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BIRD, The Business & Industrial Research Division of IMRB International, India
) Study Findings
 Environment Analysis
) Annexure
2
Scope of the Study
3
Research Approach (Common slide for all modules)
Secondary/
Database Qualitative
Section Qualitative
Section Stakeholders
Approach
Moderate
Industry Competitors High
High Consumer Power
- 450 – 500 mid to large players with
- Auto OEMs have average 2 or
Supplier Power around 6 to 7 thousand units
more suppliers
- Raw material cost are 50 – 60% of - Unorganized segment : around 10,000
- Replacement market
total production cost units
consumers have options for
- Tier structure supporting vendor - In certain segments, less
branded and cheaper spurious
relationship competition due to lack of technology
parts
and limited players
Low
Threat of Substitutes
- Organized component players working
closely with R&D teams of OEMs
- Unorganized units have greater threats
as the replacement market consumers now
shifting to genuine components
6
Auto Component Market in India comprise of
OEM, replacement and export demand
7
Chennai (South), Delhi NCR (North) and Pune (West) are
major automobile and automotive component hubs in India
8
Two wheelers contribute to 85% of the total
automobile volumes in India
Category 2002-03 2003-04 2004-05 2005-06 2006-07
Passenger Car 609 843 1018 1113 1323
Utility Vehicle 114 146 192 197 222
Commercial Vehicle 204 275 354 391 520
Two-Wheeler 5076 5623 6530 7609 9442
Three-Wheeler 277 356 374 434 556
Grand Total 6280 7244 8468 9744 11065
Growth Rate 18.13% 15.34% 16.90% 15.06% 13.55%
All Number in '000 units while Growth Rate is in percentage
Source: Ministry of Heavy Industries, Government of India
9
Indian Auto Component Market is growing at
CAGR of 27% since 2002 - 03
14,000 12,000
Production CAGR: 27%
12,000
10,000 8,700
6,730 7,200
8,000 5,430 5,400
6,000 3,894 3,965 4,470 4,400
3,278 3,008 3,249 3,750 3,615
3,100
4,000 2,300 2,645 2,469 2,873
760 1,274 1,692
2,000 330 350 456 625 578
*
7
7
00
8
-9
-9
-9
-0
-0
-0
-0
-0
-0
-0
-0
0
98
96
97
00
01
03
02
04
05
06
-2
07
19
19
19
20
20
20
20
20
20
20
99
20
19
31%
19% In Value Terms
7% 12%
9%
10% 12%
Engine parts Drive transmission & steering parts
Body & chassis Suspension & braking parts
Equipment Electrical parts
Others
) In value terms, engine and drive transmission & steering parts form
half of the total market for auto components
11
Motor Vehicle and Engine parts formed major auto
component import basked from ASEAN countries in 2004 - 05
Source: ACMA (Automotive Component Manufacturers Association, DGFT (Directorate General of Foreign Trade)
12
Auto Components in India generally pass from
2 – 3 nodes before reaching the end consumers
) Imports are happening largely because of “pull” factor whereby OEMs and importers
reaching out for cost effective procurement for desired quality products
13
Net Margin for the genuine auto components
ranges from 8 – 10% for the retailers
14
Customs duty on imported auto components
currently vary from 5% to 10%
) However, in certain cases CVD (Countervailing Duty) and Special Additional Duty are levied
that takes the duty cover 30% to 35% of the component landing cost
) 100 per cent FDI inflow under automatic approval for foreign equity investment – both
) Technology import on royalty payment of 5% without any duration limit and lump sum
15
Quality & Price parameters play key role in purchasing
auto components in the replacement market
0 1 2 3 4 5 0 1 2 3 4 5
) Customers prefer to purchase replacement parts largely either from Branded shops
or from OEMs / authorized service stations
16
3.2 Conclusions and
Recommendations
Market segments for High grade plastics and Parts for evolving
technology aggregate would be attractive for Thai investors
Low High
“Thai auto component industry can supply tyres to Indian OEMs at cost effective
price.”
- Sourcing Manager, one of leading passenger car manufacturers
18
Thai Investors should initially focus on entering plastics, silicon
intensive electronics parts, rubber intensive parts auto components
19
Phase wise entry strategy for attractive auto
component segments
20
Thank You
Annexure
Major OEM players in India
Passenger Cars Commercial Vehicles Two-Wheelers Three-Wheelers
Maruti Suzuki Ashok Leyland Hero Honda Bajaj Auto
Hyundai Tata Motors Bajaj Auto Piaggio
Tata Motors Eicher Motors TVS Motors Mahindra & Mahindra
Honda Swaraj Mazda Royal Enfield Motors TVS Motors
Mahindra & Mahindra Volvo Kinetic Motors Tata Motors
Toyota MAN-Force Suzuki Motors Force Motors
Fiat Yamaha Motors
Ford
Volkswagen
Renault
Mercedes Benz
Skoda
BMW
Volvo
23
Auto Components Sub-segments and Key Players
24
Auto Components Sub-segments and Key Players
25
Auto Components Sub-segments and Key Players
26
Major Players for Auto Components – Key sub-segment
wise (contd…)
27