SLOWDOWN OF

AUTOMOTIVE INDUSTRY
IN INDIA.

BY :-
SOP2 ,B2
1
 TEAM MEMBERS

 SREEJITH KURUP
 RAKESH KR. VERMA

 VIKASH SINGH

 MADAN MOHAN

2
SOP OWNER.

MR. BINU.R

3
 CONTENT.
 INTRODUCTION
 SEGMENTATION & CONTRIBUTION TO GDP
 GROWTH RATE
 AUTOMOBILE PRODUCTION TRENDS
 FESTIVAL SALES
 DOMESTIC SALES
 IMPACT OF SLOWDOWN
 SCOPE
 CHALLENGES
 INCENTIVES
 OPPORTUNITIES
 ACMA APPEAL
 CONCLUSION
 BIBLIOGRAPHY
4
 INTRODUCTION
>10th largest in the world with an annual
production of 11.07 million units.
>One of the key industry propelling Indian
economy.
>Provide employment to 1.31 crore (13.1
million) people including both direct &
indirect employment.
>100% FDI is permissible.
> It crossed a total turnover of over US $15
billion(Rs64,500crore).
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 SEGMENTATIONS &
CONTRIBUTION TO GDP.
Automobile industry in India is
segmented into three parts:-
 Two wheeler

 Four wheeler

 Heavy vehicle

>Adds 4-5% to the country’s GDP.

>Contributing 17% to the kitty of
indirect taxes to the government.
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 GROWTH RATE
 Performance of the industry for the
fiscal year 2006-07 was very upbeat.
Overall growth rate of this sector was
13.56%.
 The growth rate of automobile sector
in fiscal year 2007-08 was 10.7%.
 The growth rate of automobile sector
in current fiscal year is just 4.3%.
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 AUTOMOBILE
PRODUCTION TRENDS
Category 2006-07(in th) 2007-08(in th)
Passengers cars 1323 1012
Utility vehicles 222 175
Total Cvs 520 388
Total two 8444 6100
wheelers
Three wheelers 556 382
Grand total 11.065(mn) 8.057(mn)
Growth% 13.56 10.7(-2.8)
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FESTIVAL FAILURES.
 Vehicles sales declined by 14.42% in
October to 8.65 lakh against 10.11 lakh
last year.
 According to SIAM domestic car sales
falls 6.59% to 98,900 units in oct 08
against 1.05 lakh units in oct 07.
 Maruti Suzuki and Tata Motors are the
most affected companies.

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 DOMESTIC SALES.

Source: BUSINESS LINE

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IMPACT OF SLOWDOWN
ASHOK LEYLAND:-
 AL has decided for three days work a

week to decrease the production, as

the demand has decreased by 40%.
 It has reported 50% slump in October

sales as compared to last year.

 Ashok Leyland shares fell to Rs15.10.

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 Contd..
TATA MOTORS:-
 TM has given three days holidays from 6-

8 nov to match production with demand.

 No work notice to its non permanent

workers.
 Sales decreased by 25-40% last month.

 Shares dropped to Rs131 as 52 week

lowest.

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 Contd..
HYUNDAI MOTORS:-
 HMIL Target was to sell 6 lakhs cars in 2008
which includes export of 2.7lakhs cars. But
now the target is to close with 5.15 lakhs
cars.
 In 2007 HMIL total sales went by 9.2% to
3,27,160 cars of which domestic sales rose
by 7.6% to 2lakh & exports 11.8% to
1.26lakh cars.
 Company sold 4.07 lakh cars till October, up
by 49% over the same period in 2007 which
include domestic sales of 2.15lakh, 28%
increase & export of 1.92lakh cars an
increase of 83%. 13
 Contd..
MARUTI SUZUKI:-
 During the financial year 2006-07, it sold
6,35,629 units with a turnover of Rs145.9
billion with a profit of Rs15.62 billion
having a market share of 54.6%.
 It sold 7,64,842units including export of
53024 units. The sales rose up by 13.3% in
the year 2007-08. the company had a total
income of 1,88,238 million with a profit of
17,308 million after tax.
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 Contd…

October Till October.

2008 2007 % 2008-09 2007-08 %
change change

Domestic 59127 64258 -8 410926 401016 2.5

Export 5363 5717 4 35599 29393 21.1

Total sales 64490 69415 -7.1 446525 430409 3.7

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 SCOPE
# The industry is going through a phase of
rapid changes and high growth. With new
projects coming up on a regular basis, the
industry is undergoing technological
evolutions to compete with world players.
# The major players are expanding their
plants and focusing on mass customization,
mass production, etc.
# The overall investment in the sector has
been increasing quite rapidly.
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 Contd…
Indian automobile sector will be investing a
huge amount of Rs. 30,000 crores by 2010.
# For example-----
• Maruti Udyog Ltd has plans of investing Rs.
6,500 crores.
• Tata Motors is coming up with an investment
of Rs. 2,000 crores in its compact car project.
• Apart from the Indian auto giants foreign
players like Hyundai is also coming up with
an investment plan of more than Rs. 3,800
crores in India.

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CHALLENGES

 Lack of the availability of

consumer finance.
 Rise in the cost of raw materials.
 High Interest rates.
 High cost of fuel.
 Fall in demand.

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 INCENTIVES
 Excise duty on small cars reduced to
14%
 Excise cut on two and three wheelers to
12%
 Excise duty on buses and chassis cut
from 16% to 12%
 Excise duty on hybrid cars cut from 24%
to 14%
 Custom duty on steel reduced from 5%
to nil.

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 OPPORTUNITIES

 Among fastest growing car market .

 Overall growth of 9%.
 Focus on to set up R&D and
engineering centers.
 Exposure to address the global auto
market while leveraging the domestic
market.
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 ACMA APPEAL
 ACMA -- Automotive components Association
of India.
 It has appealed to government to provide a

relief package in the form of “Bridge Policy”

to help the sector cope with the current
economic slowdown.
 The president of ACMA has suggested some

measures to the government to be

implemented as soon as possible.
They are:-
>Waving off of custom duty on raw material.
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 Contd…
>Assured funding from bank on capital
expenditure.
>Increasing the time of repayment of
SME’s.
>Further cut down on the CRR.
>Special loan scheme for the auto
component industry at concessional
rate.
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 CONCLUSION.
India is a developing economy and
has immense potential to overcome
the hindrance. But currently
government need to provide some
immediate relief to the industry to
sustain their growth over the next
few months so as to ensure that the
momentum built over the last five
years is continued in the future also.
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 BIBLIOGRAPHY
 http://www.automobileindia.com
 http://www.newstrackindia.com
 http://www.indianbusiness.nic.in
 http://www.business.mapsofindia.com
 http://www.automotiveworld.com
 The Economic times
 The Hindu
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questions ???????...
most welcome

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Thanks

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