Economic factors of maruti suzuki

2. Source: IBEF Automobiles
2020 
 1982 1992-2019
1983-1991
• Joint Venture between Suzuki Motors and
Maruti Udyod, and such similar JVs. The
market started to shift towards buyers
• Sector opened up and delicensing took place.
Large number of OEMs entered the market with
local manufacturing.
• CBU and CKD were allowed in 2001, which
primarily opened the luxury market
• Semiconductor shortage due to COVID-19
led to supply chain issues
• EVs are future and are incentivized by
various government initiatives
Economic
Liberalization
• Closed Market with only 5 major
players, characterized by long waiting
periods and low motivation to
innovate
Evolution of the Indian Automotive Sector:

3. Indian Automobile Segment Share
1.20 3.10
14.60
81.20
Three-wheelers Commercial vehicles
Passenger vehicles Two-wheelers
Overview of the Indian Automotive Sector:
Units produced, sold & exported in India(Mn)
25.33
29.09
30.91
26.35
22.66 22.93
21.86
24.98 26.27
21.55
18.62
17.51
3.48 4.04 4.63 4.75 4.13
5.62
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
FY17 FY18 FY19 FY20 FY21 FY22
Production Sales Exports
• India’s passenger vehicle segment is expected to grow at a CAGR of 9% from $32.7 Bn in 2021 to 54.8 Bn in 2027
• The EV market is expected to grow at a CAGR of 36% until 2026, the current market size is of $7.08 Bn
• The industry is also expecting to grow it’s exports by 500% by 2026
Source: IBEF Automobiles | SIAM

4. Drivers of growth in the segment:
Drivers of growth in
the segment
Source: IBEF Automobiles | SIAM |
-Rising income and proportion of middle class in the economy
-Easy availability of credit due to rise of fintech industry
-High growth in the commercial sector due to increasing infrastructure investment
-Multiple PLI schemes and Make India initiative to drive growth
-India is looking to replace China as a manufacturing hub
-Voluntary scrappage policy to drive demand for new and less polluting ones
-Growing FDI in the automotive sector, 6% in 2022
-FAME Scheme to install 532 charging stations across India
-PM Gati Shakti- Expanding road network and multi modal transport hubs
-Focus on reducing carbon footprints leading to growth of EVs
-Multiple incentives to drive EVs and supporting infrastructure
Demand Growth
Policy Support
Investment in Infrastructure
Shifting focus on EVs

5. Major investments and government initiatives:
Major Investments Government Initiatives
Passenger Vehicles:
• Nissan and Maruti Suzuki are looking to make their small car
manufacturing hub for local as well as export sales with an
investment upwards of $2.5 Bn
• New E-Bike companies like Ather and Ola are committed to invest
more than $55 Mn.
• Mercedes, Skoda, and MG have plans to expand their EV portfolio
with complete assembly in India
Commercial Vehicles:
• Tata Motors to invest $1 Bn in the Electric-Commercial vehicles
segment in the coming 5 years
Allied Systems:
• Multiple investments have been made in battery manufacturing
and battery life cycle management
• Kinetic Green, a EV battery manufacturing company plans to set-
up swapping stations costing $235 Mn
• To improve safety of vehicle and passengers, Bharat NCAP is to be
established
• FAME India scheme I and II, to spread the network of EV Charging
stations
• Production Linked Incentives to attract manufacturers to set-up
their EV and battery plant in India and also aid employment
generation
• Introduction of Battery Swap Policy, making it more viablee for
customers to adopt to EVs
• Vehicle Scrappage Policy, which promotes phasing out old
polluting vehicles
• Electrification of state and city transport facilities(~6000 Nos)
• National Biofuels Policy, with target to blend 20% ethanol with
petrol and 5% bio-diesel
Source: IBEF Automobiles | SIAM

6. Future of EVs in India:
EVs sold in India have leaped from mere 1.19 lakhs in 2020 to 4.19 lakhs (and selling) in 2022. EV market is expected to grow at a whopping CAGR of 49% by
2030 as quoted by India Energy Storage Alliance (IESA)
Progress in Battery Manufacturing
• New-age energy storage
technologies are coming of age
and with global players like
Foxconn entering the market,
battery manufacturing is gaining
traction
• NITI Aayog projects the battery
market to surpass $15 billion
dollars by 2030
Progress in Product Innovation
• Lithium ion battery prices
have dropped by 90% over
the last decade. This has
resulted in a massive cost
reduction
• Hi-tech safety features such
as geofencing and
tempering alert
Phenomenal Potential in the EV space
Narrowing Total Cost of Ownership
• Prices for fuel have been rising staggeringly and costs of ownership of EV
have been plummeting
Positive Regulatory Tailwinds
• Positive regulatory intervention by virtue of schemes like Faster
adoption and manufacturing of hybrid and electric vehicle (FAME) and
Production linked incentive schemes (PLI)
Estimated total cost of ownership of a two-wheeler
Activa Ola Electric Scooter
Upfront cost 85,000 1,10,000
Fuel or charging cost 3,56,250 29,529
Maintenance cost 10,000 6,000
Resale value 35,000 22,000
Estimated cost of ownership 4,16,250 1,23,529
Assumptions
per unit cost of electricity 6
Battery Capacity (in kWh) 3.97
Actual range per full charge 121
Approx. range over time per full charge 100
Mileage of Activa (Kmpl) 40
Cost of Fuel (per litre) 95
Total distance over vehicle life (in Km) 1,50,000
Maintenance cost of Electric scooter is 60% of Activa
Resale Value of Electric Scooter 20% of upfront cost

7. Challenges and Opportunities:
Challenges for the sector
The lack of innovative business models that make it profitable for business to leverage EVs, is the biggest reason for its slow commercialization.
Stricter Regulations:
• BS4 to BS6 transition
• Bharat NCAP standards
• Upcoming emission laws
Supply Chain Issues:
• Semiconductor shortage
• Battery suppliers are low in
numbers
Lack of Charging Infrastructure:
• BS4 to BS6 transition
• Bharat NCAP standards
• Upcoming emission laws
Prices:
• Price of EVs is higher, even after
government incentives
• It takes 4-5 years to recover the
initial high investment
Battery Technology:
• Current battery density low
• Battery disposal issue
Hazards:
• Due to high voltage batteries,
safety needs to be ensured
• Battery fume and liquids are
explosive
Opportunities for the sector
Possible Business Models for faster adoption of EVs:
• Car Leasing- Providing an option to try EVs before customer makes
huge investment
• Contract EV Manufacturing- Due to simplification of assembly process
• Driving style-based insurance- To incentivize safe driving and drive
cost of insurance down for customers
• Charging Infrastructure as a subscription
• Claiming subsidy benefits as a service
Opportunities:
• Employment creation: The industry is expected to generate 50 Mn
jobs by 2030
• Semiconductor manufacturing hub- Foxconn is setting up silicone
foundry in India and it can become substitute to China
• Battery Lifecycle Management and Recycling
Source: IBEF Automobiles | SIAM

8. Thank You!