The Indian Automotive Industry DIBD India 25. 9. 12
Introduction to the Indian Automotive Industry Current market situation Development Main segments Investments Scandinavian cases in India SWOT
Current Market Situation The Indian automotive market is one of the worlds most competitive markets with low costs, making it an attractive assembly base for foreign automotive manufacturers India is the second fastest growing automobile market in the world after China Cars is the major segment in the Indian automotive industry with an annual growth rate of more than 19% The large population growth of 20+ million a year and the rise in living standards are two important factors that suggest increasing demand for automotives in India
Current Market Situation The Indian car industry is witnessing a shift in demand from two wheelers to cars due to rising availability of low cost cars and the car s symbol of high prestige Based on the overall production of cars in the country the Indian automotive industry is now the 6 th largest in the world between South Korea at 5 th and Brazil 7 th. Furthermore, India is the fourth largest in the Asian region after China, Japan and South Korea Car brands as Jaguar have an advantage when they are produced in India, since they become less expensive to sell. Imported cars are very expensive to acquire in India, due to the many import licenses and tariffs
Main Segments in the Indian Automotive Industry Passenger vehicles: Cars and buses Commercial vehicles: Electrical car sales is also growing Light commercial vehicles Goods carrier Multi UtilityVehicles, Sports Utility and mini vans Heavy commercial vehicles Trucks, Tempo, Tractor and Tipper/Dumper Three wheelers: Rickshaws, Trolleys, Delivery Vans and Tipper Two wheelers: Scooters, Motorcycles and Mopeds
Indian Automotive Development 45000 40000 35000 30000 Million units 25000 20000 Two & Three Wheelers Commercial Vehicles Passenger Vehicles 15000 10000 5000 0 2009 2010 2011 2016 2021 Year
Key Indian Companies in the Automotive Industry Company name Products Manufactured Manufacturing locations Total group turnover in USD $ TATA Cars, Commercial vehicles Pune, Jamshedpur, Ahmedabad 27.6 billion Maruti Suzuki Cars Gurgaon 7.5 billion Mahindra and Mahindra Commercial vehicles Nashik, Zahirabad, Chennai 7.4 billion Hero Honda Motorcycles Gurgaon 3.9 billion Bajaj Auto Motorcycles Pune, Pantnagar, Aurangabad Ashok Leyland Commercial vehicles Hosur,Pantnagar, Alwar, Bhandara, Chennai 3.39 billion 2.5 billion
Key International Companies in the Indian Automotive Industry Company Name Products Manufactured Manufacturing Locations Total group turnover in USD $ Turnover in India In USD $ Skoda Auto Cars Pune 13.5 billion 767 million Toyota Cars Gurgaon 192 billion NA BMW Cars Mumbai, Pune 69 billion NA
Major Automotive Companies in India WEST NORTH SOUTH
Historical Timeline for Car Brands Entering India 16 14 Number of brands 12 10 8 6 4 2 0 1955-85 1985-90 1990-1995 1995-2000 2000-2005 2005-2010 Period
Future Perspective By 2016, the government is targeting an annual turnover of USD $145 bn, representing 10% of GDP and employing a total of 25 mn staff. A switch to a 30% tariff could be a major boost for European premium vehicle manufacturers such as BMW, Audi and Mercedes, which currently face import tariffs of up to 100%. The economic growth, population expansion and the increasing wealth of individuals are key factors behind the forecasted 18% growth of the auto vehicles sector.
Scandinavian Cases in India Roulunds Braking is a manufacturer of the friction products such as Braking pads, Brake kits for passenger cars and commercial vehicles Roulunds is headquartered in Denmark with manufacturing facility in Haryana in India Roulunds has been operating in India since 1997 Clients of Roulund Braking in India are: Ashok Leyland, BEML, Toyota, SPM Auto Private Limited Roulunds Braking has manufacturing facilities in India, China, France and Denmark Roulunds Braking has around 200 250 employees in India Trelleborg is a Swedish manufacturer of automotive accessories such as Car body, Breaking systems etc. Trelleborg is headquartered in Sweden with operations in Bangalore and Delhi in India. Trelleborg has been operating in India since 1994. Clients of Trelleborg in India are: BEML, L&T, Hindustan Aeronautics Limited, Eicher motors, John Deere, Bosch, Maruti, TATA, Ford, Hindustan Aeronautics Limited. Trelleborg has around 130 employees in India. Trelleborg had a group turnover of USD $3.4 billion and an Indian turnover of around USD $112 million.
SWOT Analysis of the Indian Automotive Industry Strengths Investments by foreign car manufacturers Increase in the export levels Low cost and cheap labor Rise in the working and middle class income Increasing demand for European quality Expert skills in producing small cars good for environment Large pool of engineers Weaknesses Low quality compared to other automotive countries Low labour productivity High interest rate and overhead level Production cost are generally higher than some of the Asian states, such as China Low investment in R&D area Local demand is still towards low cost vehicles, due to low income levels Opportunities Growing population in the country Focus from the government in improving the road infrastructure Rising living standards Increase in income level Better car technology is demanded Rising rural demand The car is a status symbol Women drivers have increased Threats Less skilled labor Lack of technologies for Indian companies Increase in the import tariff and technology cost Imports of two wheelers from the Chinese market in India Smaller players that do not fulfill international standards Increased congestion in the urban areas
Want to know more... Want to get more hands-on knowledge about the growing market opportunities for Danish companies in the huge yet complex Indian market... DIBD offers two points-of-contacts: Anders Kjøller Manager, DI Copenhagen E: adk@di.dk P: (+45) 33 77 37 72 M: (+45) 26 20 45 60 Kunal Singla Director, DI India E: kusi@di.dk P: (+45) 33 77 45 25 M: (+91) 99 30 56 27 61 Anders works as Manager with focus on Asian markets in DI. He has over 10 years of project experience from projects in Asia. Anders has over 4 years of hands-on experience in the field from the Chinese market gained as Director of DI s office in Shanghai (2007-11). Experience from several projects within the marine, food and utility industries amongst others with business development, market studies, implementation of market entry strategies as well as implementation of distributor management. Anders has a M.Sc. Economics & M.A. East Asian Studies. As the director of DIBD s office in Mumbai, Indian-Danish Kunal is the man on the ground in India. Kunal has substantial hands-on experience with various projects (including partnership searches etc.) and recruitment in India. Kunal also has previous experience from the Commercial Department at the Royal Danish Embassy in New Delhi, and DI s Business Law department in Copenhagen. Kunal is fluent in Danish, English and the Indian national language Hindi, and has an extensive network in the Indian business community. Kunal holds a M.Sc. in Business Administration and Commercial Law from Copenhagen Business School, and has studied in the United States and China.