Indian Commercial Vehicle Industry

This publication has been discontinued on September 30, 2011.

Introduction

The commercial vehicle (CV) industry faced challenging times in 2008-09 - reduction in cargo and passenger traffic, lower freight rates, difficulty in availability of vehicle finance, stricter appraisal norms for financing - all on the back of the global financial crisis.

The domestic CV sales dropped by 21.7 per cent over the previous year. The Goods Carrier (GC) segment witnessed a decline of 24 per cent, while Passenger Carrier (PC) segment witnessed sales drop by 7.1 per cent over the same period previous year. The exports too declined by 27.7 per cent in 2008-09.

The profitability of the manufacturers came under pressure in 2008-09 - in the first half due to high input prices and in the second half due to huge reduction in sales volumes. The operating profit margin declined to 5.7 per cent from 9.2 per cent in 2007-08.

The stimulus packages announced by the government like a) excise duty cut from 14 per cent before December 2008 to 8 per cent (now rolled back to 10 per cent) b) implementation of the fleet modernisation program of the State Road Transport Undertakings [SRTU] under the Jawaharlal Nehru Nation Urban Renewal Mission (JNNURM) and c) accelerated depreciation at the rate of 50 per cent of the annual allowance for vehicles purchased between September 30, 2008 and September 30, 2009 ensured a revival in the sector in 2009-10.

Although the exports for the industry still have not come out of the woods, the domestic sales managed to revive, with recovery being more pronounced post September 2009 with growth rate for CV sales for the period September - December 2009 standing at 92.6 per cent y-o-y as compared to 19.1 per cent for April - December 2009. The sector was also helped by reduction in commodity prices during the first half of FY10. The prices of both steel and rubber reduced by around 20 per cent, translating into improved margins of the CV industry.

Various launches were made during April - December 2009 owing to the revival in the CV demand. In Light Commercial Vehilce (LCV) GC segment, Tata Motors launched ‘Super Ace' and ‘Ace EX'

under <=3.5 tonnes sub-segment. In Medium and Heavy Commercial Vehicles (MHCV) GC segment it launched a new range of premium ‘World Truck' in the 10 to 75 tonnes. Ashok Leyland launched its 31 tonner Multi Axle Vehicle ‘3116' . Mahindra and Mahindra launched the 0.5-tonne

Gio' in competition to Tata Motors sub-one tonne ‘Ace' . The company also launched Maxi truck CNG and a mini truck ‘Maximmo' during the said period. Thus, the competition level is rising in the CV industry. CARE Research has developed a detailed statistical model that attempts to forecast the domestic commercial vehicle sales separately for goods and passenger use on the basis of interaction with the industry and analytical acumen. The GC segment sales are forecasted on the basis of GDP growth and thereby the growth in cargo, the existing fleet capacity and its utilisation rate, while the PC segment sales are forecasted on the basis of growth in population, the per capita travel depending on the income levels and the split of travel between public and private modes of transport. Other qualitative factors like macro-economic outlook, government actions, consumer confidence, willingness of vehicle financers to finance purchases, actions of OEMs like launches, aggressiveness, sales push techniques, dealer network, etc. have also been quantitatively built in demand forecasting model.

EXECUTIVE SUMMARY

I. OUTLOOK SECTION

• Outlook on Domestic Market and Exports
• CARE Research' s Demand Forecasting Model
• Outlook on Profitability

II. INDUSTRY SECTION

1. INDUSTRY CHARACTERISTICS

• Classification of automobile industry
• Classification of CV industry
• Herfindal- Hirschman Index
• Major Clusters
• Porter' s seven force analysis
• Government Regulations - Emission norms, Customs Duty, Excise Duty VAT / Sales Tax, FDI, Research & Development
• Technical parameters - Engine Power, Loading platform, turning circle diameter

2. DOMESTIC MARKET

• Trend in Goods Carrier Sales
• Trend in Passenger Carrier Sales
• Player-wise performance - Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors, Swaraj Mazda

3. IMPORTS

• Segments
• Key origin countries

4. EXPORTS

• Key Markets
• Trend in Goods Carrier Sales
• Trend in Passenger Carrier Sales
• Player-wise performance

5. COST STRUCTURE

• Raw materials costs - Steel, Plastic, Rubber
• Research and Development costs
• Selling and Marketing costs
• Employee costs
• Depreciation costs

6. PROFITABILITY AND CREDIT PROFILE

• Operating margins
• Net profit margins
• Return on Capital Employed (RoCE)
• Debt equity
• Interest Coverage
• Net Cash Accruals to Debt

7. GLOBAL SCENARIO

• Introduction
• Global Trade
• Key Players profile

III. COMPANY SECTION

• Tata Motors
• Ashok Leyland
• Mahindra and Mahindra
• Eicher Motors
• Force Motors
• Swaraj Mazda

IV. ANNEXURES

• Sales Volumes by segment and sub-segments for last five years: Domestic and Exports
• Player-wise Domestic Sales Volumes by segment and sub-segments for last five years
• Player-wise Export Volumes by segment and sub-segments for last five years
• Global Manufacturer-wise Production Volume for last five years

• OUTLOOK ON DOMESTIC MARKET
• Trend in cargo movement [BTKM]
• Trend in passenger movement [BPKM]
• Share of Road Rail in Cargo Traffic [BTKM
• Share of Road Rail in Passenger Traffic [BPKM]
• Vehicular freight movement
• Goods carrier tonnage based domestic sales mix [based on rated payload]
• Domestic Three-wheeler GC and <3.5 tonnes LCV GC sales comparison [Volume]
• Three-wheeler GC and <3.5 tonnes LCV GC sales mix [Apr-Dec 09]
• Share of Domestic sales of MAV to HCV [In tonnage]
• Key Models in the >16.2 tonnes MAV segment [current and expected]
• Domestic Three-wheeler PC and LCV PC sales comparison [Volume]
• INDUSTRY CHARACTERISTICS
• Automobile industry classification
• Commercial vehicle sub-segments
• Category-wise vehicle usage
• Analysis of HHI in CV industry
• Total CV Sales Break-up [Volume]
• Total CV Sales- Player-wise market share [Volume]
• CV manufacturing locations
• Porter' s seven force analysis
• DOMESTIC MARKET
• Domestic CV Industry Sales [Volume]
• Domestic GC Sales [Volume]
• Domestic GC Break-up [Volume]
• Domestic sales volumes as share of total sales Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors, Swaraj Mazda
• IMPORTS
• CV Imports Trend (GC and PV)
• CV Imports - Country of origin (by value): 2008-09 and 2003-04
• EXPORTS
• Trend in India' s exports - CV, GC, PC
• Export volumes as share of total sales - Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors, Swaraj Mazda
• COST STRUCTURE
• Domestic Steel Prices
• Steel Prices in China
• Natural Rubber Price Trend
• GLOBAL SCENARIO
• Major Producers, exporters and importers
• Regional production mix of the top CV manufacturers (2008)
• PLAYER PROFILES
• Tata Motors - Domestic Sales Segmental Breakup (2009)
• Ashok Leyland- Domestic Sales Segmental Breakup (2009)
• Mahindra and Mahindra - Domestic Sales Segmental Breakup (2009)
• Eicher Motors - Domestic Sales Segmental Breakup (2009)
• Force Motors - Domestic Sales Segmental Breakup (2009)
• Swaraj Mazda - Domestic Sales Segmental Breakup (2009)

• EXECUTIVE SUMMARY
• Total CV - Forecast
• Domestic CV - Forecasts
• CV Exports - Forecast
• Outlook on profitability
• OUTLOOK ON DOMESTIC MARKET
• Total CV - Forecast
• Domestic CV sales forecasts
• Key Models in the >3.5 tonnes GC segment [current and expected]
• Fuel cost of an HCV v/s MAV
• Key Models in the >16.2 tonnes MAV segment [current and expected]
• State-wise orders for the buses under JNNURM [status till December 2009]
• Recent and ongoing capacity expansions in CV Industry
• OUTLOOK ON EXPORTS
• CV Exports - Forecast
• CV Exports - Key players [April- December] [Volume]
• OUTLOOK ON PROFITABILITY
• Aggregate - Half-yearly financials
• Outlook on profitability
• INDUSTRY CHARACTERISTICS
• Emission norms
• Basic excise duty and customs duty
• NATRIP Centres
• DOMESTIC MARKET
• Domestic Market performance [Volume] - Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors, Swaraj Mazda
• EXPORTS
• CV, GC and PC exports from India in FY 2009
• GC and PC Exports Break-up
• GC Exports - Destination-wise market share FY 2009
• PC Exports - Destination-wise market share FY 2009
• Snapshot of player performance in export market - Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors, Swaraj Mazda
• COST STRUCTURE
• Raw material cost share
• Research and development costs share
• Selling and Distribution costs share
• Employee costs share
• Depreciation cost share
• Aggregate cost structure
• PROFITABILITY AND CREDIT PROFILE
• 5 year trend in OPM, NPM, RoCE, Debt Equity, Interest coverage, Net cash accruals to debt
• GLOBAL SCENARIO
• Global top CV, LCv, HCV and Buses manufacturers
• General Motors Company
• CV - Region wise production and Indian operations
• Ford Motors Company
• CV - Region wise production and Indian operations
• Toyota Motor Corporation
• CV - Region wise production and Indian operations
• Chrysler Group LLC
• CV - Region wise production and Indian operations
• Daimler AG
• CV - Region wise production and Indian operations
• Fiat SPA
• CV - Region wise production and Indian operations
• Nissan Motor Company
• CV - Region wise production and Indian operations
• ISUZU Motors
• CV - Region wise production and Indian operations
• PSA - Peugeot Citroen SA
• CV - Region wise production and Indian operations
• Renault SA
• CV - Region wise production and Indian operations
• PLAYER PROFILE - TATA MOTORS
• Tata Motors - Snapshot of key data and product portfolio
• PLAYER PROFILE - ASHOK LEYLAND
• Ashok Leyland - Snapshot of key data and product portfolio
• PLAYER PROFILE - MAHINDRA AND MAHINDRA
• M&M - Snapshot of key data and product portfolio
• PLAYER PROFILE - EICHER MOTORS
• Eicher Motors - Snapshot of key data and product portfolio
• PLAYER PROFILE - FORCE MOTORS
• Force Motors - Snapshot of key data and product portfolio
• PLAYER PROFILE - SWARAJ MAZDA
• Swaraj Mazda - Snapshot of key data and product portfolio
• LIST OF BOXES
• DOMESTIC OUTLOOK
• Trend in total cargo and passenger movement
• Share of Road vs Rail in cargo and passenger movement
• ‘Hub-and-spoke’ model
• Shift in sales from 3-wheelers to <= 3.5 tonne LCV GC
• JNNURM
• INTRODUCTION
• Evolution of the industry

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