Indian Automotive Industry at the Crossroads – August 2010
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Amidst the global economic downturn, where the world’s largest automakers had filed for financial bankruptcy or faced tough times, India emerged as the rising star of the east. Its attractive automotive market grew by 12.9 percent in 2009. Though it too had been hit, on the export front primarily, due to the slowdown in the latter part of 2008 and early 2009, immediate and far reaching measures by the government helped the industry bounce back and reach record levels of growth in the subsequent quarters.
The passenger vehicle segment of the Indian automotive market with a 4.3 percent share in global production and fourth in terms of exports by the Organization of International Automotive Manufacturers (OICA) in 2009 was a uniquely attractive and growing market, especially the small car segment that drew manufacturers from world over, heating up competition and triggering price and launch wars. As the economy picked up momentum as often happens with government stimulus packages, it triggered inflation and rising food, fuel and material costs became a concern hitting manufacturers on both the supply side on the one hand and threatening to dampen demand on the other.
In this socio-economic climate amid an economy housing the world’s second largest population which is fast urbanizing, sporting a GDP growth of 6.7 percent in 2008-09 when growth in other economies turned negative and also where a large proportion of the demand stems from the rural sector, this report of Ventures Focus aims to measure the importance of the various macroeconomic and socio-political factors that drive or restrain the market.
It also examines the automotive market overall, its segments and growth patterns and the competitive landscape to provide a competitive overview of the market and its key players. The study also aims to make strategic recommendations for the key players in various segments to improve growth or market shares as is required after an analysis of their comparative positions in the Indian automotive market.
Amidst the global economic downturn, where the world’s largest automakers had filed for financial bankruptcy or faced tough times, India emerged as the rising star of the east. Its attractive automotive market grew by 12.9 percent in 2009. Though it too had been hit, on the export front primarily, due to the slowdown in the latter part of 2008 and early 2009, immediate and far reaching measures by the government helped the industry bounce back and reach record levels of growth in the subsequent quarters.
The passenger vehicle segment of the Indian automotive market with a 4.3 percent share in global production and fourth in terms of exports by the Organization of International Automotive Manufacturers (OICA) in 2009 was a uniquely attractive and growing market, especially the small car segment that drew manufacturers from world over, heating up competition and triggering price and launch wars. As the economy picked up momentum as often happens with government stimulus packages, it triggered inflation and rising food, fuel and material costs became a concern hitting manufacturers on both the supply side on the one hand and threatening to dampen demand on the other.
In this socio-economic climate amid an economy housing the world’s second largest population which is fast urbanizing, sporting a GDP growth of 6.7 percent in 2008-09 when growth in other economies turned negative and also where a large proportion of the demand stems from the rural sector, this report of Ventures Focus aims to measure the importance of the various macroeconomic and socio-political factors that drive or restrain the market.
It also examines the automotive market overall, its segments and growth patterns and the competitive landscape to provide a competitive overview of the market and its key players. The study also aims to make strategic recommendations for the key players in various segments to improve growth or market shares as is required after an analysis of their comparative positions in the Indian automotive market.
CHAPTER 1. EXECUTIVE SUMMARY
CHAPTER 2. THE AUTOMOTIVE INDUSTRY IN 2010- AN OVERVIEW
Introduction and Global Automotive Overview
India and its Automotive Market
PESTLE
Political
Political and Labor Related Unrest
Liberalization and Automotive Policy
Economic
Low Cost Manufacturing Hub
Upward Trend in Population, Urbanization and Working Population and Disposable Incomes
Commodity and Fuel Inflation Dampens Demand and Prices
Sluggish Growth of Infrastructure Projects Completion Dampens Growth of Markets
Growth of Vehicle Financing Enhances Affordability and Spurs Demand
Social
Rural Upliftment Schemes Fuel Demand
Low Cost Small Car Development Hub Enhances Affordability and Boosts Demand
Technological
Greater Investment on R&D and R&D Outsourcing to India to Boost Fuel Efficiency and Cost Competitive Car Production
Legal and Regulatory
Automotive Policy and Stimulus Package Encourages Growth
Environmental
Global Environmental Standards yet to be achieved
Growth Drivers and Restraints: the Indian Automotive Industry
Drivers
Restraints
CHAPTER 3. MARKET OVERVIEW OF THE INDIAN AUTOMOTIVE INDUSTRY
Trends and Status of the Indian Automotive Industry 2010
Industry Growth, Production, Sales and Export Trends
Key Players
CHAPTER 4.COMPETITIVE OVERVIEW OF THE INDIAN AUTOMOTIVE INDUSTRY
Competitive Forces in the Indian Automotive Industry
Supplier Power
Non Unionized Low Cost Labor
Large Base of Component Suppliers
Rivalry
Fierce Competition in Small Car Segment Due to Low Cost Small Car Production Hub
Second hand market rivals and cuts into new car market pie
Buyer Power
Abundant choices increase buyer power
Higher Standards of Living and Disposable Incomes Enhance Spending Power
Substitutes
Competing Low Cost, Fast Growing Eastern Markets
Alternative Surface Transport Systems and Public Transport Systems
Entry Barriers
Concessions for Domestic Players Provides Uneven Playing Field
Growth Versus Market Share- Where Key Players Stand
Passenger Car Market
Maruti
Hyundai Motors India Limited (HMIL)
Tata Motors
General Motors (GM) India private limited
Ford India private limited (FIPL)
Skoda Auto India
Mahindra and Mahindra Limited (M&M)
Two-Wheeler Market
Hero Honda
Bajaj Auto Limited (BAL)
TVS Motors
Honda Motor Cycles and Scooters India (HMSI)
Mahindra and Mahindra enters Two Wheeler Market taking over Kinetic Motors
CHAPTER 5. THE INDIAN COMMERCIAL VEHICLES SEGMENT OVERVIEW
CHAPTER 6. FUTURE OUTLOOK FOR THE INDIAN AUTOMOTIVE INDUSTRY
Ventures Onsite MENA Projects Database
CHAPTER 2. THE AUTOMOTIVE INDUSTRY IN 2010- AN OVERVIEW
Introduction and Global Automotive Overview
India and its Automotive Market
PESTLE
Political
Political and Labor Related Unrest
Liberalization and Automotive Policy
Economic
Low Cost Manufacturing Hub
Upward Trend in Population, Urbanization and Working Population and Disposable Incomes
Commodity and Fuel Inflation Dampens Demand and Prices
Sluggish Growth of Infrastructure Projects Completion Dampens Growth of Markets
Growth of Vehicle Financing Enhances Affordability and Spurs Demand
Social
Rural Upliftment Schemes Fuel Demand
Low Cost Small Car Development Hub Enhances Affordability and Boosts Demand
Technological
Greater Investment on R&D and R&D Outsourcing to India to Boost Fuel Efficiency and Cost Competitive Car Production
Legal and Regulatory
Automotive Policy and Stimulus Package Encourages Growth
Environmental
Global Environmental Standards yet to be achieved
Growth Drivers and Restraints: the Indian Automotive Industry
Drivers
Restraints
CHAPTER 3. MARKET OVERVIEW OF THE INDIAN AUTOMOTIVE INDUSTRY
Trends and Status of the Indian Automotive Industry 2010
Industry Growth, Production, Sales and Export Trends
Key Players
CHAPTER 4.COMPETITIVE OVERVIEW OF THE INDIAN AUTOMOTIVE INDUSTRY
Competitive Forces in the Indian Automotive Industry
Supplier Power
Non Unionized Low Cost Labor
Large Base of Component Suppliers
Rivalry
Fierce Competition in Small Car Segment Due to Low Cost Small Car Production Hub
Second hand market rivals and cuts into new car market pie
Buyer Power
Abundant choices increase buyer power
Higher Standards of Living and Disposable Incomes Enhance Spending Power
Substitutes
Competing Low Cost, Fast Growing Eastern Markets
Alternative Surface Transport Systems and Public Transport Systems
Entry Barriers
Concessions for Domestic Players Provides Uneven Playing Field
Growth Versus Market Share- Where Key Players Stand
Passenger Car Market
Maruti
Hyundai Motors India Limited (HMIL)
Tata Motors
General Motors (GM) India private limited
Ford India private limited (FIPL)
Skoda Auto India
Mahindra and Mahindra Limited (M&M)
Two-Wheeler Market
Hero Honda
Bajaj Auto Limited (BAL)
TVS Motors
Honda Motor Cycles and Scooters India (HMSI)
Mahindra and Mahindra enters Two Wheeler Market taking over Kinetic Motors
CHAPTER 5. THE INDIAN COMMERCIAL VEHICLES SEGMENT OVERVIEW
CHAPTER 6. FUTURE OUTLOOK FOR THE INDIAN AUTOMOTIVE INDUSTRY
Ventures Onsite MENA Projects Database
TABLE OF FIGURES
Figure 1: Shares of Regions in World Automotive Production, 2009
Figure 2: Trend in World Automotive Sales by Region, 2007 - 2010
Figure 3: Share of the Automotive Industry in India's GDP, 2009
Figure 4: Share of Automotive Industry in India’s Exports, 2009
Figure 5: Share of Automotive Industry in India’s Imports, 2009
Figure 6: Per Capita Income and Expenditure (US$), India, 2002-03 to 2008-09
Figure 7: Demographics of Population Growth, 1996-2016
Figure 8: Wholesale Price Index (WPI) (Base 1993-94=100) and the Automotive Industry, 2007-2010
Figure 9: Gross Turnover (in US$ million) for the Indian Automotive Industry, FY2003-FY2009
Figure 10: Market Shares of Segments in the Indian Automotive Manufacturing Segment, 2009-10
Figure 11: Market Shares in the Automotive Components Segment, 2009-10
Figure 12: Indian Automotive Four-wheeler Manufacturing Segment Production, 2003-04 - 2009-10
Figure 13: Indian Automotive Two Wheeler Manufacturing Segment Production, 2003-04 - 2009-10
Figure 14: Indian Automotive Four-Wheeler Manufacturing Segment Sales, 2003-04 - 2009-10
Figure 15: Indian Automotive Two-Wheeler Manufacturing Segment Sales, 2003-04 - 2009-10
Figure 16: India Automotive Manufacturing Segment Exports 2003-04 to 2009-10
Figure 17: Indian Automotive Component Exports and Imports, 2003-04 to 2009-10
Figure 18: India Automotive Manufacturing Passenger Vehicles Market Share, 2009
Figure 19: India Automotive Manufacturing Two Wheelers Market Share, 2009
Figure 20: India Automotive Manufacturing Three Wheeler Market Share, 2009
Figure 21: India Automotive Components Manufacturing Segment Market Share, 2009
Figure 22: Growth-Market Share Analysis for the Key Players in the Indian Passenger Car Market, 2009-10
Figure 23: Growth-Market Share Matrix for the Key Players in the Indian Two Wheeler Market, 2009-10
Figure 24: Market Share Indian M&HCV Goods Segment 2009-10
Figure 25: Market Share Indian M&HCV Passenger Segment 2009-10
Figure 26: Market Share Indian LCV Goods Segment 2009-10
Figure 27: Market Share Indian LCV Passenger Segment 2009-10
Figure 1: Shares of Regions in World Automotive Production, 2009
Figure 2: Trend in World Automotive Sales by Region, 2007 - 2010
Figure 3: Share of the Automotive Industry in India's GDP, 2009
Figure 4: Share of Automotive Industry in India’s Exports, 2009
Figure 5: Share of Automotive Industry in India’s Imports, 2009
Figure 6: Per Capita Income and Expenditure (US$), India, 2002-03 to 2008-09
Figure 7: Demographics of Population Growth, 1996-2016
Figure 8: Wholesale Price Index (WPI) (Base 1993-94=100) and the Automotive Industry, 2007-2010
Figure 9: Gross Turnover (in US$ million) for the Indian Automotive Industry, FY2003-FY2009
Figure 10: Market Shares of Segments in the Indian Automotive Manufacturing Segment, 2009-10
Figure 11: Market Shares in the Automotive Components Segment, 2009-10
Figure 12: Indian Automotive Four-wheeler Manufacturing Segment Production, 2003-04 - 2009-10
Figure 13: Indian Automotive Two Wheeler Manufacturing Segment Production, 2003-04 - 2009-10
Figure 14: Indian Automotive Four-Wheeler Manufacturing Segment Sales, 2003-04 - 2009-10
Figure 15: Indian Automotive Two-Wheeler Manufacturing Segment Sales, 2003-04 - 2009-10
Figure 16: India Automotive Manufacturing Segment Exports 2003-04 to 2009-10
Figure 17: Indian Automotive Component Exports and Imports, 2003-04 to 2009-10
Figure 18: India Automotive Manufacturing Passenger Vehicles Market Share, 2009
Figure 19: India Automotive Manufacturing Two Wheelers Market Share, 2009
Figure 20: India Automotive Manufacturing Three Wheeler Market Share, 2009
Figure 21: India Automotive Components Manufacturing Segment Market Share, 2009
Figure 22: Growth-Market Share Analysis for the Key Players in the Indian Passenger Car Market, 2009-10
Figure 23: Growth-Market Share Matrix for the Key Players in the Indian Two Wheeler Market, 2009-10
Figure 24: Market Share Indian M&HCV Goods Segment 2009-10
Figure 25: Market Share Indian M&HCV Passenger Segment 2009-10
Figure 26: Market Share Indian LCV Goods Segment 2009-10
Figure 27: Market Share Indian LCV Passenger Segment 2009-10
