Market Research Report : Auto ancillary market in india 2014 - Sample

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Auto Ancillary Market – India
November 2014

2
AUTO ANCILLARY MARKET IN INDIA 2014.PPT
Executive Summary
Market
Drivers & Challenges
Competition
Auto ancillary market in India is expected to reach INR a9 bn in 20-----, growing at a CAGR of z2 % from INR a5 bn in 20-----
Engine parts account for the largest share, representing b1% of the total auto component market
Trends
Diversification
Rising PE/VC Investments
Focus on Quality
Drivers:
-Growing Automotive Industry
-Healthy Economic Outlook
-Auto Aftermarket Demand
-Growing Investments
-Opportunity from New US IT Compliance Law
Government Initiatives
Union Budget 20-- - --
National Automotive Board
National Automotive Testing and R&D Infrastructure Project (NATRIP)
Export Incentives
ACMA Initiatives
Challenges:
-Exposed to Cyclical Downturns in the Automobile Industry
-Rising Labour Costs and Price of Raw Materials
-Counterfeit Market
-Technical Inefficiency
-Depreciating Currency
Market comprises of a large number of domestic players and steadily increasing participation from foreign players, mainly through mergers & acquisitions
Some of the major players in the market are Player 1, Player 2, Player 3, Player 4, Player 5, Player 6, Player 7, Player 8, and others
Adoption of Green Strategies
Increasing Foreign Presence
Changing Design

3
•Macro-Economic Indicators
•Market Overview
•Segments
•Major Segments
•Major Sub-Segments
•Opportunity Areas
•Export-Import
•Drivers & Challenges
•Government Initiatives
•Trends
•Competitive Landscape
•Strategic Recommendations
•Appendix

4
SAMPLE
Indian auto ancillary market, exhibiting rapid development and is expected …
•Auto ancillary market is one of the fastest growing segment within the manufacturing sector in India
Auto component market is expected to grow at a CAGR of z2 % to reach INR a9 bn in 20-- - -- from INR a5 bn in 20-- - --
•India has the potential to become one of the top auto component economies by 20--
•There are ~x organized players contributing to y% of the total auto component output, while the unorganized sector accounts for the rest
Unorganized auto component sector comprises of ~z players, mainly in the replacement market, or are Tier p and Tier q manufacturers
Primarily, Type 1 dominate the Indian auto component market
•Indian auto ancillary sector has become a lucrative market for the global investors as the country’s overall automobile industry is expected to witness a u-fold increase in demand by 20- along with the business friendly environment, favorable policies and availability of skilled manpower at a comparatively lower cost
Auto Ancillary Market – Overview

5
…to grow at a steady pace over the next five years
a11
a10
a9
a8
a7
a6
a5
a4
a3
a1 a2
0
1,000
2,000
3,000
4,000
INR Y
z2%
z1%
2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017 2018
b4
b3
b2
b1
0
500
1,000
1,500
2,000
2,500
Sales to OEMs Exports Aftermarket Imports
INR bn
Market Segmentation – Sector-wise
Note: Figures for financial year – April to March
Auto Ancillary Market Size & Growth

AUTO ANCILLARY MARKET IN INDIA 2014.PPT 6
Creating x to y mn
additional jobs
Contribution to Employment Generation Contribution to GDP
Auto ancillary industry will generate employment
opportunities and also contribute to country’s GDP
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
+z1%
2020e
a3 – a4
71%
29%
2009
a1
72%
28%
‘000 Person
a2
71%
29%
2015e
Direct Indirect
2015e
+z2%
%
2009 2020e

7
Auto ancillary market in India is expected to witness robust growth in terms of production, exports as well as imports
Auto Ancillary Market – Future Outlook
INR bn
+z%
2021e
a3
p3%
e3%
i3%
2016e
a2
p2%
e2%
i2%
2011
a1
p1%
e1%
i1%
Domestic Production
Exports
Imports

8
SAMPLE
Value Chain Analysis
Raw Material 1, Raw Material 2, R Raw Material 3, Raw Material 4, Raw Material 5
Base Raw Material Producers
Semi Finished Material1, Semi Finished Material 2, Semi Finished Material 3
Semi Finished Material
Type 1
Tier p Manufacturers
Function 1
Type 2
Tier q Manufacturers
Auto part 1, Auto part 2, Auto part 3 etc.
Type 3
Tier r Manufacturers
Function 3, Function 4, Function 5, Function 6, Function 7, Function 8, Function 9
Market 1
Type 4/ Type 5 Market
Market 2
Intermediaries
End Users

9
SAMPLE
Opportunities differ across manufacturers positioned at various levels within the auto ancillary sector
Small Local Entrepreneur
Domestic Tier 2/3 Supplier
Domestic Tier 1 Supplier
India-based global supplier
Opportunity 1
Opportunity 2
Opportunity 3
Opportunity 4

10
SAMPLE
Auto Ancillary Market – Segments (1/3)
Auto Ancillary Market – Segmentation (2010-11)
•Auto components industry has been classified into six broad segments:
•Segment 1 represent the largest segment with b1% share of auto component market
•This is followed by segment 2 with b2% share
•Segment 3 and Segment 4 account for b3% share each in the entire product range
•Segment 5 and Segment 6 represent b5% and b6% respectively
b1%
b7%
b6%
b5%
b4%
b3%
Segment 2
Segment 1
Other
Segment 6
Segment 5
Segment 4
Segment 3

11
SAMPLE
Segment 1
Segment 2
•Finding 1
•Finding 2
•Finding 3
•Finding 4
•These fall into three broad categories:
Category 1
Category 2
Others
•Major parts include:
Part 1, Part 2, Part 3, Part 4, Part 5, etc.
Outlook
•Finding 1
•Finding 2
•Finding 3
•Finding 4
•Major parts include:
Part 6, Part 7, Part 8 and Part 9, Part 10, etc.
Sub-segments
Auto Ancillary Market – Segments (2/3)

12
SAMPLE
Segment 1
•Sub-segment 1
•Sub-segment 2
•Sub-segment 3
•Sub-segment 4
•Sub-segment 5
•Sub-segment 6

13
SAMPLE
Sub-segment 1 (1/2)
Major Players & Strategic Alliances
Product Variation
Sub-segment 1 – Demand
Company
Collaboration
Player 1
Player 7, Country 1
Player 2
Player 8, Country 2;
Player 10, Country 3;
Player 11, Country 4
Player 3
Player 4
Player 5
Player 6
+z%
2020e
2015e
2014e
2013e
2012
2011
mn units
b8%
b1%
b7%
b6%
b4%
b3%
Type 8
Type 3
Type 2
Type 1
Type 7
Type 6
Type 5
Type 4

14
SAMPLE
Sub-segment 1 (2/2)
Market Segmentation
Region-wise
Sector-wise
c4%
c3%
c1%
East
West
North
South
d3%
d1%
Export
OE
Replacement

15
SAMPLE
Opportunity Areas – Summary
Automobile Production Hubs
in India
Opportunity Area for the auto ancillary manufacturers
State 1
State 2 and Surrounding
State 3
State 4 and Surrounding
State 5
Auto ancillary manufacturing plants should be built near the major automobile production or assembly facilities to capitalize on the growing opportunities provided by the existing as well as the emerging auto hubs in India

16
SAMPLE
State 1 – Opportunity Areas
Place 3
Place 5
Place 4
Place 2
Place 6
Place 1
•Company 1
•Company 2
•Company 3
•Company 4
Major Auto Hubs
Major Auto ancillary Hubs
Emerging Auto ancillary Hubs
State 1 – Auto Hub
Auto ancillary units in Place 2, Place 5 and Place 6 play a significant role in supporting the development of State 1 as an auto hub
State 1

17
Auto majors establishing manufacturing plants in State 1, resulting in a higher demand for auto ancillary units
State 1 – Auto Industry Scenario
•Finding 1
Sub-finding 1
Sub-finding 2
•Finding 3
•Finding 4
Sub-finding 3
Sub-finding 4
•Finding 5
Sub-finding 5
•Finding 6

18
SAMPLE
State 1 is likely to attract investment owing to its favourable environment
`
•Finding 1
•Finding 2
•Finding 1
•Finding 2
State 1 –
Growth Drivers
•Finding 1
Sub-finding 1
•Finding 2
•Finding 1
•Finding 2
Government Support
Location Advantage
Human Resource Development
Availability of Land

Growth of exports have been hampered by the turbulent
global economic scenario
• Finding 1
 Sub-finding 1
 Sub-finding 2
• Finding 3
 Sub-finding 3
 Sub-finding 4
• Finding 5
Exports (Value)
Export Destinations 20--
Exports – Overview
b2%
b6%
b5%
b4%
b3%
b1%
Region 6
Region 5
Region 4
Region 3
Region 2
Region 1
INR bn
+z%
2008 2009 2010 2011 2012 2016e 2021e

20
Drivers & Challenges – Summary
Drivers
Growing Automotive Industry
Healthy Economic Outlook
Auto Aftermarket Demand
Growing Investments
Opportunity from New US IT Compliance Law
Challenges
Exposed to Cyclical Downturns in the Automobile Industry
Rising Labour Costs and Price of Raw Materials
Counterfeit Market
Technical Inefficiency
Depreciating Currency

Impact
Growing Automotive Industry Turnover Rising Passenger Vehicle Production
Growth in the automobile industry is expected to generate
huge order…
Growing Automotive Industry (1/3)
• Finding 1
 Sub-finding 1
• Finding 2
 Sub-finding 2
• Finding 3
INR tr
2011
+z1%
2016e
‘000 units
+z2%
2009 2010 2011 2012 2016e 2021e

22
SAMPLE
Union Budget 2012-13 has hit the auto ancillary industry in both advantageous as well as disadvantageous ways
Union Budget 2012-13
•Finding 1
•Finding 2
•Finding 3
Negative Impact
•Impact 1
•Impact 2
•Impact 3
•Impact 4
Positive Impact
•Impact 1
•Impact 2
•Impact 3

23
SAMPLE
`
Diversification
Focus on Quality
Changing Design
Increasing Foreign Presence
Adoption of Green Strategies
Key Trends
Trends – Summary
Rising PE/VC Investments

24
SAMPLE
Public: Domestic Company – Company 1(1/4)
Key People
Products and Services
Company Information
Offices and Centres – India
Corporate Address
Address 1
Tel No.
+91-xx- yyyyyyyyy
Fax No.
+91-ww-zzzzzzzz
Website
www.xxx.com
Year of Incorporation
-
Ticker Symbol
-
Stock Exchange
Bombay Stock Exchange (BSE)
Products
Product 1, Product 2, Product 3, Product 4, Product 5, Product 6, Product 7, Product 8, Product 9, Product 10, Product 11, Product 12, Product 13, Product 14, Product 15, Product 16, Product 17, Product 18, Product 19, Product 20, Product 21, Product 22, Product 23, Product 24, Product 25 and Product 26
Name
Designation
Person 1
MD and Executive Director
Person 2
VP of Finance and Accounts
Person 3
CEO of Subsidiary 1
Person 4
MD of Subsidiary 2
New Delhi
Head Office

25
SAMPLE
Financial Snapshot
Key Ratios
Financial Summary
•The company incurred a net profit of INR a4 mn in FY 2011, as compared to net profit of INR a3 mn in FY 2010
•The company reported total income of INR b4 mn in FY 2011, registering an increase of x% over FY 2010
•The company earned an operating margin of p% in FY 2011, an increase of q percentage points over FY 2010
•The company reported debt to equity ratio of r in FY 2011, an increase of z% over FY 2010
Key Financial Performance Indicators
Indicators
Value (--/07/2012)
Market Capitalization (INR mn)
x1
Total Enterprise Value (INR mn)
x2
EPS (INR)
x3
PE Ratio (Abs) (--/07/2012)
x4
Particulars
y-o-y change (2011-10)
2011
2010
2009
2008
Profitability Ratios
Operating Margin
-
-
-
-
-
Net Margin
-
-
-
-
-
Profit Before Tax Margin
-
-
-
-
-
Return on Equity
-
-
-
-
-
Return on Capital Employed
-
-
-
-
-
Return on Working Capital
-
-
-
-
-
Return on Assets
-
-
-
-
-
Return on Fixed Assets
-
-
-
-
-
Cost Ratios
Operating costs (% of Sales)
-
-
-
-
-
Administration costs (% of Sales)
-
-
-
-
-
Interest costs (% of Sales)
-
-
-
-
-
Liquidity Ratios
Current Ratio
-
-
-
-
-
Cash Ratio
-
-
-
-
-
Leverage Ratios
Debt to Equity Ratio
-
-
-
-
-
Debt to Capital Ratio
-
-
-
-
-
Interest Coverage Ratio
-
-
-
-
-
Efficiency Ratios
Fixed Asset Turnover
-
-
-
-
-
Asset Turnover
-
-
-
-
-
Current Asset Turnover
-
-
-
-
-
Working Capital Turnover
-
-
-
-
-
Capital Employed Turnover
-
-
-
-
-
Improved
Decline
Net Profit/Loss
Total Income
2011
2009
b3
INR mn
INR mn
b1
b4
2008
2010
b2

26
SAMPLE
Key Business Segments Key Geographic Segments
Business Highlights (1/2)
Description News
Overview
• Company is engaged in manufacturing and sales of integrated automotive components
primarily in Country 1, Country 2 and Country 3
 It produces parts for segment 1, part 1, part 2 and part 3 for segment 2,segment 3, and segment 4
and segment 5
 Also, it manufactures components for various sectors, such as the sector 1, sector 2, sector 3, sector
4, sector 5, sector 6 and sector 7
Fund Raising
• In Mar 201--, company had raised ~INR x bn via issuance of foreign currency convertible
bonds to fund acquisitions and other capital investments
 Previously, in Jan 20--, company’s board was allowed to raise ~INR y bn via foreign debt instruments,
such as GDRs, ADRs, FCCBs or other securities convertible into equity
0%
50%
100%
2011
x2%
India
Finding 2
0%
50%
100%
2011
x1%
Automotive Components
Finding 1

27
SAMPLE
`
Recommendation 1
Recommendation 2
Recommendation 5
Recommendation 4
Recommendation 3
Key Recommendations
Strategic Recommendations – Summary

28
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Auto Ancillary Market– India report is part of Netscribes’ Automotive and Logistics Series.
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Market Research Report : Auto ancillary market in india 2014 - Sample