Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Auto and Auto Components - 4x growth expected in the next 10 years

1,631 views

Published on

Auto and Auto Components - 4x growth expected in the next 10 years

Published in: Automotive
  • Be the first to comment

Auto and Auto Components - 4x growth expected in the next 10 years

  1. 1. Auto and Auto Components - 4x growth expected in the next 10 years
  2. 2. © Confederation of Indian Industry Content  Sectoral Overview  The Potential  Current Growth Drivers  Major Challenges faced 2
  3. 3. © Confederation of Indian Industry 3 Sectoral Snapshot 6th Largest Globally by production (~23.3 Million) 7% Sector’s Contribution to GDP 100% FDI allowed under automatic route ~45% Sector’s Contribution to Manufacturing GDP ~9% of total FDI captured by Auto Sector (Jan 14 – Jun 15) ~19 Million employment generated by sector Source: SIAM, ACMA, FDI Markets FDI – Foreign Direct Investment
  4. 4. © Confederation of Indian Industry 4 Evolution of Sector – Automobiles 1897 – First Car on Indian Roads Early-mid 20th Century – Market dominated by Premier and Hindustan Motors 1981 – Inception of Maruti Udyog Limited 1991 – Post Liberalization foreign players like Toyota, Hyundai, Honda etc. entered the Indian market 2016 - Indian Automobile industry soon to be third largest Automotive market in the world by Volume
  5. 5. © Confederation of Indian Industry 5 Evolution of Sector – Automotive Components 1980 - 2000 – Proliferation of SME’s as demand for passenger cars and motorcycles increases In 2000s – new entries decelerated due to necessity of high technology which raised the initial investment amount, but exports of Auto Replacements increased as a result. 2009- 2015 sector consistent growth of ~ 11% and is poised to be a USD 115 Billion industry by 2020- 21
  6. 6. © Confederation of Indian Industry 6 Advantage India Strong Demand - All major sub-segments are likely to grow ~ 5-10% yoy for next 5 years owing to domestic demand and strong export potential High Competitiveness - Both OEMs and Component manufacturers have developed strong core capabilities and are globally competitive Conducive Regulatory environment - Industry and Government are broadly aligned on the importance of the sector and support its growth Potential - As per the Automotive Mission Plan II 2016-2016 the Auto and Auto Component industry is likely to grow 3-4 times from ~USD 70 Billion to USD 280 Billion in the next 10 years OEMs – Original Equipment manufacturers
  7. 7. © Confederation of Indian Industry 7 Segment-wise Snapshot Industry CAGR (2015-2025) Heavy Commercial Vehicles (HCV) 8.4% Two & Three Wheelers 8.1% Passenger Vehicles 11.3% Automotive Batteries 6.0% Auto-Electricals & Electronics 12.3% Sector CAGR (2007-2015) Automobiles 11.72% Automotive Components 12.08%1 Source: SIAM, ACMA, TechSci Research, Frost and Sullivan 1 Figure is for period of 2008-2016 (expected)
  8. 8. © Confederation of Indian Industry 8 Current Growth Drivers Policy and Eco-system 1. The Automotive Mission Plan 2006-16 (AMP I 2016) and AMP II – 2016-2016 outline the growth aspiration and roadmap for the sector to help align goals of government and industry 2. DHI’s FAME scheme aims at promoting faster adoption of electric vehicles. 3. Support for development of Auto Electronics through the NEMP scheme 4. NATRIP helps industry to adopt and implement global performance standards Industry Evolution and Capabilities 1. Capabilities across value chain from vehicle to component manufacturing 2. Several world class Tier 1,2,3 suppliers, with significant number of Deming Awardees. 3. Four large auto manufacturing hubs across the country 4. India is the leading hatchback and sub 4 metre passenger vehicle manufacturer 5. One of the largest tractor manufacturers in the world Market Dynamics 1. 2wheeler and 3 wheeler - The top 5 players hold 87.3% of the market share. 2. HCV industry – Competition has increased with entrance of new OEMs. Overall market is highly concentrated, where top 5 companies form up to 85% of market share 3. Auto Electricals – Market concentration is low in this sector compare to other Automotive sectors. Top 5 players hold 60% market share. 4. Auto Batteries - The market is highly concentrated, where 70% is held by top 5 companies. Source: Frost and Sullivan
  9. 9. © Confederation of Indian Industry 9 Major Challenges faced by sector Environment and Sustainability Global Eco-system Regulatory • Creation and adoption of eco-system and technologies for implementing BS VI fuel norms • Organized mechanism for scrapping of old vehicles • Eco-system challenges for adoption of Green technologies • Component manufacturers face severe threat from Chinese manufactures for the global market • Volatility in fuel prices • Sluggish global economy • Customs duty on high-end vehicles and transfer pricing issues • Significant excise duty • Ban on high capacity Diesel cars BS VI – Bharat Stage 6

×