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Indian Passenger Vehicles

Notice
This publication has been discontinued on April 10, 2014.

The Passenger Vehicle (PV) Industry is a key sector of the Indian economy. India is the 3rd largest passenger car market in Asia. Current concerns over slowdown in economy is suppressing jobs creation in the country and thereby straining purchasing power. Moreover, factors like high inflation, increasing fuel prices coupled with firm interest rates have considerably raised ownership cost of the vehicles in past couple of years. However, one of the lowest penetration levels among the key developed and developing countries still presents healthy growth opportunity for the industry in India in medium to long term.

The report gives valuable insights of the PV industry and outlook for the next 5 years. It also includes estimation of investments coming up in next couple of years. The report also focuses on key segments in the PV industry and the launches in the respective segments over the years. Regulatory issues and trend in various duties imposed by the Government and detailed cost analysis and credit profile of the key players in the industry also form part of this report.

The report presents CARE Research's forecasts of domestic market as well as exports for next five years till FY17. CARE Research has developed a robust model for forecasting domestic sales. It takes into account the cost of owning a passenger car, age demographics and income distribution of the populace. The report also gives insights on the outlook on profitability for next 2 years period after considering expected movement in important cost components like raw materials and selling and distribution expenses.

The company section in the report provides detailed profiles of top 4 players in the industry which constitute more than 70 per cent of the market including their financial and operational data.

The report is indispensable for any company in automobile industry, banks/ FIs, policy makers, research & academic organizations, other international

Table of Contents

SECTION - I: CARE Research's OUTLOOK

Outlook on Domestic Market

  • Demand to remain under pressure in FY14; strong fundamentals to drive growth in medium to long term
    • High ownership cost coupled with declining per capita income hurting PV sales
    • Economic uncertainties to fade away and growth to revive at a healthy level in medium to long-term period...
    • Strong fundamentals like growing young population, low penetration indicate a healthy future for PV industry, however economic revival holds the key for recovery
  • Demand Forecasting Methodology
  • Small car segment to continue to witness slide in FY14 as well...
  • ...Mid-size segment is expected to manage a modest growth levels
  • A4-A6 segment would continue to remain niche segment
  • UV would continue to remain growth engine for PV in near term
  • Inadequate public transport infrastructure to fuel growth in MPV segment
  • Rising differential in cost of ownership between petrol and diesel cars, fuelled the demand for diesel cars post FY10
  • Partial de-regulation of diesel prices to erode the benefits enjoyed by diesel cars in near term
  • Investments in diesel powertrains to face concerns over drop in demand
  • Investments of around $9 billion expected in the next 3-4 years, most of it would be earmarked towards new product development and R&D.
  • Asian markets to fuel the growth in short term as demand drops in the European markets.

Outlook on Profitability

  • Modest rise in realisation to keep revenue growth afloat in FY14
  • Realisation growth to remain moderate in FY14, strained by launches of cheaper variants and drop in prices to arrest volume decline
  • Domestic steel prices to remain firm on the back of sharp rupee depreciation
  • Similar to steel, aluminium prices too expected to remain firm on the back of sharp rupee depreciation
  • Natural rubber prices to remain firm in the near term
  • EBITDA margins to remain under strain on the back of rise in selling and distribution costs
  • Rupee depreciation - A growing concern for industry profitability

SECTION - II: INDUSTRY SECTION

Industry Segments and Competition

  • Visible decline in market share of all car manufacturers
  • Small cars loosing traction in the PV market
  • Mere upgrades in present variants stagnates mid-size market but affordable super compact enjoys increased market share.
  • A4-A6 segment: Brands are getting dearer
  • New launches throttles up the UV segment
  • MPV tuned up to the commercial use.

Regulations

  • Motor Vehicle Act
  • Emission Norms
  • Fiscal Regulations
    • Import Duty
    • Excise Duty
    • VAT/Sales tax
  • Foreign Direct Investment

Domestic Market

  • Macro woes continue to hurt PV volumes in FY13
  • Discounts and freebies fails to lure the prospective buyers
  • Voluminous passenger car segment witnesses a de growth for the first time in 12 years
    • Small car segment remains worst hit by economic uncertainties
    • Midsize segment witness healthy growth in FY13
    • A4-A6 segment continues to decline
  • Utility Vehicle segment sales - Saviour for the PV industry
  • Multipurpose Vans demand remains muted in FY13
  • Demand Drivers
    • Economic factors
    • Industry factors
    • Demographic

Trade Scenario

  • PV exports improved in FY13
  • Focus is shifting to European markets from African markets...
  • Hyundai and Maruti Suzuki continue to remain the leading PV exporters

Cost Analysis

  • Raw Material Cost
    • Steel
    • Plastics
    • Rubber
    • Aluminum
  • Employee Cost
  • Royalty and R&D cost
  • Selling and Distribution cost

Credit Profile

  • Operating Margins
  • Net Margins
  • Return on Capital Employed
  • Fixed Asset Turnover Ratio
  • Debt-Equity
  • Interest Coverage
  • Working Capital Management

SECTION - III: COMPANY SECTION

Maruti Suzuki India Limited

Hyundai Motor India Limited

Tata Motors Limited

Mahindra and Mahindra Limited

SECTION - IV: ANNEXURE

  • Segment wise domestic sales and exports of the PV Industry
  • Segment wise player wise domestic sales in PC Industry
  • Segment wise player wise domestic sales in UV and MPV Industry
  • Segment wise player wise exports in PC Industry
  • Segment wise player wise exports in UV and MPV Industry

List of Graphs and Tables

SECTION - I: CARE Research's OUTLOOK

Outlook on Domestic Market

  • Outlook on domestic PV industry
  • Age composition as percentage of the total population
  • Median age comparison
  • Global PV penetration
  • Sales trend
  • Segment wise domestic sales
  • Outlook of domestic UV industry
  • Outlook of domestic MPV industry
  • Trend in fuel prices
  • Running cost per km
  • Outlook capacity and utilization levels
  • Segment-wise PV exports

Outlook on Profitability

  • Outlook on domestic PV industry
  • Outlook on segment wise share in PV industry
  • Discounts offered by OEMs (Mumbai)
  • Outlook on domestic CR coil prices (Rs/tonne)
  • Outlook on domestic aluminium prices (Rs/tonne)
  • Outlook on domestic natural rubber prices
  • Indigenisation levels across key players

SECTION - II: INDUSTRY SECTION

Industry Segment and Competition

  • PV Segmental Overview
  • Production statistics for CY12
  • Industry structure of PV industry
  • Segment wise market share for PC industry
  • Segment wise market share for UV and MPV industry

Regulations

  • Regulatory Framework
  • Change in technology for meeting various emission norms
  • Import duty structure
  • Excise duty structure
  • Budgetary outlays for NATRIP
  • Commissioning Schedule for NATRIP facilities

Domestic Market

  • Trend in domestic PV industry
  • Trend in production levels
  • Trend in domestic PC industry
  • Price Comparison across models in small and mid size segment in FY13
  • Segment wise domestic sales in PC market
  • Trend in domestic UV industry
  • Trend in domestic MPV industry
  • Demand Drivers
  • Trend in per capita income
  • Trend in repo rate
  • Key model launches over last 3 years
  • Trend of urbanisation in India

Trade Scenario

  • Trend in PV exports
  • Trend in breakup of PV exports
  • Export share as on FY12
  • Export share as on FY13
  • Market share of key players as on FY13

Cost Analysis

  • Raw materials cost as a percentage to net sales (%)
  • Annual and monthly trend in steel prices
  • Annual and monthly trend in rubber prices
  • Annual and monthly trend in aluminum prices
  • Employee cost as a percentage to net sales (%)
  • Royalty and R&D cost as a percentage to net sales (%)
  • Selling and Distribution cost as a percentage to net sales (%)

Credit Profile

  • Trend in operating margins (%)
  • Trend in net margins (%)
  • Trend in Return on Capital Employed (%)
  • Trend in Fixed Asset turnover
  • Trend in Debt-Equity
  • Trend in Interest coverage ratio
  • Trend in net working capital cycle (days)
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