A STUDY ON GROWTH AND PERFORMANCE OF INDIAN AUTOMOBILE INDUSTRY IN CURRENT SCENARIO - ijrar
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
A STUDY ON GROWTH AND PERFORMANCE
OF INDIAN AUTOMOBILE INDUSTRY IN
CURRENT SCENARIO
Dr. N.MANICKKAVASAGAM, Head & PhD Research Supervisor in Commerce
Mrs.R.RADHIKA, Assistant professor of commerce, PhD Research Scholar in Commerce
Enathi Rajappa Arts and Science College, Pattukkottai,Thanjavur.
ABSTRACT
SIAM (society of Indian Automobile Manufacturers) has confirmed that Indian automakers are
producing vehicles at 60-65% of their production capacity on an average. Although the implementation of
the GST regime has had a negative impact on car exports, tax refunds worth Rs.2,000 crore will be provided
by the government to the companies in the near future. When the statistics of vehicle production is taken into
consideration, a total of more than 29 million units were produced between April 2017 and March 2018.
This includes commercial vehicles, passenger cars, two-wheelers, three-wheelers.. The growth in production
in the industry was 14.78% when compared to the same period the previous year. Industry experts are of the
opinion that FY18 was a landmark in the history of automobile sales in India. The volume of sales grew on
the back of the momentum of the previous year to reach double-digit figures. This has happened for the first
time since the financial year 2012. The growth can be largely attributed to the improvement in the rural
economy. This paper critically examines the growth and performance of Automobile Sector of India in order
to get clear picture about the industry and its contribution.
Key Words: Automobile Industry, vehicle production, Automobile Sales, Growth and Performance
INTRODUCTION
India is currently one of the largest markets in the world as far as automobile sales are concerned.
Car manufacturers raised a toast for the financial year 2017-18 as it turned out to be one of their best in
terms of sales. The industry registered double-digit growth between 1st April 2017 and 31st March 2018.
The year also marked India surpassing Germany as the fourth largest automobile market on a global scale to
stand right behind China, the US, and Japan. The automobile industry in India observed a sales growth of
9.2% during the last financial year, as total sales hit 4.02 million units. In comparison, Germany saw a sales
growth of 2.19%, selling 3.81 million units. These statistics are inclusive of commercial and passenger
vehicles that were sold between April 2017 and March 2018.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 207© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
TOTAL SALES STATISTICS OF INDIAN AUTOMOBILE SECTOR (in Units)
category 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Passenger
26,65,015 25,03,509 26,01,236 27,89,208 30,47,582 32,87,965
Vehicles
Commercial
7,93,211 6,32,851 6,14,948 6,85,704 7,14,082 8,56,453
Vehicles
Three
5,38,290 4,80,085 5,32,626 5,38,208 5,11,879 6,35,698
Wheelers
Two Wheelers 1,37,97,185 1,48,06,778 1,59,75,561 1,64,55,851 1,75,89,738 2,01,92,672
Grand Total 1,77,93,701 1,84,23,223 1,97,24,371 2,04,68,971 2,18,62,128 2,49,72,788
EXPORT STATISTICS OF INDIAN AUTOMOBILE SECTOR (in Units)
Category 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Passenger Vehicles 5,59,414 5,96,142 6,21,341 6,53,053 7,58,727 7,47,287
Commercial Vehicles 80,027 77,050 86,939 1,03,124 1,08,271 96,867
Three Wheelers 3,03,088 3,53,392 4,07,600 4,04,441 2,71,894 3,81,002
Two Wheelers 19,56,378 20,84,000 24,57,466 24,82,876 23,40,277 28,15,016
Grand Total 28,98,907 31,10,584 35,73,346 36,43,494 34,79,169 40,40,172
SIAM REPORT - 2018
The Society of Indian Automobile Manufacturers (SIAM) shared a report recently, showing domestic
sales and exports across all segments in the market recording a surge.
The passenger vehicle market observed growth of 7.89%, selling 3.28 million units during FY 2018.
The majority of the units sold were utility vehicles, the sales of which independently surged by 20.97%.
The sale of passenger cars and vans also recorded a growth of 3.33% and 5.78% respectively during the
same timeframe.
As far as commercial vehicles are concerned, the total sales saw a growth of 19.94% during the last
financial year. The segment of Medium & Heavy Commercial Vehicles (M&HCVs) grew by 12.48%
while the Light Commercial Vehicles (LCV) segment observed growth of 25.42%. The sale of three-
wheelers also grew by 24.19% between April 2017 and March 2018.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 208© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
Industry analysts are expecting to see the momentum of growth carry forward to the financial year
2018-19, across most of the segments. There may be moderation in growth of commercial vehicles (CVs)
sales though. The industry is currently subjected to a series of investments in research and product
development so that regulatory changes such as BS VI emission norms are implemented. Investments are
also being made for the implementation of the government’s vision of an all- electric fleet by the year 2030.
There are also reforms likely to come up in the safety standards of four-wheelers in the country.
Production Statistics:
According to SIAM data, car makers’ market share in the year 2017 in India is as follows:
Auto manufacturer Percentage of sales
Maruti Suzuki 49.6%
Hyundai Motor India 12.33%
Mahindra & Mahindra 7.5%
Tata Motors 5.91%
Honda Cars 5.53%
Toyota Kirloskar 4.32%
Renault India 3.48%
Others - including Skoda, GM
5.49%
India, FCA, Force Motors, Isuzu
The largest auto manufacturer in India, Maruti Suzuki, dominated the car sales in the country in the
calendar year 2017 with a 49.6% market share. The company has sold more than 1.60 million vehicles in
the country and it expects a growth of almost 15% along with exports.
The second-largest car maker in India, Hyundai Motor India has sold more than 5 lakh vehicles for the
second time in a row. The total sales for the auto manufacturer stood just above 5.27 lakh units. The
growing demand in the domestic and international markets has resulted in Hyundai’s Chennai plants
working at full capacity.
Mahindra and Tata Motors stood at third and fourth places as far as car sales for the year 2017 are
concerned. Mahindra sold more than 2.42 lakh units while Tata Motors sold 1.91 lakh vehicles in the
country. Mahindra only released facelifts and additional variants the last year. But Tata Motors followed
a more aggressive sales strategy, launching three new cars, the Tata Hexa, Tata Tigor, and Tata Nexon.
Both companies are also looking forward to supplying electric cars in the coming years.
Honda Cars India and Toyota Kirloskar had decent sales, despite the taxation policy changes that were
effective in 2017. Both companies supply hybrid cars to the automobile industry in India, and the extra
cess that was imposed on these vehicles had resulted in Toyota halting the production of the Camry
hybrid sedan.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 209© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
Renault India saw a drop in sales, selling only 1.12 lakh units last year. The last quarter of the calendar
year saw the launch of the Renault Captur, as the company looked to strengthen its position in the
crossover market.
The sales of Ford India grew after the introduction of the Ford Ecosport, and the company sold 87,578
units last year - an aggregate of 2.71% of the market share. The company has also improved its exports
from the country as is evident from its robust export figures in 2017.
Towards the last quarter of 2017, most of the auto manufacturers have increased prices of vehicles across
segments by 3-5%. This is due to the hike in input costs, including commodity prices. India is expected to
emerge as the third-largest market for automobiles by the year 2020, when it would be capable of selling up
to 5 million vehicles in a year.
MARKET SIZE
Domestic automobile production increased at 7.08 per cent CAGR between FY13-18 with 29.07
million vehicles manufactured in the country in FY18. During April-November 2018, automobile production
increased 12.53 per cent year-on-year to reach 21.95 million vehicle units. Overall domestic automobiles
sales increased at 7.01 per cent CAGR between FY13-18 with 24.97 million vehicles getting sold in FY18.
During April-November 2018, highest year-on-year growth in domestic sales among all the categories was
recorded in commercial vehicles at 31.49 per cent followed by 25.16 per cent year-on-year growth in the
sales of three-wheelers. Premium motorbike sales in India crossed one million units in FY18. . During
January-September 2018, BMW registered a growth of 11 per cent year-on-year in its sales in India at 7,915
units. Mercedes Benz ranked first in sales satisfaction in the luxury vehicles segment according to J D Power
2018 India sales satisfaction index (luxury). Sales of electric two-wheelers are estimated to have crossed
55,000 vehicles in 2017-18.
COMPARATIVE STATEMENT OF DOMESTIC SALES FOR FEBRUARY 2018
Company Feb 2018 Feb 2017 % change
Passenger Vehicles
Maruti Suzuki 136,648 120,599 13.3
Hyundai Motor India 44505 42327 5.1
M&M 22389 20717 8
Tata Motors 17771 12,272 45
TKM 11864 11543 2.78
Honda Cars India 11650 14249 -18.23
Ford India 9041 8338 8.43
Two-wheelers
Hero MotoCorp (incl exports) 629,597 524,766 20
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 210© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
HMSI 489591 370122 32
TVS Motor 280942 206247 36.2
Suzuki Motorcycle 46147 33641 37.2
Royal Enfield 71354 56737 26
Commercial Vehicles
Tata Motors 41222 30407 36
Ashok Leyland 18181 14067 29
VECV 6882 5603 22.8
M&M 20946 16383 28
SML-Isuzu 965 1145 -15.7
Maruti Suzuki 1252 136 820.5
Three-wheelers
TVS Motor 9731 5223 86.3
M&M 5138 3426 50
Two-wheelers grow in double-digits
Hero MotoCorp sold 629,597 units (524,766 units) of two-wheelers in February 2018, rising 20
percent over the corresponding month last year. This is the ninth month (out of 11 months) in this fiscal
(FY’18) so far when Hero Moto Corp has crossed 6-lakh units in monthly sales. This sales growth has been
driven by strong growth in scooters, in addition to the continued momentum across the range of its
motorcycle brands, claims the company. Honda Motorcycle & Scooter India (HMSI) is gunning for a sales
growth of 20 percent during FY18. In line with this vision, its domestic sales grew 32 percent during
February 2018 to 489591 units (370122 units). Though volumes of motorcycles were lower, its sales rose
faster at 37 percent to 164398 units (120170 units) while scooters that constitutes HMSIs major chunk of
the two-wheeler portfolio was up 30 percent at 325193 units (249952 units). Total sales climbed up 32
percent to 519735 units (393642 units) during the month. Hosur-based two-wheeler major TVS Motor
Company was up 37 percent to sales of 290,673 units in the month of February 2018 up from 211,470 units
in February 2017. Total two-wheelers grew 36.2 percent to 280,942 units (206,247 units). Domestic two-
wheeler sales rose 33.5 percent to 280,942 units (172,611 units). Suzuki Motorcycle India clocked 46147
units in domestic sales in February 2018 compared to 33641 units sold in February 2017 a rise of 37.2
percent. Royal Enfield posted domestic sales of 71354 units (56737 units) a step up of 26 percent with total
sales pegged at 73077 units (58439 units) up 25 percent during the month under review.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 211© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
Commercial Vehicles get a fillip from infrastructure development
Tata Motors’ commercial vehicles portfolio sold 41,222 units, up 36 percent compared to 30,407
units sold in February 2017. This rise was facilitated by infrastructure growth, fresh tenders in car carriers
and coal transportation. Further, increasing demand from the construction, logistics, e-commerce and FMCG
sectors gave a leg up to this market. M&HCV trucks recorded sales of 15,241 units, up 25 percent, over last
year. Overloading regulations and replacement buying pushed demand for higher tonnage trucks and tippers.
Ashok Leyland posted a double digit growth of 29 percent with sales of 18181 units (14067 units) in
February 2018. M&HCVs were up 21 percent with sales of 13726 units (11329 units) while LCVs
experienced a 63 percent growth at 4455 units (2738 units). VE Commercial Vehicles sold 6882 units (5603
units) in the month under review posting a step up of 22.8 percent. This includes 6789 units of the Eicher
brand and 93 units of the Volvo brand. However, Ropar-based SML Isuzu de-grew 15.7 percent during
February 2018 at 965 units against 1145 units sold in the same month last year. Mahindra & Mahindra sold
20,946 commercial vehicles (16383 units) with the segment up by 28 percent. Maruti Suzuki’s Super Carry
LCV sold 1252 units (136 units) up 820.5 percent on a low base. The carmaker has been expanding its
Commercial outlets with plans to add another 50-100 outlets in FY19 according to RS Kalsi senior executive
director-sales and marketing of Maruti Suzuki.
Three-wheelers on recovery path
Three-wheeler sales of TVS Motor Company grew by 86.3 percent to 9,731 units from 5,223 units in
February 2017.M&M sold 5138 units during the month under review up 50 percent from 3426 units
recorded in February 2017.
Investments
In order to keep up with the growing demand, several auto makers have started investing heavily in
various segments of the industry during the last few months. The industry has attracted Foreign Direct
Investment (FDI) worth US$ 19.29 billion during the period April 2000 to June 2018, according to data
released by Department of Industrial Policy and Promotion (DIPP). Some of the recent/planned investments
and developments in the automobile sector in India are as follows:
Ashok Leyland has planned a capital expenditure of Rs 1,000 crore (US$ 155.20 million) to launch
20-25 new models across various commercial vehicle categories in 2018-19.
Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to
invest US$ 310 million in India.
Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per
year, highest for any luxury car manufacturing in India.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 212© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
As of October 2018, Honda Motors Company is planning to set up its third factory in India for
launching hybrid and electric vehicles with the cost of Rs 9,200 crore (US$ 1.31 billion), its largest
investment in India so far.
Government Initiatives
The Government of India encourages foreign investment in the automobile sector and allows 100 per
cent FDI under the automatic route. Some of the recent initiatives taken by the Government of India are.
The government aims to develop India as a global manufacturing centre and an R&D hub. Under NAT Rip,
the Government of India is planning to set up R&D centers at a total cost of US$ 388.5 million to enable the
industry to be on par with global standards. The Ministry of Heavy Industries, Government of India has
shortlisted 11 cities in the country for introduction of electric vehicles (EVs) in their public transport systems
under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme.
The government will also set up incubation centre for start-ups working in electric vehicles space.
Achievements
Following are the achievements of the government in the past four years:
Number of vehicles supported under FAME scheme increased from 5,197 in June 2015 to 192,451 in
March 2018. During 2017-18, 47,912 two-wheelers, 2,202 three-wheelers, 185 four-wheelers and 10
light commercial vehicles were supported under FAME scheme.
Under National Automotive Testing And R&D Infrastructure Project (NATRIP), following testing
and research centre have been established in the country since 2015
1. International Centre for Automotive Technology (ICAT), Manesar.
2. National Institute for Automotive Inspection, Maintenance & Training (NIAIMT), Silchar.
3. National Automotive Testing Tracks (NATRAX), Indore
4. Automotive Research Association of India (ARAI), Pune
5. Global Automotive Research Centre (GARC), Chennai
SAMARTH Udyog – Industry 4.0 centre: ‘Demo cum experience’ centre are being set up in the
country for promoting smart and advanced manufacturing helping SMEs to implement Industry 4.0
(automation and data exchange in manufacturing technology).
Conclusion
The automobile industry is supported by various factors such as availability of skilled labour at low
cost, robust R&D centers and low cost steel production. The industry also provides great opportunities for
investment and direct and indirect employment to skilled and unskilled labour. Indian automotive industry
(including component manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion)
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 213© 2019 IJRAR February 2019, Volume 6, Issue 1 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)
by 2026. Several initiatives by the Government of India and the major automobile players in the Indian
market are expected to make India a leader in the two-wheeler and four wheeler market in the world by
2020.
References:
1. Media Reports
2. Press Releases
3. Department of Industrial Policy and Promotion (DIPP)
4. Automotive Component Manufacturers Association of India (ACMA)
5. Society of Indian Automobile Manufacturers (SIAM)
6. Union Budget 2015-16, 2016-17and 2017-18.
IJRAR19YP025 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 214You can also read
