1. Group Members:
Rajkumar S.
Md. Alam
Ashish C.
Presented to
Prof. Gautam
Trehan

2. Sector- Automobile(2 Wheeler)
 Overview:
 CAGR 10-12%
 Sales-3.4 million units in Q3, 2011-12
 YoY- 11%

3. • Domestic volume growth has been strong over the past
five years growing at 11% CAGR.
• Exports have been a significant contributor to overall
volumes with a growth of 27% CAGR over the last 5 years.
• Year to date, the volume growth in two wheelers has
surpassed all other automobile segments.
• The initial investment to set up a new plant isn't very
large. But the time taken can be anywhere
between 18-24 months.
• Brownfield investments are faster and less capital intensive
as compared to Greenfield.

4. Conti
 Nigeria accounts for 40% of all two wheelers sold
with annual demand of 1.2mn.
 Huge export opportunity for Indian OEMs as
economy and affordability levels grow.
 Indian OEMs face stiff competition from Chinese
counterparts.
 Indian products are perceived to be of a better
quality at the same time, though slightly higher
priced.

5. Factors that will drive
growth in the sector
 Extra money in hand
 Fuel economy & Demand
 Rising population
 Changing preferences of Indians
 Untapped rural market

6. Procedures
 Manufactured at plant
 Export the bikes on ship
 Sell the bike under the company
name in the foreign market.
 Offices in the foreign countries

7. DATA

10. Export
Sales
15.07% 4.66%
2.95%
Passenger Vehicles
Commercial Vehicles
77.32% Three Wheelers
Two Wheelers

11. COUNTRY wise data
Export(units)
1,947,198
2000000
1500000
1000000
604000
479163
500000
35306
0
China India Japan USA(june
2012)

13. Current Stats
 In developed markets, two wheelers are seen as a luxury rather
than a necessity. The reverse is true for developing/emerging
economies.
 India is one of the lowest penetrated markets for two wheelers
even amongst emerging economies.
 According to OECD, as per capita income and penetration levels
increase, there is a shift in consumer preference toward high
end/premium motorcycles.
 India is at an inflexion point where penetration is low and per
capita income is rising. Although income distribution is
skewed, the potential demand opportunity for two wheelers is
large.

14. Competitive market
 Year Company
 2008 Mahindra & Mahindra enters two wheeler.
space buy buying out 80% share in Kinetic
Motors
 2010 Harley Davidson launches a line of models
for India
 2011 Ducati launches its showrooms in India
 2011 Aprilla in collaboration with Piaggio to bring in
Vespa 125cc and RSV4
 2011 Hyosung re-enters the market after JV with
Kinetic
 2012 Triumph to unveil its India plans at Auto
Expo 2012

16.  The dynamics of most markets (except
Africa) are similar to India where two
wheelers are predominantly used for
transportation rather than lifestyle
products.

17. Duty Entitlement Pass Book (DEPB)
Scheme:
 The DEPB scheme allowed exporters of two wheelers to
claim reimbursements at 8-9% of the Free On Board (FOB)
value of exports.
 The Government has announced a withdrawal of this scheme
(effective Sept 2011) moving to the Duty Drawback scheme
where reimbursement rates would be around 1-5% of FOB
value.
 The likely impact of this would be for two wheeler exporters
to increase prices and/or reduce dealer margins; both
affecting demand
 in export markets, impacting margins and lowering
profitability.
 Two wheeler manufacturers are showing an increased
focus on exports to contribute to their top line.

18. EXPORT MARKETS
 POSITIVES
 Exports to be a major focus for OEMs – Key markets
include Africa and Latin America.
 Increasing awareness of Indian OEM manufacturers.
 Price competitive in comparison to bigger global brands.
 Indian two wheelers are perceived to be of a better
quality than their Chinese counterparts.

19. Conti
 RISKS & CONCERNS
 Drawback of fiscal benefits (DEPB) affecting
prices and
 Dealer margins
 Increasing focus on exports leading to
slowdown in
 Domestic business.

20. Entry into International
market:
 M&M- Ideal Group in Sri Lanka
 M&M will be selling their products under their name in upcoming year
 Sri Lanka is largest export market for M&M
 Hero MotoCorp
 Exported to Sri Lanka only before 2010
 New market- Nigeria, Latin America, Brazil, Nepal, Bangladesh and other
countries
 So far, they exported 144,000 units which 2.6% of total sales
 Setting up hubs in Nigeria, Brazil to meet the demand.
 BAJAJ AUTO
 Export to developed countries like JAPAN & European Countries
 Tie up with KTM of Japan
 Exported 1 M bikes in 2012
 INDIA YAMAHA
 Export to Japan
 Price- In India:1.15k, In Japan: 2.45k or ¥3.42k

21. Thank you
for
listening