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SUBMITTED BY :

PRIYANKA GARG (059) DEEPAK SHARMA(65) SURMEET(70) ABHISHEK GARG(78) MANJIT KHATRI(94) DEEPAK AGGARWAL(101)

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Overview and historical aspect Current status of automotive industry Auto component market Global standing Investments made in India Growth potential Government initiatives conclusion

Initially, the Indian Auto Component Industry was not competitive enough for the global market due to its:

High cost of raw materials Inferior quality Lower labour productivity Limited demand from vehicle manufacturers Protectionist policies of Indian government

However, a change came after the liberalization of the India economy in 1991 with:
  Abolition

of licensing  Approval given to up to 100 % foreign investment.

Growing at a compound annual growth rate (CAGR) of 28.9 per cent between 2002-03 and 2007-08. Adopted strategy of product portfolio enhancement, market expansion and efficiency improvement to achieve this status Around 500 organised players and more than 600 unorganised players

Estimated 600 companies (FY 2008), giving direct employment to more than 300,000 persons.
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Exporting goods worth US $ 2 billion The Indian Auto component industry is largely dependent on OEMs, which contributes to 60 % of sales, after market (Replacement market) 18.5 % and export 21.5 %.

Engine parts Drive transmission and steering Body/ chasis Suspension and braking equipment electrical others

31% 19% 12 % 12 % 10 % 9% 4%

Indian manufacturers are gaining recognition as global quality players. India shared 0.9% of the global Auto Components Industry in 2005-06. Indias share in world auto components could grow from 0.9% in 2005-06 to over 2.5% by 2015 Many international players including Delphi, Visteon, Bosch and Meritor have set up operations in India. Exports projected to grow at over 30% p.a. Over 60% exports are to Europe and USA. India is also becoming a global hub for R&D.

Product Cars/SUVs

Players Suzuki, Honda, Toyota, Mitsubishi, GM, Ford, DaimlerChrysler, Skoda, Fiat, Hyundai, Tata, M&M

Two-wheelers CVs

TVS, Hero Honda, Bajaj, Yamaha, Kinetic, LML Tata, Ashok Leyland, Tatra, EicherMitsubishi, Swaraj-Mazda, M&M, Volvo Escorts, M&M, L&T, Punjab Tractors, New Holland, ITLRenault, John-Deere, Steyr

Tractors

 Hyundai -

Export Base for Small Cars

Skoda - Hub for exports of Cars to neighbouring


countries

Ford

exporting CKDs of Ikon to South Africa & other countries

 Yamaha - Hub for 125 cc Motorcycles Maruti Suzuki- Exports cars to EU HMSI - Hub for Two Wheelers Exports

Australia 2%

Africa 11%

Others 4%

America 28%

Asia 27% Europe 28%

India's GDP is set to double over the next decade In percentage terms, the automotive industry's contribution should also double In dollar terms, the sector's contribution is set to quadruple to some $145bn The consequence is a remarkable transformation of India's entire economic landscape

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India amongst the most competitive manufacturers of auto components, especially: Metal intensive components: forgings,stampings,castings. Skilled labour-intensive components: machining, wiringharness etc. Hi-tech components: electronic fuel injectors. Opportunity to address the global Auto Components market while leveraging Indias large and growing domestic market Opportunity to set up R&D centres in India Indian technical skills is acknowledged as among the best in the world High level of sourcing of auto components from low cost countries (LCCs) to act as a driver for growth. Potential of over US$5 billion for investment in India.

2002-03 (A) Total Units - 547,083

2007-08 (P) Total Units - 975,703

Mi i 17%

Premi m & Luxury Executi e 2% 0%

M ie i 20%
Mi i 26%

E xecuti e 2%

P ium& rem Luxury 3%

Mi i 19%

Compact 55%

C pact om 56%

 Present estimated size  CAGR (last 5 years)

5.4 mn units per year 10%

Average two-wheelers per 1000 people India China 27 08

Increase in income Increase in standard of living. Relaxation of regulation. Reduction of tariffs on import

Technological, cost and manpower advantage.  Established R&D centers.  India among the lowest cost producers of steel in the world.  India is fourth largest passenger car market in Asia.


Manufacture r
Volvo

Component
Machine and painted castings, forgings, gearbox and engine components & others Engines, gearboxes, others

Value
US$ 90 million

Comments
India is the single sourcing unit FM12 (8 X 4) model sold in South Korea. To source components for the Grande Punto as well as Linea Models. To invest US$ 1 billion. Expects the volume to grow to US$ 400 - US$700 million.

Fiat

US$ 4 million

Ford Motors

Castings and forgings, crankshafts, exhaust manifold, leaf springs, horns, dashboard, door trims Has firmed up plans to source components and aggregates

US$ 150 million

Renault-Nissan

US$ 125 million in next 2 years

First phase to source low end tech for low end models. High-end in second phase. Growing at 20% CAGR Expected to go up by 5 - 10 per cent.

DaimlerChrysler Toyota

Auto components and IT services R-type manual transmission gear boxes global supply, propeller shafts Etc

US$ 125 million 140,000 gear boxes

Manufacturer

Component

Value

Comments

Delphi

Catalytic convertors, steering, piston rods, dsystemsrive shafts etc. AC systems, alternators, panel instrument Assembly FIPs, Common Rail Systems

US$ 250 million (2007 Plan)

Planning further investments in the software wing

Visteon

US$ 56 million in 2002 US$100 million

NA

Bosch

Planning for further investments of US$430 million Plans to increase it to US$ 500 million by 2010 NA Plans to procure US$ 1,000 million worth of components from Low Cost Countries including India

Cummins

Engines and components

US$ 150 million

Tenneco Automotive Deutz

Forgings Engine components

US$ 60 million US$ 70 million

Domestic Private Players: Bharat Forge Limited Tata Auto Component Systems Sundaram Fasteners Brakes India International Private Players: MICO Visteon Delphi

Delphi : Steering System and Wiring harness Bosch : Spark plugs, Fuel Injection equipments, Oil Filters Denso : Auto electric components, alternators, fuel pumps and Radiators Lear : Electronic and Auto electrical components. Johnson Controls: Seating Systems and Controls Visteon : Air conditioning, engine cooling systems. T RW : Engine valves and steering system, Braking system and auto electric components Siemens VDO: Automotive dashboard instruments and accessories. DANA : Clutch, Piston rings, axle housing.

Tata Motors : Daewoo Commercial Vehicle Plant M & M : Jianging Motors Co- China , SAR Auto Products Ltd China Bharat Forge Ltd: Carl Dan Peddnghaus Germany Fedara Forge U S A Imatra Kilsta AB Sweeden ,Scottish Stampings Ltd Scottland Amtec Auto : G K W UK, New Smith Jones Inc of USA , Zelter- Germany UCAL Fuel System: Amtec precision Products Inc USA SFL: Bliesthal Products GMBH for valve guide & valve seat inserts. Precision forging unit of Dana Spicer (UK) Camlington Forge UK Greenfield Plant in Zhejiang- China El Forge Ltd : Shakespeare Forging UK T V S Autolec Ltd: RBI Autoparts SND BHD, Malaysia. Sona Koyo: Fuji Autotec France.

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Proficiency in Understanding Technical Drawings and well conversant in all Global Automotive Standards : American, Japanese, Korean, European Standards etc. Appropriate Automation leading to economic production costs Flexibility in small-batch production. Growing IT Capability for Design, Development & Simulation Respect for Intellectual Property

100% FDI allowed for automobiles and autocomponent industry Reduction in the duty of raw material to 5-7.5% from the earlier 10%. Setting up of R&D Infrastructure Project. Incentives provided to the exporters in terms of Drawbacks and DEPB .
[FOREIGN DIRECT INVESTMENT] [DUTY ENTITLEMENT PASSBOOK SCHEMES]

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Indian auto component industry is one of the largest growing industries in the world. Has a huge scope of investment. Favorable destination for foreign companies to establish their facilities and form alliances with domestic companies. India's labor intensive car industry has become a tremendous job creator and as such a crucial driver of economic growth