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Automobile December 2023

The automobile sector in India has evolved significantly over time: 1) Before 1982 it was a closed market with 5 players, long waiting periods, and outdated models. 2) Between 1983-1992 the Indian government partnered with Suzuki to form Maruti Udyog and commence local production. 3) From 1992-2020 the sector was de-licensed and major automakers began assembly operations in India, imports were permitted, and the market became more competitive and consumer-driven. 4) Currently in 2023 the three-wheeler, commercial vehicle, and electric vehicle sectors are growing as environmental concerns rise and policies support the shift to more sustainable transportation.

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0% found this document useful (0 votes)
22 views29 pages

Automobile December 2023

The automobile sector in India has evolved significantly over time: 1) Before 1982 it was a closed market with 5 players, long waiting periods, and outdated models. 2) Between 1983-1992 the Indian government partnered with Suzuki to form Maruti Udyog and commence local production. 3) From 1992-2020 the sector was de-licensed and major automakers began assembly operations in India, imports were permitted, and the market became more competitive and consumer-driven. 4) Currently in 2023 the three-wheeler, commercial vehicle, and electric vehicle sectors are growing as environmental concerns rise and policies support the shift to more sustainable transportation.

Uploaded by

Nishita Kanabar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 29

AUTOMOBILES

December 2023
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 4

Market Overview 6

Recent Trends and Strategies 13

Growth Drivers and Opportunities 16

Key Industry Contacts 24

Appendix 26

2
Executive summary
1 Segmented market
▪ The automobile sector is split into four
segments, i.e., two-wheelers, three-
wheelers, passenger vehicles, and
commercial vehicles, each having few

1
market leaders.
3 Third-largest
▪ In FY22, two-wheelers and passenger cars
held a market share of 77% and 18%,
automobile market
respectively. ▪ In November 2023, total passenger
vehicle sales reached 3,34,130*. Sales of
▪ India is the largest E2W and E3W
Passenger Vehicles in November 2023
manufacturer in the world.
have been the highest, with a marginal
▪ 16,23,399 two-wheeler units were sold in growth of 3.7%, compared to November
November 2023.

2 Growth prospects
2 3 2022.

▪ This sector's share of the national GDP


increased from 2.77% in 1992–1993 to
▪ The Indian automotive industry is expected around 7.1% presently. It employs about
to reach US$ 300 billion by 2026. 19 million people directly and indirectly.
▪ Strong policy support from the ▪ Presence of established domestic and
Government. international original equipment
manufacturers (OEMs).
▪ A study by the CEEW Centre for Energy
Finance recognised a US$ 206 billion ▪ Strong market in terms of domestic
opportunity for electric vehicles in India by demand and exports.
2030. This will necessitate a US$ 180
billion investment in vehicle manufacturing
and charging infrastructure.
Sources: SIAM
Notes: *BMW, Mercedes, JLR & Volvo Auto data is not available. Tata Motors Domestic Sales data included only in Passenger Vehicles. Without Tata Motors, Passenger Vehicles would
be 3,02,521 for July 2023

3
Advantage India

4
Advantage India
1 Growing demand 4 Opportunities
► Rise in middle-class income and young ► Focus shifting on electric cars to
population may result in strong growth. reduce emissions.
► The Indian automotive industry is ► Government aims to transform India
targeting to increase the export of into an R&D hub.
vehicles by five times during 2016-26.
► India could be a leader in shared
► In November 2023, the total production
mobility by 2030, providing
of passenger vehicles*, three-wheelers,
opportunities for electric and
two-wheelers, and quadricycles was
autonomous vehicles.
2.22 million units.
► In FY23, total automobile exports from ► The electric vehicles industry is likely
India stood at 47,61,487. 1 4 to create five crore jobs by 2030.
► The global EV market was estimated at ► By 2030, the Indian government has
approximately US$ 250 billion in 2021 committed that 30% of the new vehicle
and by 2028, it is projected to grow by sales in India would be electric.
5 times to US$ 1,318 billion. ADVANTAGE
INDIA 3 Policy support
2 Rising Investments 2 3 ► Automotive Mission Plan 2016-26 is a
► India has significant cost advantages. Auto mutual initiative by the Government of
firms save 10-25% on operations vis-a-vis India and the Indian automotive industry to
Europe and Latin America. lay down the roadmap for the development
► The automobile sector received a of the industry.
cumulative equity FDI inflow of about US$
► The Government aims to develop India as
35.40 billion between April 2000 -
a global manufacturing centre.
September 2023.
► India is on track to become the largest EV ► The FAME Scheme was extended for a
market by 2030, with a total investment further period of 2 years up to 31st March,
opportunity of more than US$ 200 billion 2024.
over the next 8-10 years.

Notes: *Data except for BMW, Mercedes, Tata Motors & Volvo Auto
Sources: Automotive Mission Plan (2016-2026), Make in India, SIAM, ICRA, Federation of Automobile Dealers Association, News Article, DPIIT

5
Market Overview

MARKET OVERVIEW

6
Evolution of the sector

Before 1982 1983-1992 1992-2020 2020 Onwards

▪ Closed market ▪ Indian Government & ▪ Sector de-licensed in 1993. ▪ In November 2023, three-wheeler
▪ 5 players Suzuki formed Maruti ▪ Major OEMs started assembly sales stood at 59,738 units.
▪ Long waiting periods & Udyog and commenced operations in India. ▪ In FY23, total commercial vehicle
outdated models production in 1983. ▪ Imports permitted from April sales stood at 9,62,468 units,
▪ Seller’s market ▪ Component 2001. three-wheeler sales stood at
manufacturers entered ▪ Introduction of value-added tax 4,88,768 units and two-wheeler
the market via a joint in 2005. sales stood at 1,58,62,087 units.
venture (JV).
▪ Automotive Mission Plan 2016-
▪ Buyer’s market. 26 launched in 2015.
▪ Bharat Stage (BS) IV emission
norms used since April 2017,
and BSVI norms adopted from
April 1, 2020.

Sources: Tata Motors, Society of Indian Automobile Manufacturers (SIAM)

7
Market overview

Automobile Sector

Commercial
Two-wheelers Passenger vehicles Three-wheelers
vehicles

Mopeds and electric Light commercial


Passenger cars Passenger carriers
scooters vehicles (LCV)

Medium & heavy


Scooters Utility vehicles Goods carrier
commercial vehicles

Multi-purpose
Motorcycles
vehicles

Source: Society of Indian Automobile Manufacturers (SIAM)

8
Market overview

Number of Automobiles Produced in India (in million) Number of Automobiles Sold in India (in million)

35.00 30.00

30.00 25.00 26.27


30.92
29.07 24.97
25.00 26.36 21.86
25.33 25.93 20.00 21.55 21.20
22.65 23.04 18.61
20.00 17.61
15.00
15.00 14.18
15.56 10.00
10.00
5.00
5.00

0.00
0.00
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24*
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24*

▪ The automotive manufacturing industry comprises the production of commercial vehicles, passenger vehicles, three-wheelers, and two-wheelers.
▪ In (April-November) 2023-24, the total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles
was 15.56 million units.
▪ India accomplished a significant milestone, with the sale of 8,32,434 EVs in FY24 (till August 2023).
▪ The Indian auto industry is expected to record strong growth in FY23, post recovering from the effects of the COVID-19 pandemic. Electric
vehicles, especially two-wheelers, are likely to witness positive sales in FY23.
▪ A report by India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026. In addition, a
projection for the EV battery market is forecast to expand at a CAGR of 30% during the same period.

Notes: * - Till November 2023


Source: Society of Indian Automobile Manufacturers (SIAM), The Economic Times

9
Market overview

Segment-wise Domestic Market Share in FY23 (%) Number of Automobiles Exported (in millions)

2.31% 0.00% CAGR 7.51%


6.0
4.54% 5.5
5.62
5.0
18.35% 4.5 4.77 4.77
Two Wheelers 4.63
4.0
4.04 4.13
Passenger Vehicles 3.5
3.64 3.48
Commercial Vehicles 3.0
2.5
Three Wheelers
2.0
Quadricycles 1.5
74.81%
1.0
0.5
0.0
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

▪ Two-wheelers and passenger vehicles dominate the domestic Indian Indian Car Sales Figures - November 2023
auto market. Passenger car sales are dominated by small and Market Share
PV OEM November 2023 November 2022
midsized cars. Two-wheelers and passenger cars accounted for (%) Nov 23
74.81% and 18.35% of market shares, respectively, in FY23. Maruti Suzuki 1,49,929 1,25,355 41.60%
▪ Indian automobile exports of two-wheelers stood at 36,52,122 in
Tata Motors 53,539 41,177 14.85%
FY23.
Hyundai 49,716 45,836 13.79%

Mahindra 38,933 29,915 10.80%

Kia 19,885 19,926 5.52%

Source: Society of Indian Automobile Manufacturers (SIAM), Federation Of Automobile Dealers Associations (FADA), News Article

10
Clusters and leading companies

List of Companies

▪ Ashok Mazda ▪ Tata Motors ▪ JCB


Leyland ▪ Amtek Auto ▪ Bajaj Auto ▪ Yamaha
▪ Force ▪ Eicher ▪ Hero Group ▪ Mahindra
North Motors ▪ Honda SIEL ▪ Escorts ▪ Suzuki
▪ Piaggio Motorcycles
▪ Maruti ▪ ICML
Delhi-Gurgaon- ▪ Swaraj Suzuki
Faridabad
▪ Ashok ▪ Eicher ▪ Volkswagen Benz
Leyland ▪ Skoda ▪ Renault- ▪ Tata Hitachi
▪ Bajaj Auto ▪ Bharat Nissan ▪ Volvo Eicher
West
▪ FIAT Forge ▪ John Deere
▪ M&M ▪ Tata Motors ▪ Mercedes

▪ TataMotors ▪ International
Kolkata- Auto
▪ Hindustan
Jamshedpur Motors Forgings
Mumbai-Pune- East
▪ Simpson & ▪ JMT
Nashik- Co ▪ Exide
Aurangabad

▪ Ashok ▪ Sundaram ▪ TVS Motor ▪ Caterpillar


Chennai- Bengaluru- Leyland Fasteners Company ▪ Hindustan
Hosur ▪ M&M ▪ Enfield ▪ Renault- Motors
South Nissan
▪ Toyota ▪ Hyundai
Kirloskar ▪ BMW ▪ TAFE
▪ Volvo ▪ Bosch ▪ Daimler

Over the past few years, four specific regions in the country have become large auto manufacturing clusters, each having a different set of
players.

Sources: ACMA

11
Key players

Each segment in the Indian automobiles sector have few established key players, who hold a major portion of the market.

2 COMMERCIAL VEHICLES 3 TWO-WHEELERS


▪ In November 2023, commercial vehicles ▪ In November 2023, Hero MotoCorp sold 8,02,234 two-
domestic sales stood at 84,586 units. wheelers, the highest in the segment, which gave it a
▪ In November 2023, Tata Motors sold 29,7005 market share of 35.70%.
commercial vehicles, the highest in the segment,
which gave it a market share of 35.11%

1 PASSENGER VEHICLES
▪ In November 2023, total passenger vehicle 4 THREE-WHEELERS
sales reached 3,60,431.
▪ In November 2023, Maruti Suzuki was the ▪ In November 2023, Bajaj Auto was the
top passenger vehicle seller with 1,49,929 leader in the three-wheeler category
passenger vehicle units sold. with a 36.76% market share, having
sold 36,716 units in the month.

2 3

1 4

Source: SIAM, FADA

12
Recent Trends and Strategies

RECENT TRENDS AND STRATEGIES

13
Recent trends
1 Luxury vehicles
▪ The luxury car market registered sales of 27,348 units in
FY22.
▪ In November 2023, Mercedes-Benz sold 1,234 luxury
cars, the highest in the segment, which gave it a market
share of 0.34%. BMW sold 1,000 cars in November 2023.
▪ The Mercedes E-Class is the highest-selling luxury car in
the Indian market, with sales of 2,834 in FY22. 3 New financing
▪ In February 2023, German luxury car maker Audi India
began local production of the Audi Q3 and Audi Q3
options
Sportback at the Skoda Auto Volkswagen India Private

1
▪ According to NITI Aayog and Rocky
Limited (SAVWIPL) plant in Aurangabad.
Mountain Institute (RMI), India's EV finance
industry is likely to reach Rs. 3.7 lakh crore
(US$ 50 billion) in 2030.
▪ In October 2021, Maruti Suzuki India
2 Catering to Indian needs Limited (MSIL) announced that with its
▪ Most firms including Kia Motors and launch of Smart Finance, Maruti Suzuki
customers can avail of finance options

2
Volkswagen have adapted themselves to cater
to the large Indian middle-class population by
dropping their traditional structure and designs.
This has allowed them to compete directly with
domestic firms, making the sector highly
3 online in an integrated platform for a one-
stop solution. MSIL has integrated its online
‘Smart Finance’ platform with 14 financiers
to offer competitive interest rates.
competitive. ▪ In November 2021, Mahindra & Mahindra
▪ Tata Motors introduced the Ace Gold Petrol CX Financial Services (Mahindra Finance)
in July 2021, which is India's cheapest, most launched 'Quiklyz’, a lease-based vehicle
compact commercial four-wheeler vehicle, subscription business for urban centres.
starting at Rs. 3.99 lakh (US$ 5,362). For this, Quiklyz will offer multi-brand vehicle leasing
it has partnered with the State Bank of India to and subscriptions. The company plans to
provide up to 90% financing of on-road pricing, expand Quiklyz to 30 cities within a year.
with monthly EMIs starting at Rs. 7,500 (US$
101).

Sources: Society of Manufacturers of Electric Vehicles, Moneycontrol, News Articles

14
Strategies adopted

1 Capacity addition
▪ Indian carmakers committed US$ 10 billion to add a new
capacity of 2.2 to 3 million units.
▪ In November 2023, Tata Motors inaugurated its state-of-the-
art Registered Vehicle Scrapping Facility in Chandigarh.
3 Launch of new models
▪ In October 2023, Hero MotoCorp inaugurated its first state-
of-the-art premium dealership in India. ▪ In January 2023, Tata Motors
showcased Tata Altroz CNG at the Auto
▪ In October 2023, Tata Motors signed a definitive agreement Expo 2023.
to acquire a 27% stake in Freight Tiger, a software-as-a-
▪ In September 2022, Maruti Suzuki

1
service (SaaS) company, for Rs. 150 crore (US$ 17.99
million). launched the Grand Vitara at a starting
price of Rs. 10.45 lakh (US$ 12,915).
▪ Two-wheeler EV maker HOP Electric Mobility, a diversified
business venture of Rays Power Infra, is looking at investing ▪ Honda unveiled the new all-new City
Rs. 100 crore (US$ 13.24 million) over the next two years to hybrid mid-size sedan on May 4, 2022,
expand manufacturing capacity for its EVs.committed launching at Rs. 19.5 lakh (US$
25,073.55).
2 Electric vehicles ▪ In December 2021, Kia launched its
▪ The electric vehicle (EV) market is estimated to
reach Rs. 50,000 crore (US$ 7.09 billion) in India
by 2025.
2 3 fourth vehicle in India, the Carens MPV,
starting at Rs. 8.99 lakh (US$ 11,926)
▪ In November 2021, Volvo India launched
▪ India accomplished a significant milestone, with its Hybrid XC90 SUV at a starting price
the sale of 8,47,439 EVs in FY24 (till August of Rs. 89.90 lakh (US$ 121,062).
2023). A y-o-y growth of 209.17% was witnessed
with 1.02 million registered EVs in FY23, as ▪ In November 2021, Maruti Suzuki
compared to FY22. launched the new Celerio at the starting
price of Rs. 4.99 lakh (US$ 6,719). It will
▪ In February 2022, a memorandum of
be available in four variants.
understanding (MoU) was signed between
electric two-wheeler company Ather Energy and ▪ In October 2021, Tata Motors launched
Electric Supply Companies (ESCOMs) of Tata Punch, a mini-SUV, at the starting
Karnataka for setting up 1,000 fast charging price of Rs. 5.49 lakh (US$ 7,318). It will
stations across the state. be available in four variants.
Sources: News Articles

15
Growth Drivers and Opportunities

GROWTH DRIVERS

16
Policies and initiatives…(1/2)

NATRIP

1 •

Setting up of R&D centres at a total cost of US$ 388.5 million to enable the industry to be on par with global standards.
Under National Automotive Testing and R&D Infrastructure Project (NATRIP), five testing and research centres have been
established in the country since 2015.

Production-linked Incentive (PLI) Scheme


• In September 2021, the Indian government issued a notification regarding a PLI scheme for automobile and auto components
worth Rs. 25,938 crore (US$ 3.49 billion). This scheme is expected to bring investments of over Rs. 42,500 (US$ 5.74 billion) by
2026.
• The Union Cabinet outlaid Rs. 57,042 crore (US$ 7.81 billion) for the automobiles & auto components sector under the
Department of Heavy Industries.

2 • In November 2021, under the production-linked incentive (PLI) scheme for automobiles, the Union Government added >100
advanced technologies, including alternate fuel systems such as compressed natural gas (CNG), Bharat Stage VI compliant flex-
fuel engines, electronic control units (ECU) for safety, advanced driver assist systems and e-quadricycles.
• In May 2021, the Central Government approved a PLI scheme for manufacturing Advanced Chemistry Cells (ACC) with a budget
of Rs. 18,100 crore (US$ 2.33 billion). In March 2022, four firms, namely Reliance New Energy Solar Limited, Ola Electric
Mobility Private Limited, Hyundai Global Motors Company Limited, and Rajesh Exports Limited, were elected to receive the
incentives.

The Automotive Mission Plan 2016-26 (AMP 2026)

3 • AMP 2026 targets a four-fold growth in the automobile sector in India which include manufacturers of automobiles, auto
components and tractors over the next 10 years.

FAME
• The Government approved FAME and plans to cover all vehicle segments and all forms of hybrid & pure EVs. FAME-I was extended

4 •
until March 31, 2019.
In February 2019, the Government of India approved FAME-II scheme with a fund requirement of Rs. 10,000 crore (US$ 1.2 billion)
for FY20-22. The Centre approves US$ 97.77 million (Rs. 800 crore) for 7,432 public fast charging stations under the FAME Scheme
Phase II. The FAME Scheme was extended for a further period of 2 years up to March 31st, 2024.

Sources: News Articles

17
Policies and initiatives…(2/2)

Clean Tech Scheme


5 • The Indian government has planned ~US$ 3.5 billion in incentives over a five-year period until 2026 under a revamped
scheme to encourage production and export of clean technology vehicles.

Flex-fuel Engines
• In September 2021, Minister of Road Transport and Highways, Mr. Nitin Gadkari, announced that government is planning to

6 make it mandatory for car manufacturers to produce flex-fuel engines after getting the required permissions from the Supreme
Court of India.

Ethanol Blending
• In July 2022, the Government amended the National Policy on Biofuels – 2018. The target of 20% blending of ethanol in petrol

7 and 5% blending of biodiesel in diesel by 2030 was brought forward to 2025-26.

Battery Waste Management Rules, 2022


• Ministry of Environment, Forest and Climate Change, Government of India published the Battery Waste Management Rules,

8 2022 on August 24th, 2022 for environmentally sound management of waste batteries, including EV batteries.

Sources: News Articles

18
Growth drivers

1 Policy support 3 Support


▪ Initiatives like Make in India, the
Automotive Mission Plan 2026, and infrastructure and
NEMMP 2020 will give a huge boost to
the sector. high investment
▪ The government introduced a battery-
swapping policy, which will allow • Ola Electric IPO to be the first auto
company in India to launch an IPO in over

1
drained batteries to be swapped with
charged ones at designated charging two decades (20 years). It has an expected
stations, thus making EVs more viable size of Rs. 8,500 crore (US$ 1.01 billion).
for potential customers. ▪ In April 2023, Power Finance Corporation
▪ To install electric vehicle supply Ltd (PFC) approved a US$ 76.39 million
equipment (EVSE) infrastructure for (Rs. 633 crore) loan for 5,000 passenger
EVs, various public sector firms, EVs and 1,000 cargo EVs.
ministries, and railways have come ▪ In March 2023, the Central government
together to create infrastructure, and sanctions US$ 72.41 million (Rs. 800 crore)

2
manufacture components.

3
under FAME India Scheme Phase II to
Indian Oil (IOCL), Bharat Petroleum
2 Growing demand (BPCL), and Hindustan Petroleum (HPCL),
for setting up 7,432 public fast charging
▪ Rising income and a growing young stations across the country.
population. ▪ In November 2022, Mahindra & Mahindra
announced that they had tied up with three
▪ Greater availability of credit and electric vehicle infrastructure partners - Jio-
financing options. bp, Statiq, and Charge+Zone - to offer
charging solutions for their range of
▪ Demand for commercial vehicles passenger electric vehicles.
increasing due to the high level of
activity in the infrastructure sector.

Note: NEMMP - National Electric Mobility Mission Plan


Source: Society of Indian Automobile Manufacturers (SIAM), Union Budget 2022-23

19
Investment scenario (1/3)
The Indian automobile sector witnessed an inflow of huge investments from domestic and foreign manufacturers.

NISSAN
• In July 2023, Renault Nissan to invest US$ 1,68,762.86 (Rs. 1.4 crore) to upgrade infrastructure at eight schools near Chennai.

1 In February 2023, Nissan and Renault plan to invest US$ 600 million in India over the next 3-5 years to expand their market
share in passenger cars and electric vehicles.
• In July 2021, Nissan initiated a feasibility study to manufacture electric vehicles in India. If the study is positive when it is
concluded in a year, Nissan may end up producing EVs in India for local sales and exports.

Maruti Suzuki India (MSI)


• In May 2023, Maruti Suzuki India plans to invest over US$ 5.5 billion to double capacity by 2030.
2 • In November 2022, Maruti Suzuki India announced plans to spend nearly Rs. 7,000 crore (US$ 865.12 million) on a number of
projects this year, including the building of its new facility in Haryana and the introduction of new models.

Tata Motors
• In June 2023, Tata Motors will invest US$ 2 billion towards developing new products and platforms over the next four years.
• Tata Group Chairman, Mr. N Chandrasekaran said that "EV contribution in our portfolio is likely to increase to 25% in five years

3 •
and reach 50% by 2030, thus significantly increasing investments in this sector“ in January 2023.
In April 2022, Tata Motors announced plans to invest Rs. 24,000 crore (US$ 3.08 billion) in its passenger vehicle business over
the next five years.

Hyundai Motor India


• In May 2023, Hyundai Motor announced that it will invest over US$ 2.41 billion (Rs. 20,000 crore) in Tamil Nadu over the next

4 •
10 years to bolster its EV production.
Hyundai Motor India is ramping up capacity at its Sriperumbudur plant on the outskirts of Chennai and has invested Rs. 1,474
crore in FY22 to increase output to 8.5 lakh units and prepare itself for future growth.
• In March 2022, Hyundai plans US$ 79.2 billion investment through 2030, to focus majorly on EVs.
Source: Media Sources, Company Website

20
Investment scenario (2/3)

MAHINDRA & MAHINDRA



5
In July 2023, Mahindra & Mahindra is in advanced talks with British International Investment (BII) and some other global investors
to raise up to US$ 602.72 million (Rs. 5,000 crore) for its electric vehicles (EV) unit.
• In December 2022, Mahindra & Mahindra to invest Rs. 10,000 crore (US$ 1.2 billion) for an EV manufacturing plant in Pune.

SAIC
• In January 2023, MG Motor India to invest US$ 100 million to expand capacity, eyes 70% growth in 2023.

6 •


In March 2022, MG Motors, owned by China's SAIC Motor Corp, announced plans to raise US$ 350-500 million in private
equity in India to fund its future needs, including EV expansion.
As of February 2021, Chinese state-owned auto major SAIC Motor has invested almost US$ 400 million out of the US$ 650
million that it had committed to India. SAIC Motor sells its cars in India under its British subsidiary MG Motors.

Mercedes-Benz
• In January 2023, Global chief executive officer (CEO) Mr. Ola Kallenius said that India was Mercedes-Benz’s fastest-growing
7 •
market worldwide in 2022 and plans on investing more.
In January 2021, Mercedes received a cash infusion of Rs. 1,750 crore (US$ 232.36 million) from its parent company Daimler AG to
expand sales operations and product range.

Skoda Auto
• In August 2022, Volkswagen Group's Indian subsidiary, Skoda Auto Volkswagen India, has begun a feasibility study for its

8 •
next phase of investment in India after rolling out its India 2.0 strategic plan
In November 2021, Skoda Auto announced plans to locally manufacture electric cars in India. However, the firm may bring its
first EV, the Enyaq, through the CBU route, before committing to local manufacturing.

Source: Media Sources, Company Website

21
Investment scenario (3/3)

FIAT CHRYSLER AUTOMOBILES



9 In January 2021, Fiat Chrysler Automobiles (FCA) announced an investment of US$ 250 million in India to expand its local
product line-up over the next two years.

Hero MotoCorp
• In June 2023, Hero MotoCorp to invest up to US$ 180.81 million (Rs. 1,500 crore) for developing premium bikes and EVs in

10 •
India.
In September 2022, Hero MotoCorp announced an investment of US$ 60 million in California-based Zero Motorcycles to
collaborate on the development of electric motorcycles.

TVS Motor
• In July 2022, TVS Motor lines up fresh investments of Rs. 1,000 crore (US$ 121 million) in EV push.

11 •


In November 2021, TVS Motor collaborated with Bahwan International Group to strengthen its presence in Iraq. As part of the
deal, ARATA International FZC, a subsidiary of Bahwan International Group (BIG), will be the new distributor of TVS in Iraq.
In November 2021, TVS Motor signed an MoU with the Tamil Nadu Government to invest Rs. 1,200 crore (US$ 159.33
million) to develop new EV technologies and expand their manufacturing capacity.

Kinetic Green
• In June 2023, Kinetic Green Energy and Power Solutions are planning to raise up to US$ 100 million by selling a 10-15% stake in

12 •
the company to investors.
In September 2022, Kinetic Engineering Limited (KEL) invested in Ahmednagar to set up a dedicated production line with an
initial capacity of 5,000 sets per month.

Source: Media Sources, Company Website

22
Opportunities

3 India is fast emerging as


1 Opportunities for a global R&D hub
creating sizeable ▪ Strong support from the Government;
setting up of NATRIP centres.
market segments
through innovations 1 ▪ Private players such as Hyundai and
Maruti Suzuki are keen to set up an R&D
base in India.
▪ Mahindra & Mahindra (M&M) is ▪ In January 2021, EV manufacturer Tesla
planning to implement innovative set up an R&D centre in Bengaluru and
digital technology in the automobile registered its subsidiary as Tesla India
business. Motors and Energy Private Limited.
▪ Hyundai is planning to enter the hybrid ▪ India accounts for 40% of global
vehicles segment to explore alternative
fuel technology and
government incentives.
to avail 2 3 engineering and R&D spending of US$
31 billion. The automobile sector
accounts for 8% of the country's R&D
▪ In 2022, Tata Motors filed for 125 spending.
patents in India, the highest in its
history.

2 Small car manufacturing hub


▪ Nissan and Toyota announced plans to make India their global hub for small cars.
▪ With Maruti Suzuki and Hyundai leading, the Indian passenger vehicle market is
dominated by small cars.
▪ Strong export potential in ultra-low-cost cars segment (to developing & emerging
markets).
Source: Media Sources, Company Website

23
Key Industry Contacts

24
Key Industry Contacts

Agency Contact Information

Block 'J' Mahapalika Marg, Mumbai-400 001


Society of Indian Automobile Tele fax: 91-22 22621612/2265 9715
Manufacturers (SIAM) E-mail: [email protected]
Website: www.cgsiindia.org

111/112, Ascot Centre, Next to Hotel Le Royal Meridien,


Sahar Road, Sahar, Andheri (E), Mumbai-400099.
Automotive Research Association of India Tel: 91-22-28269527—28
(ARAI) Fax: 91-22-28269536
E-mail: [email protected]
Website: www.rai.net.in
3/242, Rajendra Gardens, Vettuvankeni, Chennai,
Tamil Nadu-600 041
Federation of Indian Automobile Tel: 91-44-2449 4576/4578
Associations Fax: 91-44-2449 4577
E-mail: [email protected]
Website: http://caiindia.org/

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Appendix

26
Glossary

▪ CAGR: Compound Annual Growth Rate

▪ Capex: Capital Expenditure

▪ CENVAT: Central Value Added Tax

▪ EHTP: Electronic Hardware Technology Park

▪ EPCG: Export Promotion Capital Goods Scheme

▪ FDI: Foreign Direct Investment

▪ FY: Indian Financial Year (April to March); So, FY10 implies April 2009 to March 2010

▪ LCD: Liquid Crystal Display

▪ R&D: Research and Development

▪ US$ : US Dollar

▪ Wherever applicable, numbers have been rounded off to the nearest whole number

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Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 73.20 2021 73.93
2021-22 74.42 2022 79.82
2022-23 78.60 2023* 83.40

Note: *- Until November 2023


Source: Foreign Exchange Dealers’ Association of India

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