Automobile

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The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.

Industry Definition
This class consists of units mainly engaged in manufacturing motor vehicles or motor vehicle engines. Products and Services

The primary activities of this industry are: Motor cars manufacturing Motor vehicle engine manufacturing The major products and services in this industry are: Passenger motor vehicle manufacturing segment (Passenger Cars, Utility Vehicles & Multi Purpose Vehicles) Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles) Two Wheelers Three Wheelers.

Supply Chain of Automobile Industry
The description and the role of each of the contributors to the supply chain are discussed below. Third Tier Suppliers: These companies provide basic products like rubber, glass, steel, plastic and aluminium to the second tier suppliers.

Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. They work on designs provided by the first tier suppliers or OEMs. They also provide engineering resources for detailed designs. Some of their services may include welding, fabrication, shearing, bending etc. First Tier Suppliers: These companies provide major systems directly to assemblers. These companies have global coverage, in order to follow their customers to various locations around the world. They design and innovate in order to provide “black-box” solutions for the requirements of their customers. Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers.

Automobile Production
Type of Vehicle Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers 20052006 20062007 20072008 20082009 20092010

1,209,876 1,309,300 1,545,223 1,777,583 1,838,697

353,703

391,083

519,982

549,006

417,126

374,445

434,423

556,126

500,660

501,030

6,529,829 7,608,697 8,466,666 8,026,681 8,418,626

Total

8,467,853 9,743,503 11,087,997 10,853,930

11,175,479

Automobile Sales
Type of Vehicle Passenger Vehicles Commercial Vehicles Three Wheelers 20042005 20052006 20062007 20072008 20082009

1,061,572 1,143,076 1,379,979

1,549,882 1,551,880

318,430

351,041

467,765

490,494

384,122

307,862

359,920

403,910

364,781

349,719

Two Wheelers 6,209,765 7,052,391 7,872,334

7,249,278 7,437,670 9,723,391

Total

7,897,629 8,906,428 10,123,988 9,654,435

Product and service segmentation
Segment Passenger Car] (%) 200304 10.22 200405 10.39 2.23 200506 9.91 2.18 200607 10.65 2.18 200708 12.42 2.39

Utility Vehicles (UVs) (%) 2.15 Multi Purpose Vehicles (MPVs) (%) Total Passenger Vehicles (%) Passenger Carriers (%) Goods Carriers (%)

0.87

0.82

0.75

0.82

0.98

13.25

13.44

12.83

13.65

15.79

0.36 2.01

0.32 2.19

0.32 2.01

0.28 2.44

0.43 2.10

Total Medium & Heavy 2.37 Commercial Vehicles](%) Passenger Carriers (%) 0.28

2.51

2.33

2.73

2.53

0.25

0.25

0.24

0.32

Segment

200304 1.17

200405 1.27

200506 1.36

200607 1.67

200708 1.77

Goods Carriers (%) Total Light Commercial Vehicles (%) Total Commercial Vehicles (%) Passenger Carriers (%) Goods Carriers (%)

1.45

1.52

1.61

1.90

2.10

3.82

4.03

3.94

4.63

4.63

2.56 1.61

2.17 1.73 3.90 11.68

2.39 1.65 4.04 10.21

2.34 1.65 4.00 9.31

2.51 1.51 4.01 11.57

Total Three Wheelers (%) 4.17 Scoters/Scooterettee (%) 13.01 Motorcycles/StepThroughs (%) Mopeds (%) Electric Two Wheelers (%)

61.24

62.86

65.24

64.83

59.35

4.52

4.08

3.74

3.52

4.47

-

-

-

0.07

0.19

Segment

200304 78.76

200405 78.63

200506 79.18

200607 77.73

200708 75.57 100.00

Total Two Wheelers (%)

Grand Total (%)

100.00

100.00

100.00

100.00

Market size
The Indian Automotive Industry after delicensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD 35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion. The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. India’s current GDP is about $ 1.4

trillion and is expected to grow to $ 3.75 trillion by 2020. The projected size in 2016 of the Indian automotive industry varies between $ 122 billion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India’s GDP by 2016, which is more than double the current contribution.

Key Competitors
Tata Motors Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 16.45%
Tata Motors Limited is India’s largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. It is the leader in commercial vehicles and among the top three in passenger vehicles.

Tata Motors has winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer with over 24,000 employees. Since first rolled out in 1954, Tata Motors as has produced and sold over 4 million vehicles in India. Tata Motors is the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two British brands which was acquired in 2008. In 2004, it acquired

the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully built buses and coaches for India and select

international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint by franchises and joint ventures assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa. With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad

in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed minitruck. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, a development which signifies a first for the global automobile industry. Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at USD 2,200 or Rs.100,000 (excluding VAT and

transportation cost). The Tata Nano has been subsequently launched as planned, in India in March 2009.

Maruti Suzuki India
Market Share: Passenger Vehicles 46.07%
Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti-800 and Alto, to stylish hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. Since inception in 1983, Maruti Suzuki India has produced and sold over 10

million vehicles in India and exported over 500,000 units to Europe and other countries. The company’s revenue for the fiscal 2010-2011 stood over Rs 375,224 million and Profits After Tax at over Rs. 22,886 million.

Hyundai Motor India
Market Share: Passenger Vehicles 14.15%
Hyundai Motor India Limited is a wholly owned subsidiary of world’s fifth largest automobile company, Hyundai Motor Company, South Korea, and is the largest passenger car exporter. Hyundai Motor presently markets 49 variants of passenger cars across segments. These includes the Santro in the B segment, the i10, the premium hatchback i20 in the B+ segment,

the Accent and the Verna in the C segment, the Sonata Transform in the E segment. Hyundai Motor, continuing its tradition of being the fastest growing passenger car manufacturer, registered total sales of 559,880 vehicles in the year 2009, an increase of 14.4% over 2008. In the domestic market it clocked a growth of 18.1% as compared to 2008 with 289,863 units, while overseas sales grew by 10.7%, with export of 270,017 units. Hyundai Motor currently exports cars to more than 110 countries across European Union, Africa, Middle East, Latin America and Asia. It has been the number one exporter of passenger car of the country for the sixth year in a row. In a little over a decade since Hyundai has been present in India, it has become the leading exporter of passenger cars with a market share of 66% of the total exports of

passenger cars from India, making it a significant contributor to the Indian automobile industry. In 2009, in spite of a global slowdown, Hyundai Motor India’s exports grew by 10.7%.[18] In 2010 Hyundai plans to add 10 new markets with Australia being the latest entrant to the list. The first shipment to Australia is of 500 units of the i20 and the total i20 exports to Australia are expected to be in the region of 15,000 per annum.

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