Académique Documents
Professionnel Documents
Culture Documents
IndianAutomobilesIndustryReportAutomobilesSectorResearch&AnalysisinIndiaEquitymaster
HowtoProfit
fromIPOs.
ReadNow
Home>ResearchIt>SectorInfo>AutomobilesFebruary03,2016
AutomobilesSectorAnalysis
Report
S&PBSEAUTO
22,374.900.57%
Sep14,2016(Close)
[KeyPoints|FinancialYear'15|
Prospects|SectorDo'sandDont's]
TheTheIndianautomobilemarketcanbedividedintoseveral
segments viz., twowheelers (motorcycles, geared and
ungearedscootersandmopeds),threewheelers,commercial
vehicles (light, medium and heavy), passenger cars, utility
vehicles(UVs)andtractors.
Demand is linked to economic growth and rise in income
levels. Per capita penetration at around nine cars per
thousand people is among the lowest in the world (including
other developing economies like Pakistan in segments like
cars).
Whiletheindustryishighlycapitalintensiveinnatureincase
of fourwheelers, capital intensity is a lot less for two
wheelers. Though threewheelers and tractors have low
barriers to entry in terms of technology, four wheelers is
technology intensive. Costs involved in branding, distribution
network and spare parts availability increase entry barriers.
WiththeIndianmarketmovingtowardscomplyingwithglobal
standards, capital expenditure will rise to take into account
futuresafetyregulations.
As compared to their global counterparts, both the two
wheeler as well as four wheeler segments are relatively
lesserfragmented.However,thingshavechanged,especially
on the passenger cars front as many foreign majors have
enteredtheIndianmarket.Asaresult,pricingpowerislikely
todiminishgoingforward.
ViewDetailedQuote
S&PBSEAUTO5YRANALYSIS
TATAMOTORS
MARUTISUZUKI
HEROMOTOCORP
BAJAJAUTO
ASHOKLEYLAND
EICHERMOTOR
More
COMPARECOMPANY
TATAMOTORS(Change)
CompareWith
OTHERUSEFULLINKS
DetailedSectorResearchReports
IdentifyingStocks:Do'sAndDont's
AutomobilesSectorQuotes
LatestAutomobilesSectorResults
FastestGrowingAutomobilesCompanies
AutomobilesCompaniesWithHighestDividend
Yield
MARKETSTATS
Automobilemajorsincreaseprofitabilitybysellingmoreunits.
Asnumberofunitssoldincreases,averagecostofsellingan
incremental unit comes down. This is because the industry
hasahighfixedcostcomponent.Thisisthekeyreasonwhy
operating efficiency through increased localization of
components and maximizing output per employee is of
significance.
GainersToday
Automobiles
25results
Go
KeyPoints
Supply
TheIndianautomobilemarkethassomeamountof
excesscapacity.
https://www.equitymaster.com/researchit/sectorinfo/auto/AutomobilesSectorAnalysisReport.asp
1/5
9/14/2016
IndianAutomobilesIndustryReportAutomobilesSectorResearch&AnalysisinIndiaEquitymaster
Demand
Largelycyclicalinnatureanddependentupon
economicgrowthandpercapitaincome.
Seasonalityisalsoavitalfactor.
Barriersto
entry
Highcapitalcosts,technology,distributionnetwork,
andavailabilityofautocomponents.
Bargaining
powerof
suppliers
Low,duetostiffcompetition.
Bargaining
powerof
customers
Veryhigh,duetoavailabilityofoptions.
Competition High.Expectedtoincreaseevenfurther.
TOP
FinancialYear'15
Atotalof16mtwowheelersweresoldinFY15,agrowthof
atepid8%overthepreviousyear.Theslowgrowthwason
account of the tepid recovery in the Indian economy.
Motorcycles accounted for 70% of the total two wheelers
soldandgrewbyamere2.5%YoY.Thescooters(geared&
ungeared)segmentwasthestarofthetwowheelerindustry
logging in a growth rate of 25% YoY. In the domestic
market, volumes in the 3wheeler segment were up 11%
YoYledbypassengercarriers.Exportsgrowthwashealthy
at15%YoY.
Aftertwoconsecutiveyearsofsteepdeclines,FY15wasa
strongyearforthemediumandheavycommercialvehicles
(M/HCVs) segment as volumes increased 16% led by
reversal of mining bans, resumption of some stalled
infrastructure projects, improvement in freight rates and
overall operations of fleet operators. LCVs, however, were
atthereceivingendasvolumesdroppedby12%YoY.Asa
result,volumesfortheoverallCVindustryfellby3%YoY.
Tractors performed badly during the year as monsoons in
2014 were quite poor and erratic. M&M, which is a market
leader in the tractors space, saw a revenue decline of 7%
fromitsfarmequipmentdivision.
Volumes of passenger vehicles (PV) grew by 4%. Within
this,passengercarsandutilityvehicles(UVs)grewby5%
YoY each. Volumes of vans, however, declined by 10%
YoY during the year. Maruti Suzuki remained the market
leader in the passenger vehicles space. Volumes of vans
for the company grew at a robust pace of 26% YoY even
thoughtheindustryvolumesdeclined.Thecompanyscars
andutilityvehiclesgrewindoubledigitsduringtheyear.
Most of the companies reported an improvement in
https://www.equitymaster.com/researchit/sectorinfo/auto/AutomobilesSectorAnalysisReport.asp
2/5
9/14/2016
IndianAutomobilesIndustryReportAutomobilesSectorResearch&AnalysisinIndiaEquitymaster
VIEWSONNEWS
MOSTPOPULAR
BajajAuto:Boggedby
PoorExports
(QuarterlyResultsUpdate
NoMatterWhoWins,
EveryoneWillLeave
ThisBattleWorseOff
Detailed)
(The5MinuteWrapup)
Aug16,2016
Sep2,2016
BajajAutoannouncedits
resultsforthefirstquarter
endedJune2016.
Revenuesandnetprofits
RelianceJio's'freelunch'
strategyraisesanimportant
questionaboutthe
effectivenessofpricewars
https://www.equitymaster.com/researchit/sectorinfo/auto/AutomobilesSectorAnalysisReport.asp
3/5
9/14/2016
IndianAutomobilesIndustryReportAutomobilesSectorResearch&AnalysisinIndiaEquitymaster
grewby3.5%YoYand
2.2%YoYrespectively
duringthequarter.
MarutiSuzuki:Hitby
ProductionIssues
(QuarterlyResultsUpdate
Detailed)
Aug1,2016
MarutiSuzukiannounced
itsresultsforthefirst
quarterendedJune2016
recently.Thecompany
reporteda12%YoYand
23%YoYgrowthinsales
andnetprofitsrespectively.
ModiRajanBhaiBhai,
FinancialSavingsof
HouseholdsataFive
YearHigh
(VivekKaul'sDiary)
Sep1,2016
Thegovernmentmanaged
tocontrolfoodinflation
whereastheRBImanaged
tocontrolinflationary
expectations.
Jio'sDataPricingto
DisrupttheTelecom
AppleCart
(ChartOfTheDay)
M&M:APickUpin
TractorVolumes
(QuarterlyResultsUpdate
Detailed)
Sep2,2016
RJIO'sentrytocreateabig
shakeupinthetelecom
industry.
Jul26,2016
M&Mreporteda13%YoY
and14%YoYgrowthin
salesandnetprofits
respectively(M&Mand
MVMLcombined)during
thequarterendedMarch
2016.
AshokLeyland:AVery
SolidFinish
(QuarterlyResultsUpdate
HandyTipstoTeach
ChildrenaboutMoney
(OutsideView)
Sep2,2016
PersonalFNbelieves,
parentswhoteachchildren
aboutmoneyatanearly
stageoflifeandkeep
themselvesabreast,make
theirchildrenfutureready.
Detailed)
TheGambler'sFallacy
Jun23,2016
(DailyProfitHunter)
AshokLeylandannounced
itsnumbersforthequarter
endedMarch2016.The
companyreporteda32.2%
YoYgrowthinrevenues,
whilenetprofitsfellby
66.5%YoY.
Sep2,2016
Manytradesfallpreytothe
gambler'sfallacy.This
leadsthemtotakeundue
riskandholdontolosing
tradestoolong
More
HeroMoto.:Poor
sales,healthy
profits
(QuarterlyResultsUpdate
Detailed)
May9,2016
HeroMotocorpannounced
resultsforthefourthquarter
endedMarch2016.
Revenuesandnetprofits
grewby11%YoYand71%
https://www.equitymaster.com/researchit/sectorinfo/auto/AutomobilesSectorAnalysisReport.asp
4/5
9/14/2016
IndianAutomobilesIndustryReportAutomobilesSectorResearch&AnalysisinIndiaEquitymaster
YoYrespectivelyforthe
quarter.
MoreViewsonNews
CopyrightEquitymasterAgoraResearchPrivateLimited.
SiteLock
Whitelist|Refer|Terms|Privacy|Contact|Advertise|About|TheEquitymasterWay|Sitemap
FollowUs:
https://www.equitymaster.com/researchit/sectorinfo/auto/AutomobilesSectorAnalysisReport.asp
5/5