Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Demand analysis on Automobile industry in India 2017-18
Similar to Demand analysis on Automobile industry in India 2017-18 (18)
Recently uploaded
Recently uploaded (20)
Demand analysis on Automobile industry in India 2017-18
- 2. Topics 1. INTRODUCING DEMAND ANALYSIS 2. CHARACTERISTICS OF DEMAND 3. DETERMINANTS OF DEMAND 4. ANALYSIS ON AUTOMOBILE INDUSTRY 5. INVESTMENT 6. MARKET SIZE 7. FINANCIAL YEAR ’17 AND ‘18 8. TRENDS IN PRODUCTION 9. TRENDS IN SALES 10. TRENDS IN EXPORTS 11. SLOWDOWN IN AUTOMOBILE SECTOR 12. FALL IN AUTOMOBILE DEMAND 13. CONCLUSION
- 3. “Demand analysis is a research done to estimate or find out the customer demand for a product or service in a particular market.” The Demand Analysis is a process the management makes decisions with respect to the production, cost allocation, advertising, inventory holding, pricing, etc. Although, how much a firm produces depends on its production capacity but how much it must endeavour to produce depends on the potential demand for its product. Demand = Desire + Ability to pay + Willingness to spend FORMULA:
- 4. Demand is the specific quantity that a consumer is willing to purchase. 01. Specific quantity Demand must mean the demand per unit of time, per month, per week, per day. 02. Demand per time Change in the price of a commodity will bring about a certain change in its quantity demanded. 03. Price A place where a set of buyers and sellers meet. 04. Market
- 5. Price of the good or service Tastes and Preferences Income of buyers Seasonality Future expectations Market size Consumer expectations Income Distribution Changes in Propensity to Consume Changes in the Prices of the Related Goods Incomes of the People Number of Consumers in the Market 12 Main Determinants DETERMINANTS OF DEMAND
- 6. Largest in the world with sales increasing 9.5 per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. MARKET facts: Premium motorbikes sales in India crossed one million units in FY18. Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017 – 18. BMW registered a growth of 11% year-on-year in its sales in India at 7,915 units in 2018. Mercedes Benz ranked first in sales satisfaction in the luxury vehicles segment. TWO WHEELER SEGMENT: Dominates the market in terms of volume owing to a growing middle class and a young population STRONG EXPORT GROWTH: Automobile exports grew 14.5 per cent during FY 2019 LEADER IN AUTOMOBILE MARKET: Indian market are expected to make India a leader in the two-wheeler and four wheeler market in the world by 2020. 7th largest manufacturer of commercial vehicles in 2018.
- 7. INVESTMENT In order to keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry during the last few months. Ashok Leyland has planned a capital expenditure of Rs 1,000 crore to launch 20- 25 new models across various commercial vehicle categories in 2018-19. Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to invest US$ 310 million in India Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per year, highest for any luxury car manufacturing in India. The industry has attracted Foreign Direct Investment (FDI) worth US$ 21.38 billion during the period April 2000 to March 2019, according to data released by Department for Promotion of Industry and Internal Trade (DPIIT).
- 8. MARKET SIZE The automobile industry in India is world’s fourth largest, with the country currently being the world's 4th largest manufacturer of cars and 7th largest manufacturer of commercial vehicles in 2018. Indian automotive industry is expected to reach Rs 16.16-18.18 trillion by 2026. Indian automobile industry has received Foreign Direct Investment (FDI) worth Rs.1,49,424 crore between April 2000 and March 2019 The passenger vehicle sales in India crossed the 3.37 million units in FY19 and is further expected increase to 10 million units by FY20 20.65 21.5 23.36 24.02 25.33 29.07 30.92 0 10 20 30 40 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Number of Automobile produced *in Million
- 9. 17.79 18.42 19.72 20.47 21.86 24.97 26.27 0 5 10 15 20 25 30 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Number of Automobile sold *in Million 13% 3% 3% 81% Total production volume Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
- 10. Export analysisAutomobile exports reached 4.63 million vehicles in FY19 Automobile exports grew 14.50 per cent in FY19. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026. Domestic two-wheeler industry is expected to grow at 8-10 per cent during FY19. India will be part of “Global Automotive Triumvirate” - the global BIG 3 in coming 20 years and will also exceed the Indian automotive sales from US market by mid 2030s. 2.9 3.1 3.6 3.6 3.5 4 4.63 0 1 2 3 4 5 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Automobile Exports *in Million
- 11. 3801670 810253 783721 19933739 4010373 894551 1021911 23147057 PASSENGER VEHICLES COMMERCIAL VEHICLES THREE WHEELER TWO WHEELER SALE ANALYSIS ’17 – ‘18 Number of Vehicles* 2016-2017 2017-2018
- 12. Trends in Production According to data released by the Society of Indian Automobile Manufacturers (SIAM), the industry produced a total 2,90,73,892 (29.07 million) vehicles, including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in FY18, against 2,53,29,383 (over 25 million) in FY17, registered a growth of 14.8%. FY18 produced around 4,010,373 (4.01 million) units of passenger vehicles which is 13.79% of the total vehicle produced in the country. 01. Passenger Vehicles The industry produced 8,94,551 (0.89 million) units of Commercial Vehicles (CVs) in FY18 as against 8,10,253 (0.81 million) units in FY17 02. Commercial Vehicles Total three-wheeler production registered a strong growth of 30% to 10,21,911 (over 1 million) units in FY18 from 7,83,721 (0.78 million) units in FY16- 17. 03. Three-wheeler The two-wheelers production surged by 16.12% to 23 million, despite the high base of 19.9 million units. 04. Two-wheeler
- 13. Trends in Domestic SalesSales India is currently one of the largest markets in the world as far as automobile sales are concerned. The industry registered double-digit growth between 1st April 2017 and 31st March 2018. The domestic sales of Passenger Vehicles (PVs) grew at 7.89 % to 32,87,965 (3.28 million) units in 2017-18 01. Passenger Vehicles CV sales registered a strong growth of 20% in 2017-18 02. Commercial Vehicles Sales hit a new record of 635,698 (0.63 mn) units, growing at a whopping 24% growth rate 03. Three-wheeler Touched a new milestone of 20.19 million units, grew at 14.80%, compared with 7% in 2016-17. 04. Two-wheeler
- 14. Trends in Exports According to data released by the Society of Indian Automobile Manufacturers (SIAM), In April-March 2018, overall exports in automobiles increased by 16.12%. Exports declined by (-) 1.51% In FY18 01. Passenger Vehicles Exports declined by (- ) 10.53% in FY18 02. Commercial Vehicles Exports jumped over 40% to 381,002 (0.38 million) units as against 271,894 (0.27 million) units 03. Three-wheeler Recorded highest- ever exports of 2.8 million, growing at 20.29%. 04. Two-wheeler
- 15. The SlowdownIn Automobile sector The pullback has acted as a drag on growth, which is predicted to have slowed for a fourth consecutive quarter to 6.5% in the three months to March, the weakest pace since mid-2017 and almost on par with China. The downfall has been across all vehicle categories. Two-wheeler sales declined by 5 per cent and commercial vehicles, along with passenger vehicles, 8 per cent. 7.1 3.8 6.8 14.3 5.2 0 5 10 15 20 2014-15 2015-16 2016-17 2017-18 2018-19 Slowdown in Automobile sector *in Million
- 17. Conclusion Strong growth in demand due to rising income, middle class, and a young population. Indian automotive industry targeting to increase exports of vehicles five times in 2016-26. The automobile industry is supported by various factors such as availability of skilled labour at low cost, robust R&D centres and low-cost steel production. The industry also provides great opportunities for investment and direct and indirect employment to skilled and unskilled labour.
- 18. THANK YOU
Editor's Notes
- Demand Analysis: Demand analysis is one of the important consideration for a variety of business decisions like determining sales forecasting, pricing products/services, marketing and advertisement spending, manufacturing decisions, expansion planning etc. Demand analysis covers both future and retrospective analysis so that they can analyse the demand better and understand the product/service's past success and failure too.
- Now let me explain the Characteristics of Demand The following are the main features or characteristics of demand that the marketer must keep in mind while analyzing the demand for its product: The demand is the specific quantity that a consumer is willing to purchase. Thus, it is expressed in numbers. The demand must mean the demand per unit of time, per month, per week, per day. The demand is always at a price, e. any change in the price of a commodity will bring about a certain change in its quantity demanded. The demand is always in a market, a place where a set of buyers and sellers meet. The market needs not to be a geographical area. Thus, demand plays a crucial role in the success of any business enterprise. And it must be remembered that demand is always at a price and a particular time period in which it is created.
- The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of commercial vehicles in 2018. The Two Wheelers segment dominates the market in terms of volume owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector. India is also a prominent auto exporter and has strong export growth expectations for the near future. Automobile exports grew 14.5 per cent during FY 2019. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the Government of India and the major automobile players in the Indian market are expected to make India a leader in the two-wheeler and four wheeler market in the world by 2020.
- The automobile industry in India is world’s fourth largest, with the country currently being the world's 4th largest manufacturer of cars and 7th largest manufacturer of commercial vehicles in 2018. Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Indian automobile industry has received Foreign Direct Investment (FDI) worth Rs.1,49,424 crore (US$ 21.38 billion) between April 2000 and March 2019. Domestic automobile production increased at 6.96 per cent CAGR between FY13-19 with 30.92 million vehicles manufactured in the country in FY19. In FY19, commercial vehicles recorded the fastest pace of growth in domestic sales at 17.55 per cent year-on-year, followed by three-wheelers at 10.27 per cent year-on-year. The government aims to develop India as a global manufacturing as well as a research and development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure Project (NATRiP) centres as well as a National Automotive Board to act as facilitator between the government and the industry. Under (NATRIP), five testing and research centres have been established in the country since 2015. NATRIP’s proposal for “Grant-In-Aid for test facility infrastructure for Electric Vehicle (EV) performance Certification from NATRIP Implementation Society” under FAME Scheme which had been approved by Project Implementation and Sanctioning Committee (PISC) on 3rd January 2019.
- Overall, Domestic automobiles sales increased at 6.71 per cent CAGR between FY13-18 with 26.27 million vehicles being sold in FY19. The passenger vehicle sales in India crossed the 3.37 million units in FY19 and is further expected increase to 10 million units by FY20. Two-wheelers dominate the industry and made up 81 per cent share in the domestic automobile sales in FY19. The Indian government has also set up an ambitious target of having only electric vehicles being sold in the country. Indian auto industry is expected to see 8-12 per cent increase in its hiring during FY19. The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country for introduction of electric vehicles (EVs) in their public transport systems under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme. The first phase of the scheme has been extended to March 2019 while In February 2019, the Government of India approved the FAME-II scheme with a fund requirement of Rs 10,000 crore (US$ 1.39 billion) for FY20-22. Number of vehicles supported under FAME scheme has increased to 192,451 units in March 2018 from 5,197 units in June 2015. On 29th July 2019, Inter-ministerial has sanctioned 5,645 electric buses for 65 cities. Premium motorbike sales in India crossed one million units in FY18. During January-September 2018, BMW registered a growth of 11 per cent year-on-year in its sales in India at 7,915 units. Mercedes Benz ranked first in sales satisfaction in the luxury vehicles segment according to J D Power 2018 India sales satisfaction index (luxury). Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017-18.
- Overall automobile exports reached 4.63 million vehicles in FY19, implying a CAGR of 8.11 per cent between FY13-19. Automobile exports grew 14.50 per cent in FY19. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026. Domestic two-wheeler industry is expected to grow at 8-10 per cent during FY19. Also, Luxury car market in India is expected to grow at a 25 per cent CAGR till 2020. The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign investments by 2023. India will be part of “Global Automotive Triumvirate” - the global BIG 3 in coming 20 years and will also exceed the Indian automotive sales from US market by mid 2030s.
- This is a chart representing the sales of various automobile industry vehicles. In the Financial year 2017 and 2018 the most sold automobile mode was the two wheeler compared to the other modes of transport.
- Trends in production of various types of vehicles are a better indicator of performance of the automobile industry. For the FY18, according to data released by the Society of Indian Automobile Manufacturers (SIAM), the industry produced a total 2,90,73,892 (29.07 million) vehicles, including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in FY18, against 2,53,29,383 (over 25 million) in FY17, registered a growth of 14.8%. The FY18 produced around 4,010,373 (4.01 million) units of passenger vehicles, which is 13.79% of the total vehicle produced in the country. Utility vehicles, too, crossed 1 million production milestone in FY18. One out of every three passenger vehicles produced was a utility vehicle. The auto sector witnessed highestever production in the passenger car and utility segment in the FY18. The industry produced 8,94,551 (0.89 million) units of Commercial Vehicles (CVs) in FY18 as against 8,10,253 (0.81 million) units in FY17. Total three-wheeler production registered a strong growth of 30% to 10,21,911 (over 1 million) units in FY18 from 7,83,721 (0.78 million) units in FY16-17. Within three vehicles segment, passenger carriers up nearly 40%. In terms of the variants, passenger carriers commanded nearly 90% of total production at 8,99,023 (0.89 million) units, with goods carriers accounting for 1,22,888 (0.12 million) units. The two-wheelers production surged by 16.12% to 23 million, despite the high base of 19.9 million units. Within two wheelers the production of scooters crossed 7 million and motorcycles crossed 15 million. India’s emergence as an important production hub for automobiles has also resulted in increase in FDI flows to the sector.
- Trends in Domestic Sales India is currently one of the largest markets in the world as far as automobile sales are concerned. Car manufacturers raised a toast for the financial year 2017-18 as it turned out to be one of their best in terms of sales. The industry registered double-digit growth between 1st April 2017 and 31st March 2018. The year also marked India surpassing Germany as the fourth largest automobile market on a global scale to stand right behind China, the US, and Japan. According to data released by the Society of Indian Automobile Manufactures (SIAM), • Passenger Vehicles: the domestic sales of Passenger Vehicles (PVs) grew at 7.89 % to 32,87,965 (3.28 million) units in 2017-18, against 9.23 % in 2016-17. o Passenger Cars grew at 3.33 % to 2.17 million units, o Utility vehicles expanded at a strong 21% to 0.92 million units. • Commercial vehicle: (CV) segment sales registered a strong growth of 20% in 2017-18, significantly higher than 4% in 2016-17. o medium and heavy vehicles grew 12.48% to 340,313 (0.34 mn) units, o light vehicles expanded at over 25% to 516,140 (0.52 mn) units. • Three-wheeler sales also hit a new record of 635,698 (0.63 mn) units, growing at a whopping 24% growth rate from the previous year. o passenger carriers grew nearly by 29%, o goods carriers grew just under 8%. • Two-wheelers also touched a new milestone of 20.19 million units last year, grew at 14.80%, compared with 7% in 2016-17. o Motorcycle sales grew 13.69% to 12.61 million units, o scooters expanded 20% to 6.71 million units. o Mopeds, declined over 3% to 0.85 million units.
- Trends in Exports According to data released by the Society of Indian Automobile Manufacturers (SIAM), In April-March 2018, overall exports in automobiles increased by 16.12%. The two-wheeler segment recorded highest-ever exports of 2.8 million, growing at 20.29%. Scooters and motorcycles individually touched exports peak at 314,000 (0.31 million) and 2.4 million, respectively. • Three Wheeler exports jumped over 40% to 381,002 (0.38 million) units as against 271,894 (0.27 million) units. Of that, people carriers saw a growth rate of over 40% at 3,76,811 units, while goods carriers expanded nearly 45% to 4,191 units. • Passenger Vehicles and Commercial Vehicles exports declined by (-) 1.51% and (-) 10.53% respectively in FY2018 over the same period last year.
- Strong growth in demand due to rising income, middle class, and a young population. Indian automotive industry targeting to increase exports of vehicles five times in 2016-26. Automotive Mission Plan: 2016-26 shows clear vision of government where it aims to develop India as a global manufacturing center. Reforms like GST to help boost the sector’s growth. Incubation center to be set up for startups working in electric vehicles space. Focus shifting on electric cars to reduce emissions. Innovation is likely to intensify among engine technology & alternative fuels. Government aims to build India into an R&D hub. India could be a leader in shared mobility by 2030, providing opportunities for electric and autonomous vehicles. The automobile industry is supported by various factors such as availability of skilled labour at low cost, robust R&D centres and low-cost steel production. The industry also provides great opportunities for investment and direct and indirect employment to skilled and unskilled labour.