presentation on indian automative industry

1. “ FUTURE OF AUTO COMPONENT INDUSTRY” BY MR. M. RADHAKRISHNAN JT.MANAGING DIRECTOR PRESENTATION ON AUTOLINE INDUSTRIES LTD.

6. PRODUCTION OF FOUR WHEELERS PAST AND FUTURE (IN 000S) Production of Four wheelers Past and Future (In 000s) (In thousands) 0 1000 2000 3000 4000 5000 6000 7000 2003 2004 2005 2009 2014 Year

8. Original Equipment Manufacturers of 4-Wheelers In India & Production During 2005-06 American OEMs Japanese/Joint Venture OEMs 260.00 Hyundai Motor India Ltd 670.10 Total KOREAN OEMS 12.00 Swaraj Mazda Ltd 58.00 Total 41.00 Honda Siel Cars India Ltd 27.00 Ford India Pvt. Ltd 45.00 Toyota Kirloskar Motor Pvt .Ltd 31.00 General Motors India Pvt. Ltd 572.10 Maruti Udyog Ltd Production in 000s Production in 000s

9. Original Equipment Manufacturers of 4-Wheelers In India & Production During 2005-06 Volvo India Pvt. Ltd Tatra Trucks India Ltd 718.00 Total 15.00 Hindustan Motors Ltd 13.40 Total 24.00 Eicher Motors Ltd 0.70 Fiat India Pvt.Ltd 36.00 Force Motors Ltd 0.10 65.00 Ashok Leyland Ltd 1.00 128.00 Mahindra & Mahindra Ltd 1.80 Daimler Chrysler India Pvt. Ltd 450.00 Tata Motors Ltd 9.80 Skoda Auto India Pvt.Ltd Production in 000s INDIAN OEMS Production in 000s EUROPEAN OEMS

10. Original Equipment Manufacturers of 2-Wheelers in India and production during 2005-06 3860 Total 2 Suzuki Motorcycles India Pvt. Ltd 249 Yamaha Motor India Pvt. Ltd 603 Honda Motorcycles & Scooters 3006 Hero Honda Motors Ltd Production in 000s JAPANESE OEMS

11. Original Equipment Manufacturers of 2-Wheelers in India and production during 2005-06 3740 TOTAL 31 Royal Enfield 54 Kinetic Motor Co.Ltd 57 Majestic Auto Ltd 82 Kinetic Engineering Ltd 107 LML Ltd 1367 TVS Motors Co . Ltd 2042 Bajaj Auto Ltd Production in 000s Indian OEMs

13. The table below shows segment-wise distribution of the auto component Industry www.acmainfo.com . 1.Sub normal quality 2.Obsolete technology 3. Low capital availability 4. Restricted growth potential 1. High Investment in plant and machinery 2. Higher overheads 3. Higher rates of taxes and differential regional tax patterns 4. Limited domestic OE volumes Weaknesses 1. Low capital investment 2. Minimal overheads 3. Taxes and levies exemption (violation) 4. Poor regulation on sale of spurious parts 5. Price sensitivity of market 1.Higher production capacities 2. Captive OE market 3. Access to technology through tie ups 4. Quality standards 5. Potential to export 6. Improving quality consciousness of end users Strengths Unorganized Component Manufacturers Organized Component Manufacturers

15. Exports of auto components from India have witnessed a CAGR of 20.3% over the last six years. The value of exports which was US$ 300 million in 1997 had grown to over US$ 2000 million in 2006. GEOGRAPHICAL DISTRIBUTION DETAILS OF AUTO COMPONENT EXPORTS FROM INDIA 100.00 Total 0.40 Others 1.60 Oceania 16.00 Asia 10.00 Africa 10.00 Middle East 26.00 USA 36.00 Europe Percentage share of Total Exports Continent/Country

16. There has also been a qualitative shift in the composition of exports from being predominantly for the aftermarket during the 1990s to the OEM market presently as depicted below: 100 100 Total 25 65 Aftermarket 75 35 OEM 2006 1990 Percentage share in Total Exports Market segment

20. Adopt a global perspective in the operations - Since 1990s, presence of all in virtually every corner of the world. - Especially in Emerging Markets, where all OEMs are fiercely competing for market shares as the market grows. - Leading to simultaneous launch of models in different locations with similar standards. - Replicate Supply Chain structures. Strategies of Global Auto Majors impacting Component Manufacturers:

21. Reorganization of their vehicle portfolio around product platforms and car modules and systems. - Declining sales per vehicle model, short product life cycle – preventing economies of scale in design & manufacturing with adverse impact on cost. - Focusing on common platforms and interchangeable modules – leading to faster & lower cost deployment of new solutions across the whole product range, while tailoring vehicles to a multitude of tastes and preferences of consumers in the world. - Design with a common underbody platform adapting body, trim and ride to particular market conditions.