Indian Auto Industry

Economic Diplomacy Division

Ministry of External Affairs
Where does India stand?
Largest TRACTOR manufacturer

Largest TWO WHEELER manufacturer

2nd Largest BUS manufacturer

3rd Largest HEAVY TRUCK manufacturer

6th Largest CAR manufacturer

6th Largest COMMERCIAL VEHICLE manufacturer

Source: SIAM
 Vehicle Market Share
Segment Market Share

Passenger Vehicles 14%

Commercial Vehicles 3%
Three Wheelers 3%
Two Wheelers 80%

Low Vehicle Penetration

Vehicle per 1000
Segment
persons
Passenger Vehicles 20

Two-wheelers 108

Buses 0.11
 Illustrative list of
Auto Clusters
Cities: Delhi, Gurgaon, Noida,
manufacturing facilities of
Ghaziabad, Ludhiana, Haridwar
Indian and Global OEMs
Eicher Mahindra
Escorts Mazda North
Hero Motor New Holland Cities: Kolkata
Honda Motorcycle Suzuki Tata Cummins
Honda Cars Motorcycles Tata Motors
ICML Tata Motors
JCB Yamaha East
Maruti Suzuki

Cities: Baroda, Halol, Sanand,

Mumbai, Pune, Nashik, Aurangabad. West Cities: Chennai, Hosur, Bengaluru
Bajaj Auto Mercedes Benz Ashok Leyland Royal Enfield
Fiat Skoda BMW Same Deutz
Force Motors Tata Hitachi South Caterpillar TAFE
GM Tata Motors Daimler Tata Motors
John Deere Volkswagen
Ford Toyota Kirloskar
Mahindra Volvo Eicher
Suzuki Hyundai TVS
Ford Nissan Volvo Buses
Honda Motorcycle Renault
 Units of vehicles expressed in ’000 units

Passenger Vehicles Production

Figures for financial year – April to March

4,000  CAGR 2013-17: 4% 3,792

3,465
3,500 3,234 3,221
3,087
3,000

2,500

2,000

1,500

1,000

500

0
2012-13 2013-14 2014-15 2015-16 2016-17
 Units of vehicles expressed in ’000 units
Other Vehicles Production Figures for financial year – April to March

Commercial Vehicles Tractors

850 833  CAGR 2013-17: -1%  CAGR 2012-16: -3%
810
800
800 787 697
700 640 613
600
579 572
750
500
699 697
700 400
300
650 200
100
600
0
2012-13 2013-14 2014-15 2015-16 2016-17 2011-12 2012-13 2013-14 2014-15 2015-16
Two & Three Wheelers Construction Vehicles
 CAGR 2013-17: 6% 80  CAGR 2012-16: 3% 76
25000
66.4 68.2
19764 20712 70
60.7
19439 55.9
20000 17713 60
16584
50
15000
40

10000 30

20
5000
10

0 0

2012-13 2013-14 2014-15 2015-16 2016-17 2011-12 2012-13 2013-14 2014-15 2015-16
Top 5 players in Each Segment in 2016-17
Passenger Vehicles : +9.23% Commercial Vehicles : +4.16%

Leading Players Leading Players

Maruti Suzuki (47%) Tata Motors (43%)
Hyundai Motor (17%) Mahindra & Mahindra(25%)
Mahindra (8%) Ashok Leyland (19%)
Tata Motors (6%) VECVs - Eicher (7%)
Honda Cars (5%) Force Motors (3%)

Two Wheelers : +6.89% Three Wheelers : -4.9%

Leading Players Leading Players

Hero MotoCorp (37%) Bajaj Auto (50%)
Honda MSI (27%) Piaggio Vehicles(30%)
TVS Motor (14%) Mahindra (10%)
Bajaj Auto (11%) Atul Auto (7%)
India Yamaha (5%) TVS Motor (2%)
Note: FY means 12 month ending March
Auto Component Industry: 2015-2016
Turnover • USD 39.0 billion

Contribution to GDP • 3.5% - 4%

Foreign Exchange
• USD 10.81 billion
Earnings/ Exports

Share of India’s Exports • 4%

Domestic Aftermarket • USD 6.8 billion

Direct Employment • 1.50 million

 Auto Component Industry Turnover: 2015-16
CAGR: 6%
3000 40%
Turnover in INR’ 00 Crore (USD Billion)

35.9% 2556 (39.0)

2500 2348 (38.5)

Growth Rate in Rupee Terms

2160 (39.7) 2117 (35.1)
30%
2046 (42.2)
2000 1883 (41.3)
20%

1500
11.1%
8.7% 8.8%
10%
1000
5.6%
0%
500
-2.0%

0 -10%

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

9
(Turnover includes supplies to OEMs, aftermarket sales and exports)
 Auto Components Supply to OEMs
Backhoe Loaders
Three-Wheeler
2%
4% Two-wheelers
Others
21%
HCV 2%
10%
Tractors
7%
MCV
5%
LCV
4% Passenger Vehicles
44%
SCV
1%

Small Commercial Vehicles (SCV) Less than 2 T

Light Commercial Vehicle (LCV) 2 to 7.5 T
Maneuver Combat Vehicle (MCV) 7.5 to 16 T
Heavy Commercial Vehicle (HCV) More than 16 T
OEMs consumption includes locally produced Components and Imports
 Exports - Auto Component Industry: 2015-16
800 CAGR: 18% 709 (10.8) 80%
685 (11.2)
615 (10.2)
Turnover in INR’ 00 Crore

600 60.7% 60%

527 (9.7)
(USD Billion)

427 (8.8)
400 40.7% 40%

\
303 (6.7)
23.3%
200 16.7% 20%
11.4%
3.5%
0 0%
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

North South Africa, 6% Exports Destinations: Top 10 Countries in %

America, America,
25% 4% USA 25 Thailand 3.18
Asia, 25%
Germany 6.96 UAE 3.15
Turkey 6.22 France 2.99
Europe, UK 5.43 Brazil 2.62
New 36%
Zealand & Central Italy 3.86 Mexico 2.59
Australia, America,
1% 3% 11
Increased Component Outsourcing (Illustrative List)

Over 35 IPOs of Global OEMs & Tier 1 Procuring from India

OEMs Tier 1 Component Manufacturers

• BMW • Bosch
• Caterpillar • Continental
• Ford • Cummins
• FIAT • DANA
• Delphi
• GM
• Denso
• John Deere • Eaton
• MAN • Getrag
• Mercedes-Benz • GE
• Nissan • Kohler
• Peugeot • Kolbenschmidt
• Renault • Magna
• Toyota • Meritor
• Volkswagen • TRW
• Valeo

Indian Auto components already driving on international roads 12

Strengths & Challenges of Indian Component Suppliers
Indian Suppliers’ Focus – Global Best Practices
Industry fast embracing modern
Focus on Quality shop-floor practices:
 5-S; 7-W
OHSAS… 162  Kaizen
ISO 14001 287  TQM
TS 16949 546  TPM
ISO 9001 651
 6 Sigma
 Lean Manufacturing

Deming Award – Japan Quality Medal – TPM Award – Shingo Silver JIPM –
16 5 15 Medallion - 2 3

Largest no. of Deming Award winning companies outside Japan

 Increasing focus on Innovation and Research
Design & Research Centers of leading Global companies in India

• Bosch • Honeywell
• Caterpillar • Hyundai
• Continental • Magna
• Cummins • Mercedes Benz
• Ford • Renault Nissan
• GM • Suzuki
• Honda • Valeo

(Illustrative List)
Auto Components Industry Aspirations
Objectives of Automotive Mission Plan 2026
Automotive • Achieve top-line of USD 260-300 billion
industry to be the • Increase export intensity to 35 - 40%
engine of “Make in • Attract investments of USD 70 - 90 billion
India” over the next decade

• Provide incremental employment to 65 million

Contribute persons
significantly to • Quality of employment a key feature of this
“Skill India” industry

• Focus on promoting safe, efficient and

Focus on promoting comfortable mobility for every person in
the society, with an eye on environmental
Mobility protection through both public and personal
transport option
 • Foster the promotion of “Brand India” by
Promote India as a developing a sophisticated ecosystem of
preferred research, design, engineering and
manufacturing that is conducive for a
destination for variety of players - both mass market and niche
every segment of seekers.
the automotive • To rank within the top three of the world
value chain in engineering, manufacture and export
of vehicles and components
• India & EU norms from current 6-7 years
• Harmonisation: Clear roadmap to adhere to
Define a Road map 1998 Agreement of UN Global Technical
Regulations (WP.29)
for Implementing
• Fuel Efficiency: Define clear roadmap for all
policies and categories of vehicles
regulations • Road Safety: Reduction in accidents and
fatalities as per norms specified in Road
Transport & Safety Bill.
 Automotive Mission Plan 2026: Aspirations for Vehicle Industry
(million units)

Segment 2004-2005 2016-2017 2025-2026

Passenger Vehicles 1.2 3.7 9.4 - 13.4

Commercial Vehicles 0.39 0.8 2.0 - 3.9

Two Wheelers 7.6 18.5 50.6 - 55.5

Three Wheelers 0.43 0.95 2.8 - 3.0

Tractors 0.25 0.6 1.5 - 1.7

Total 9.87 24.55 66.3 - 77.5

Source: Automotive Mission Plan: 2016-26

19
Tax Structure/Regimes in India
 Current Excise Duty Structure
Vehicle Category Excise Duty

Small cars, Commercial Vehicles and Two/Three 12.5%

wheelers
Length >4m and engine capacity < 1500cc 24%
Length >4m and engine capacity > 1500cc 27%
SUVs/MUVs with Ground clearance >170mm 30%

Hybrid cars 12.5%

Specified components of Hybrid vehicles 6%
Electric cars, 2W & 3W and specified 6%
components
 Basic Customs Duty
Vehicles Completely Built Up Completely Knocked
(CBU) Down (CKD)
Passenger vehicles 100%*/60 10%/30%+
Two wheelers 75%**/60% 10%/30%+
Three wheelers 60% 10%/30%+
Commercial vehicles 20% 10%
Components*** 7.5%-10%
* With CIF value >US $ 40,000 or engine capacity >3000 cc for petrol and >2500 cc for diesel
vehicles, or both.
** For motor cycles with engine capacity of 800 cc or more
+CKD containing engine or gearbox or transmission mechanism in pre-assembled form but not
mounted on a chassis or a body assembly
*** Some components progress down to nil on FTAs
Tax Category Rate
Infra Cess 1%, 2.5%, 4%
R & D Cess 0.125%
National Calamity Contingent Duty 1%
Central Sales Tax (CST) for out of state sale 2%
State Value Added Tax (VAT) 12.5%
Octroi (in one state only) 4%
State Road/Registration Tax 4-20%
Infrastructure Cess:
• 1% on small petrol, LPG, CNG cars,
• 2.5% on small diesel cars of less than 1500 cc and
• 4% on other higher engine capacity vehicles and SUVs was levied
last year.
 Rates Proposed Under GST
Vehicle Category GST Rate
Passenger Vehicles (Petrol, Diesel, CNG)/Commercial 28%
Vehicles/Three-wheelers/Two-wheelers
Electric Vehicles 12%

Vehicles that would attract GST plus Cess. Cess as provided below:

Vehicle Category Cess

>4m passenger vehicles (All) 15%

<4m passenger vehicles (petrol) 1%
<4m passenger vehicles (diesel) 3%
>350cc two-wheelers 1%
10 – 13 seater public transport vehicles 15%
Thank You