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AUTOMOBILE SECTOR
y The automotive sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. y It contributes about 4 per cent in India's Gross Domestic Product (GDP) and 5 per cent in India's industrial production. y This sector has generated about 4.5 lakh of direct employment and about one crore of indirect employment.
y India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. y India has a well developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. y India enjoys natural advantage and is among the lowest cost producers of steel in the world.
Auto sector
y Despite economic slowdown that has affected the automobile industry, production and exports of the sector went up last fiscal, said the Economic Survey 2008-09, and underlined that the industry employs over one crore people. y While the overall automobile production went up by 3 per cent to reach 1.11-crore, exports increased by over 23 per cent to over 15-lakh. The domestic turnover of the sector stood at Rs. 2.19-lakh crore, while exports totalled at Rs. 31,782 crore, taking the total size of the industry to Rs. 2.50-lakh crore during 2008-09.
AUTOMOBILE
2 WHEELER
3 WHEELER
PASSENGER VEHICLE
COMMERCIAL VEHICLE
I.C.V.
M.C.V.
H.C.V.
MOTORCYCLE
SCOOTERS
SCOOTERETTES
MOPEDS
2007-08
2008-09
Installed capacity
Year 2009-10 Year 2010-11
65,29,829 76,08,697
84,19,792 1,05,12,903
Market Share
16.25
4.36 3.39
Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers
Figures in %
76
Domestic sales
Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total 2004-05 10,61,572 3,18,430 3,07,862 62,09,765 78,97,629 2005-06 11,43,076 3,51,041 3,59,920 70,52,391 89,06,428 2006-07 13,79,979 4,67,765 4,03,910 78,72,334 1,01,23,988 2007-08 15,49,882 4,90,494 3,64,781 72,49,278 96,54,435 2008-09 15,52,703 3,84,194 3,49,727 74,37,619 2009-10 19,51,333 5,32,721 4,40,392 93,70,951 2010-11 25,20,421 6,76,408 5,26,022 1,17,90,305 1,55,13,156
97,24,243 1,22,95,397
Export trend
Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total 2004-05 1,66,402 29,940 66,795 3,66,407 6,29,544 2005-06 1,75,572 40,600 76,881 5,13,169 2006-07 1,98,452 49,537 1,43,896 6,19,644 2007-08 2,18,401 58,994 1,41,225 2008-09 3,35,729 42,625 1,48,066 2009-10 4,46,145 45,009 1,73,214 2010-11 4,53,479 76,297 2,69,967
Forcast 2011-12
Market Share
Others, 5.8% Yamaha, 3.8% TVS Motors, 17.7% Hero Honda, 39.8% Bajaj Auto, 24.4%
Hyundai, 19.17 Others, 5.73
2 wheelers market
4 wheelers market
7% 32%
8% 5% 4%
10% 3%
3% 6% 3%
1%
<1%
<1% 1% -
<1% -
60%
68%
24%
2%
1%
3%
3%
40%
23%
40%
12%
13%
7%
6%
SWOT Analysis
Strengths
Automobile industry is an established and an evergreen industry. India is the strongest player in the small car segment of the global automobile market Indian companies are the best cost innovators
Some of the greatest developments in the automotive supply chain lie in the development of Just-In-Time (JIT) inventory methods. Through the use of advanced technologies, assembly line manufacturing, and JIT inventory management, the automotive industry has been able to achieve significant gains in productivity.
Weakness
Indian is lacking in proper infrastructure. This is slowing the pace of growth of auto industry Companies are not improving after sale services
Oppurtunity
y The automotive ecosystem is in the midst of significant change, with increasing challenges in consumer demands, technology development, and globalization. y While demand for incumbent technologies will remain strong, alternative power trains could capture more than 20 percent of the global market by 2020, depending upon boundary conditions such as fuel taxation and emissions regulation set by governments as well as oil price development. y storage is in the heart of the next generation of efforts for fuel economy. y More realistic scenario will emerge for technologies using Hydrogen as automotive fuel. y Intelligent use of NCES (Non conventional energy sources) for powering Public Transport.
Threats
y y y y Global Crisis Companies not focusing on R & D are under great risk High competition from foreign players Lack of technology for Indian companies
Demand Drivers
Inadequate public transportation system, especially in the semi-urban and rural areas Increased availability of cheap consumer financing in the past 3-4 years; Increasing availability of fuel-efficient and low-maintenance models; Increasing urbanization, which creates a need for personal transportation; Changes in the demographic profile; Difference between two-wheeler and passenger car prices, which makes two-wheelers the entry level vehicle; Steady increase in per capita income over the past five years; and Increasing number of models with different features to satisfy diverse consumer needs.
Key Trends
Eclipse of scooter segment
Low interest rates translating to low financing and acquisition costs hence greater affordability. Inadequate urban & rural public transportation infrastructure Ease of use in congested city centres
Executive Performance
Porters Model
Threat of New Entrants; Unfavorable Competitive Rivalry ; Unfavorable Power of Buyers; Favorable Power of Suppliers; Favorable Threat of Substitute Products; Unfavorable
Economic Factors
1 year
Increased access to credit and lower interest loans
1-5 year
Investment in Infrastructure spending can boost the commercial vehicles segment.
5-10 years
Growing working population (441 million people in 2015/16) Upward migration of household income levels (600 million people have annual income of more than $10,200) Middle class expanding by 30 - 40 million every year
Developing India as a Testing hub: National Automotive Testing and R&D Infrastructure Project
Investment of INR 17.18 Billion (about USD 380 million) in setting up, inter alia, independent automotive testing centers within the three automotive hubs in the country Setting up of comprehensive Testing and Validation facilities including Field Tracks for Agricultural Tractors, Trailers, Construction Equipments and various other off-road vehicles at Rae Bareilly in Northern India
Collaborations and Foreign Tie ups for research and technology transfer Developing engines for bio-fuels, electric or hybrid vehicles
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