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Group 11:

Aravindan Hemango Ishan

AM

Sonowal

Rishabh Kansal Kumar

Nikhil Priya Raju

Parmar Gholley

Before 1990s: Low volumes, obsolete tech, no govt. attn. Reforms in 91 tax reliefs, cut in export tariffs Equity regulation and banking reforms Emission norms
Mid 90s Opened up for foreign investments - 96 Ford, GM, Toyota etc competitive landscape Fuel specifications

Auto Policy 2002 For global competence, and increased contribution to GDP Automatic approval for 100% Foreign Investments Huge incentives for R&D Fuelled modernization of Auto Industry in India

Recent trends Fuel subsidy, auto hubs & tax free exports!!

Compliance to Global norms - Harmonization Globalization of Auto Industry GOI to align Indian norms with International regulations

The US and Japan continue to offer a bright spot offering huge markets. Hyundai Motors and Maruti Suzuki are leading exporters (account for 90 percent of sales volume) China , Brazil and Russia offer potential markets to be exploited for bigger market share. European markets showing a negative trend owing to Euro zone crisis.

Source: Proquest

Toyota, Ford, and General Motors have started penetrating the small cars segment recognising the potential in this segment.

Major international players are now developing models specifically to meet Indian consumers preferences and market conditions

The new models have been priced at fairly aggressive price and as new entrants ramp up their volumes small car segment will face more competition.

Many

global players are setting up capacities to locally develop engines and transmissions in India with vendor development in India forming a key part of their strategy

Source: ICRA

Changes in international duty agreements (i.e. FTA between Korea and EU) with competing manufacturing locations remain a significant factor in determining export potential from India.

Russia applies an additional "utilization" duty on various vehicles imported into or manufactured within its territory. Passenger cars, commercial trucks and motor buses are all covered. This can a worrying case for the sector considering Russia is providing promising opportunities for export

Renault forged a partner with M&M to enter the Indian market in 2005 Tata motors acquired Land rover business after which the sales have really increased M&M making Reva electric cars Sudden spurt in demand for used car segment Heavy investment by major companies for diesel engine production

Industry >> Analytical Ratios >> Aggregate Key Fin Ratios Industry - Auto-Cars Aggre- Hind. Maruti Honda gate Motors Suzuki Siel Cars

Hyundai Motor I

Volkswagen Group

Tata Motors

201103 Key Ratios Debt-Equity Ratio 0.38 Long Term Debt- 0.32 Equity Ratio Current Ratio 1.16 Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) ROCE (%) RONW (%)

201103

201103

201103

201103

201103

2.09 2.01 0.63

0.04 0.02 1.13

1.11 0.54 0.84

0.66 0.66 1.5

0.32 0.31 1.22

0.75

0.6
0.51

2.45 16.44 22.76 10.58 9.44 6.16 8.86 15.59 12.91

1.7 9.57 46.43 -2.35 -6.68 -8.77 -10.41 -54.1 -169.11

3.69 31.15 50.01 125.35 10.15 7.67 10.09 23.3 17.81

2.15 7.96 27.76 -2.67 4.46 -1.2 4.01 -3.38 -26.22

2.7 17.01 14.26 27.71 9.36 5.99 9.15 20.97 21.99

47.86 22.76 15.64 22.08 3.44 2.93 3.31 50.7 389.54

2.54 14.99 20.49 2.59 9.65 6.99 6.95 11.07 10.37

Source: Capital line

May,

2009: Exports boost the growth of passenger cars Oct, 2010: International players plan to invest heavily in India September, 2011: Spike in the interest rates, high inflation and lower economic growth August, 2012: Passenger Vehicles: Marutis plant shift

Overview

Steady growth Affected by: Oil prices, Interest costs and Infrastructure

Development Taxes
Reactions

Increase in indirect taxes : Cost Push


Infrastructure development: Medium and Long Term

Direct

Tax Impact Indirect Tax Impact


Increased Service Tax and Excise Duty Widened service tax base
Customs

duty rules amended

Cess Exempted on countervailing duty Custom duty on CBU raised


CENVAT

http://www.barrett.com.au/blogs/SalesBlog/2012/2418/uncategorized/shrinking-

product-lifecycles/

http://www.pwc.com/in/en/assets/pdfs/budget2012/AutomobileSectorSpecificImpactBu dget2012.pdf

www.capitaline.com

http://www.icra.in/Files/ticker/PV-Industry-201103.pdf
http://search.proquest.com/docview/1037122900/fulltextPDF/139304D5C2643BEAE4 D/1?accountid=49670

http://www.siamindia.com/scripts/background.aspx http://www.economywatch.com/indian-automobile-industry/government-policies.html http://dhi.nic.in/autopolicy.aspx