness driven by
Manpower Large pool of
qualified engineers & skilled
technicians at lower cost
Lower investment cost Through
appropriate, low cost automation.
46
Rotating Auto
Electricals
Tyres & Tubes
Heavy Forgings
Wheel Rims
Medium
Low
Product Complexity
High
Hand Tools
Metal bonded &
Moulded Rubber Parts
Aftermarket
itio
s
n
Tra
Plastic Components
ath
P
n
Tier 1 supplier
Customer complexity
47
Rubber Items
Wheel Rims
Overseas Acquisitions
Bharat Forge
(CDP-Germany; Federal ForgeUSA)
Sundaram Fasteners
(Cramlington Precision, UK;
Peiner-Germany)
48
Emerging Opportunities
49
CAGR
Overall 22%
Passenger Veh 57%
2-Wheelers 35%
700,000
International Business
growth presents a huge
opportunity, as well as
a challenge for the
Indian Automotive
Industry
600,000
500,000
29,949
17,432
129,291
400,000
12,255
300,000
200,000
166,413
66,801
68,144
72,005
13,770
27,112
16,263
11,870
366,724
53,165
15,462
100,000
111,138
43,366
265,052
179,682
104,183
0
2000-01
Two Wheelers
2001-02
Three Wheelers
2002-03
Year
2003-04
Passenger Vehicles
2004-05
Commercial Vehicles
50
Opportunities for the industry are emerging both in the areas of Automotive
Manufacturing and Engineering Services
Manufacturing:
Emerging World hub:
Small Cars (Suzuki, Hyundai)
Castings & Forgings
Engineering Services:
Indian IT Majors offering on-shore and
off-shore engineering services to Global
IT players.
(e.g. TCS, TATA Technologies, Infosys,
Satyam)
51
Thank You
52