Automobile

 Industry  Market

Value Chain & Structure

Size & Growth

 Industry

Segment

 Competition  Growth  Issues

Drivers

& Concern



Industry Overview



Industry Value Chain



Industry Structure



Industry Components



AUTOMOBILE CONTRIBUTION TO GDP IS AROUND 4.2% .



SIZE OF THE INDUSTRY EXPECTED TO TOUCH $155.12 BN BY 2015.



AUTOMOBILE INDUSTRY HAS GROWN TO 11.12 MN UNITS AT CAGR OF 15.5%.



IT PROVIDE D EMPLOYMENT OF AROUND 1.31 CRORE IN 2007.



INCREASE IN CONSUMER SPENDING

Value Chain Bharat Forge

Steel

Apollo

Tier I

Asahi India

Oil Compani es

MRF

Automobile Compone nts

Tier II

Bank s

OEM

Alloys

Dealer Spare Parts

Exports

Paint Companie s

Customer Second Hand Service

Body Builders, Chasis

Exports

AUTOMOBILES

2 WHEELER S

3 WHEELER S

SCOOTE R

PASSENG ER VEHICLES

PASSENGE R

MOPED

FARM EQUIPMEN TS SUV

UTILITY VEHICLE

MCV

MOTOR CYCLE > 100CC < 100CC

LCV

MPV

PASSENGE R CAR

GOODS

COMMERCIA LS VEHICLES

HCV 350C C 125C C

A 1

A2

A 3

A4

A5

A6

Source: acmainfo.com

MARKET SEGMENTATION

Source: SIAM

Rising interest rates leads to slowdown in sales

Source: SIAM, other companies websites

Source: SIAM, other companies websites

Source: SIAM

Source: ACMA

Source: Source: SIAM, SIAM other companies websites

It measures Industry concentration. It is arrived as under: HI= ∑ (Market Share of Each Player)² Segment

Value

Comments

2929 Major competition in this sector due to Value of Herfindahl Index many players

Two Wheelers

Three Wheelers

3533

Passenger Vehicles Commercial

2750

Vehicle

3890

Competition is there between Bajaj and Piaggio Competition on the basis of price Tata is dominating over others having market share of 57.33%

THREAT OF NEW ENTRANTS – HIGH AND MODERATE High susceptibility to technology changes High level of working capital Cost differentiation

SUPPLIER POWER – LOW AND MODERATE Quality method used JIT method being used

POWER OF BUYERS - MODERATE Buyer’s choice to shift to other competitors Can go for backward integration

TREAT OF SUBSTITUTE - MODERATE Railways for commercial and passengers use Airlines for passengers COMPETITIVE STRATEGY – HIGH COMPETITION Too many firms Brand identity Better growth opportunities



M & A riding the Indian automobile sector.



Shift in the strategy, to penetrate into new markets.



Growth in disposable income.



Development of highways & other roads.



State Economic Policies-lower excise duty on small cars, Implementation of VAT



Product Innovations-Like low cost small carNANO



Improving Technology.

Budget Provision

segment

Previous

New

Impact

Reduction In CENVAT

Commercial Vehicles

16%

14%

Manufacturers to absorb raw material price hikes

Excise Duty Cut

Small Cars

16%

12%

Excise duty cut to drive sales volumes

Hybrid Cars

24%

14%

Promote vehicles run on alternate source

Vehicles Carrying More Than 13 Persons

16%

12%

Manufacturers to absorb raw material price hikes

 100%  Equity

FDI permitted. Participation of 51%.

 Automobile

advertisements should promote safe driving.

 EURO-III

& IV norms.

EMISSION NORMS IN FUTURE

* National Capital Region ^ Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad, Pune, Surat, Kanpur and Agra. Source-SIAM

•

Increasing interest rates becoming a concern because most vehicles are bought on loan.

•

Rise inflation leading to decrease in the disposable income.

•

High oil prices cause for decrease in demand.

•

Rising steel prices cause for increase

Thank You