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Delhi, 2011
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
The key 5s
1. Going forward, India is a key pillar of global automotive market - policy, actions and strategies of players in India will have a fundamental impact on the global auto landscape 2. By 2015, India will exceed every major European market inc. Germany, France and UK in automotive sales - making India the 4th largest automotive market by volume in the world 3. Over the next 20 years, India will be part of global automotive triumvirate - the global BIG 3 4. In fact, we expect the India automotive sales to exceed the US market by mid 2030s 5. The global automotive game will be pretty much decided by twin forces for China and India
4.0
India
3.0
US 28%
EU 34%
2.5
2050 Estimate
Other 10%
India 17%
2.0
Thailand
US 26%
China 28%
1.5
EU 15% Japan 4%
1.0
20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20
Prepared for client name
Source: Global Insights Database, Business Week, Booz & Company analysis
Booz & Company DATE India Auto Market.ppt
Emerging markets are transforming the economic landscape could the future repeat the past ?
Percent Contribution of India & China, US, Western Europe and UK to World Economy
Percentage Contribution to World Economy
80% 80%
(15002050 AD)
60% 60%
India & China India & China
40% 40%
Western Europe (excluding UK)
US
20% 20%
UK
0% 1500 1800
1850 1850
1950 1950
2000 2000
2050
Note: UK, US and W. European countries do not include GDP from former British colonies Source: The World Economy-Historical Statistics; Goldman Sachs BRIC Report; Booz & Company research and analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
An assessment of parallels with markets such as China strengthen our belief in tomorrow
GDP Growth
$3,000 $3,000
$2,500
$2,500 $70,000
$2,000
$2,000
$60,000
In $ Bn
In $ Mn
1 3 5 7 9 11 13 15 17 19 21 23 25 27
$1,500
In $
$1,500
$1,000
$1,000
$500
$500 $10,000
$0 1 3 5 7 9 11 13 15 17 19 21 22 25 27
$0
$0 1 3 5 7 9 11 13 15 17 19 21 23 25 27
The twin pillars of the global economy, India & China, will define the economic landscape for generations to come
GDP Trends
2005 Constant Prices ($Trillion) $ Trillion 25 China Growth relative to 2005
11 10 9
China India
20 15
8 7 6
2040
% contribution to GDP
70% 60% 50% 40% 30% 20% 29% 10% 0% 1950 1990 2000 2007 2012 2020 22% 15% 56% 14%
11%
8%
Agriculture
Source: Global Insights Database, Economic Intelligence Unit, Booz & Company analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
Industry
Services
Industry is likely to benefit from the change in consumption pattern of an increasingly prosperous society
Private Consumer Spending
1994-2015
Index 100%
15 14
Transport / Comm.
29% 40%
13 12 11
% consumption of total
55%
8% 7% 16% 5% 13% 4%
Recreation
10 9 8 7 6
Total Consumption
6% 15% 3% 11%
23%
Transport / Comm.
5 4
20%
5% 19%
3% 6% 1994
3% 9% 2005
2015
Note: Miscellaneous includes personal care goods and other services Source: Central Statistics Organization (GOI), Booz & Company analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
This rise in per capita GDP will lead to higher vehicle ownership
Cars / 1000 People Versus GDP / Capita
Cars / 1000 People
600 550 500 450 400 350 300 250 200 150 100 50 0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000
Rising per capita income leading to increased penetration; trend expected to continue given low current levels Saturated penetration levels in developed economies
USA
Russia
India China
GDP / Capita
Source: Economist Intelligence Unit; Booz & Company analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
> 5% projected GDP growth 3.5 % - 5% projected GDP growth < 3.5% projected GDP growth
Source: Global Insight Database, Booz & Company analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
Automotive sales are destined to resonate with global economic shift - India is the place to be for the global OEMs
Automotive Sales by Geography
(Passenger Vehicles, Commercial Vehicles and Two Wheelers)
1980 Market size: 60 M units Asia & Japan: 7% Europe: 42% NA: 41%
2009
Market size: 102 M units Asia & Japan: 45% Europe: 32% NA: 18%
2020
Market size: 205 M units Asia & Japan: 65% Europe: 20% NA: 15%
1) Source:
Includes passenger vehicles, commercial vehicles and two-wheelers Global Insight Database, March 2009; Wards Auto; Booz & Company analysis
India Auto Market.ppt Prepared for client name
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Indias car market has the potential to grow up to 6+ millions units annually by 2020
Passenger vehicle sales in India (2001 2020)
Million Units 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Italy Car Sales 2008 - 1.9 M Units Spain Car Sales 2008 - 1.6 M Units Germany Car Sales 2008 - 3.1 M Units
Aggressive
Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc Aggressive scenario 14% CAGR upto 2015, after which market stabilizes (based on similar growth seen in the Chinese markets under similar macroeconomic conditions) Base Scenario 8% CAGR over 2009-2020; based on historical growth trends of the Indian car market Conservative Scenario 6% CAGR; car sales negatively impacted by economic downturn or unfavorable government policies (high interest rates, financing not easily accessible, etc) Source: Global Insight database, Booz & Company Analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
Note: Note:
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1,446
640
538
530
369
320
316
280
196
192
174
147
141
UN
IT ED
12
451
349
294
247
236
203
131
126
102
64
NO
IT ED
UN
NE
TH E
FI
13
Much earlier than 2020, India will exceed the major EU markets
Western Europe (2015) and India (2015)
5,500 5,070
4,500
3,693 3,500 2,598 2,566 2,500 2,434 1,624 1,500 617 500 608 342 341 323 299 245 203 171 160 151
N HE RL AN D S BE LG IU M SW ED EN AU ST SW RI A IT ZE R LA N D PO RT U G AL G R EE CE DE NM AR K
G DO M
IN DI A
FR AN C
G ER M
KI N
SP AI
-500
NO
IT ED
Note: Forecasts for 2015 Source: Global Insight Database, Booz & Company analysis
Booz & Company DATE India Auto Market.ppt Prepared for client name
UN
NE T
NL AN D IR EL AN D
IT AL Y
RW AY
NY
FI
14
Potential for Indian market to Potential for Indian market to reach revenues of $150 -- $200 reach revenues of $150 $200 billion billion
Note: 2030 sales and GDP projections are based on annual GDP growth rates projected by country per GS BRIC report Source: Global Insight Database, March 2009; Goldman Sachs BRIC Report; Booz & Company analyses
Booz & Company DATE India Auto Market.ppt Prepared for client name
15
Million Units
Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc Source: Global Insight Database, Booz & Company analyses
Booz & Company DATE India Auto Market.ppt Prepared for client name
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We expect not just a quantitative but also a qualitative change in the market
Indian household income & car sales distribution
2008
% of households
60%
50%
40%
40%
30%
30%
20%
10%
0%
B $3K - $5K
C $5K - $10K
D $10K - $15K
MPV
SUV
$25K - $35K
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B $3K - $5K
C $5K - $10K
D $10K - $15K
MPV
SUV
$25K - $35K
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2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etc Source: Global Insight Database, Booz & Company analyses
Booz & Company DATE India Auto Market.ppt Prepared for client name
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Chicago
Vikas Sehgal Partner +1-312-578-4828 vikas.sehgal@booz.com
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