1. AUTOMOBILE INDUSTRY IN INDIA
ABSTRACT
With the help of historical
data, segments of
Automobile Industry are
projected. Indian
Automobile Industry is one
of the World’s top growing
industry and showing great
global expansion
Swaroop Pandao
swarooppandao@gmail.com
2. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Automobile Industry in India
Introduction
The automobile industry in India is expected to be the world's third largest by 2016, with the
country currently being the world's second largest two-wheeler manufacturer. Two-wheeler
production is projected to rise from 18.5 million in FY15 to 34 million by FY20.
Furthermore, passenger vehicle production is expected to increase to 10 million in FY20
from 3.2 million in FY15.
Automobile exports grew at a CAGR of 14.65 per cent during 2010-15. Passenger Vehicles,
Commercial Vehicles, Three Wheelers and Two Wheelers grew by 6.89 per cent, 13.77 per
cent, 18.69 per cent and 16.60 per cent CAGR during 2010-15. Two wheelers accounted for
the largest share of exports at 69.4 per cent in FY15. Passenger vehicles comprised a sizeable
16.7 per cent of overall exports. Exports of three wheeler vehicles registered around 11.1 per
cent share in exports in FY15.
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.
Alternative fuel has the potential to provide for the country's energy demand in the auto
sector as the CNG distribution network in India is expected to rise to 250 cities in 2018 from
125 cities in 2014. Also, the luxury car market could register high growth and is expected to
reach 150,000 units by 2020.
List of Top Automobile Companies in India
Tata Motors
Maruti Suzuki India Ltd
Hyundai Motor India Limited
Mahindra and Mahindra Limited
General Motors India Limited
Hero MotoCorp Limited
Bajaj Auto
Honda Cars India Limited
Toyota Motor Private Limited
Hindustan Motors
3. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Production in Automobile Industry
The Automobile Industry produced a total of 233,66,246 vehicles including passenger vehicles,
commercial vehicles, three-wheelers and two-wheelers in April-March 2015 as against
215,00,165 in April-March 2014, registering a growth of 8.68%.
Category-wise Production in Automobile Industry
Category 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Passenger
Vehicles 23,57,411 29,82,772 31,46,069 32,31,058 30,87,973 32,20,172
Commercial
Vehicles 5,67,556 7,60,735 9,29,136 8,32,649 6,99,035 6,97,083
Three Wheelers 6,19,194 7,99,553 8,79,289 8,39,748 8,30,108 9,49,021
Two Wheelers 10512903 13349349 15427532 15744156 16883049 18499970
Grand Total 140,57,064 178,92,409 203,82,026 206,47,611 215,00,165 233,66,246
Here we can see,
production trend line is
constantly falling over the
years. But in 2014-15, it
nearly stabilised. From
here on we can expect the
auto industry to give
some predictable growth
rise in the near future. So
with respect to the data, it
has been clearly
forecasted with the
expectation of the
constant growth. Two
wheelers are looking in a
good shape to go with
better statics.
0%
5%
10%
15%
20%
25%
30%
35%
40%
2010-11 2011-12 2012-13 2013-14 2014-15
Production Trend(CAGR)
Passenger Vehicles Commercial Vehicles
Three Wheelers Two Wheelers
4. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Production Forecast
Category 2015-16 2016-17 2017-18
Passenger
Vehicles 3445584 3721230 4018929
Commercial
Vehicles 731937 775853 830163
Three Wheelers 1043923 1158754 1297805
Two Wheelers 20904966 23831661 27406410
Grand Total 261,26,410 294,87,500 335,53,308
CAGR for Passenger
Vehicles, Commercial
Vehicles, Three Wheelers
and Two Wheelers are 6%,
4%, 9% and 12%
respectively. Two-
Wheelers are holding some
grip to move Automobile
higher.
Sales in Automobile Industry
The sales of Passenger Vehicles grew by 3.9% in April-March 2015 over the same period last
year. Within the Passenger Vehicles segment, Passenger Cars and Utility Vehicles grew by
4.99% and 5.3% respectively, while Vans declined by 10.9%.
The overall Commercial Vehicles segment registered a de-growth of 2.83% over the same
period. Medium and Heavy Commercial Vehicles grew by 16.02% and Light Consumer
Vehicles declined by 11.57%
Three-Wheelers sales grew by 10.8% over the same period. Passenger Carriers and Goods
Carriers grew by 12.16% and 5.27% respectively.
Two-Wheelers registered a growth of 8.09%. Within Two-Wheelers segment Scooters, Motor-
cycles and Mopeds grew by 25.06%, 2.5% and 4.51% respectively in April-March 2015 over
April-March 2014.
Category-wise Domestic Sales in Automobile Industry
Category 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Passenger
Vehicles
19,51,333 25,01,542 26,29,839 26,65,015 25,03,509 26,01,111
Commercial
Vehicles
5,32,721 6,84,905 8,09,499 7,93,211 6,32,851 6,14,961
Three
Wheelers
4,40,392 5,26,024 5,13,281 5,38,290 4,80,085 5,31,927
Two Wheelers 93,70,951 1,17,68,910 1,34,09,150 1,37,97,185 1,48,06,778 1,60,04,581
Grand Total 1,22,95,397 1,54,81,381 1,73,61,769 1,77,93,701 1,84,23,223 1,97,52,580
5. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Over the period, in
last five years,
Automobiles sales
has been on lower
side. CAGR
successively falling.
But during last year,
segments are
stabilised. Three-
Wheelers has already
gained the
momentum.
Passenger Vehicles,
Commercial Vehicles
and Two-Wheelers
are showing
willingness to head
high.
Sales Forecast
Category 2015-16 2016-17 2017-18
Passenger Vehicles 2783189 3005844 3276370
Commercial
Vehicles 639559 671537 711830
Three Wheelers 558523 592035 633477
Two Wheelers 17925131 20255398 23091153
Grand Total 21906402 24524814 27712830
Sales hasn’t been good so
far. CAGR standings for
Passenger Vehicles,
Commercial Vehicles,
Three-Wheelers and Two-
Wheelers are 6%, 3%, 4%
and 11% respectively.
Exports of Automobile Industry
In April-March 2015, overall automobile exports grew by 14.89% over the same period last
year. Passenger Vehicles, Commercial Vehicles, Three-Wheelers and Two-Wheelers grew by
4.42%, 11.33%, 15.44% and 17.93% respectively during April-March 2015 over the same
period last year.
0%
5%
10%
15%
20%
25%
30%
2010-11 2011-12 2012-13 2013-14 2014-15
Sales Trend(CAGR)
Passenger Vehicles Commercial Vehicles
Three Wheelers Two Wheelers
6. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Category-wise Exports in Automobile Industry
Category 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Passenger
Vehicles 4,46,145 4,44,326 5,08,783 5,59,414 5,96,142 6,22,470
Commercial
Vehicles 45,009 74,043 92,258 80,027 77,050 85,782
Three Wheelers 1,73,214 2,69,968 3,61,753 3,03,088 3,53,392 4,07,957
Two Wheelers 11,40,058 15,31,619 19,75,111 19,56,378 20,84,000 24,57,597
Grand Total 18,04,426 23,19,956 29,37,905 28,98,907 31,10,584 35,73,806
As the Government
has raised the bars and
regulations for the
exports in India, we
can see some dryness
in all segments. Since
2010-2011, only
Passenger Vehicles
have shown some
momentum and
continuously heading
high. Exports need to
be increased to
welcome foreign
currencies.
Exports Forecast
Category 2015-16 2016-17 2017-18
Passenger
Vehicles 678492 746342 835903
Commercial
Vehicles 98649 115420 137349
Three Wheelers 489548 597249 740589
Two Wheelers 2899964 3479957 4245548
Grand Total 3573806 3573806 3573806
Indian Government has given
some relief in export rules and
regulations. So in the future,
Automobile Industry is expected
to milk more export. According to
that segments are forecasted for
three years. But expectations from
the export market are more than
the projections.
-10%
0%
10%
20%
30%
40%
50%
60%
70%
2010-11 2011-12 2012-13 2013-14 2014-15
Export Trend(CAGR)
Passenger Vehicles Commercial Vehicles
Three Wheelers Two Wheelers
7. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Points to Dig Dipper
Slow Local Demand
Global Slow down
Costlier Innovations
Expensive Safety Add-Ins
Dried Exports
Factors determining the growth of the industry
Fuel economy and demand for greater fuel efficiency is a major factor that affects
consumer purchase decision that will bring leading companies across two-wheeler and
four-wheeler segment to focus on delivering performance-oriented products.
Sturdy legal and banking infrastructure
Increased affordability, heightened demand in the small car segment and the surging
income of the Indian population
India is the third largest investor base in the world
The Government technology modernization fund is concentrating on establishing India as
an auto-manufacturing hub.
Availability of inexpensive skilled workers
Industry is perusing to elevate sales by knocking on doors of women, youth, rural and
luxury segments
Market segmentation and product innovation
Government Initiatives
The Government of India encourages foreign investment in the automobile sector and allows
100 per cent FDI under the automatic route. Excise duty on small cars, scooters, motorcycles
and commercial vehicles was reduced in February last year to 8 per cent from 12 per cent to
boost the ‘Make in India’ initiative of the Indian government.
Some of the major initiatives taken by the Government of India are:
Under the Union budget of 2015-16, the Government has announced to provide credit
of Rs 850,000 to farmers, which is expected to boost the tractors segment. The
government is aligning to ensure that at least one family member is economically strong
to support the family. This is expected to improve the sentiments of entry-level two-
wheelers.
The Government plans to promote eco-friendly cars in the country i.e. CNG based
vehicle, hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent
ethanol blending in petrol.
The government has formulated a Scheme for Faster Adoption and Manufacturing of
Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission
2020 to encourage the progressive induction of reliable, affordable and efficient electric
and hybrid vehicles in the country.
The Automobile Mission Plan for the period 2006–2016, designed by the government
is aimed at accelerating and sustaining growth in this sector. Also, the well-established
Regulatory Framework under the Ministry of Shipping, Road Transport and Highways,
plays a part in providing a boost to this sector.
8. Automobile Industry Date: 19/09/2015
Swaroop Pandao
Road Ahead
India is probably the most competitive country in the world for the automotive industry. It does
not cover 100 per cent of technology or components required to make a car but it is giving a
good 97 per cent, highlighted Mr Vicent Cobee, Corporate Vice-President, Nissan Motor’s
Datsun.
The vision of AMP 2006-2016 sees India, “to emerge as the destination of choice in the world
for design and manufacture of automobiles and auto components with output reaching a level
of US$ 145 billion; accounting for more than 10 per cent of the GDP and providing additional
employment to 25 million people by 2016.”
The Japanese auto maker Maruti Suzuki expects the Indian passenger car market to reach four
million units by 2020
The world standing for the Indian automobile sector, as per the Confederation of the Indian
industry is as follows:
Largest three-wheeler market
Second largest two-wheeler market
Tenth largest passenger car market
Fourth largest tractor market
Fifth largest commercial vehicle market
Fifth largest bus and truck segment
