RESEARCH

CENSUS 2011- AUTO SECTOR UPDATE

Census 2011 - An Insight Into Automobile Ownership
Analysing the data on the mode of transportation under the recently conducted Census 2011 threw up interesting facts related to automobile ownership in the country. Some of the salient points are summarised below. Bicycle penetration stagnant: The penetration of bicycles as a mode of transport has been stagnant over the last decade. On a pan India basis, household penetration for bicycle inched up marginally from 43.7% to 44.8%. In urban India the penetration for bicycle actually declined from 46.0% to 41.9%. Among the larger states Uttar Pradesh and Punjab have a penetration level of 60% plus. Two Wheeler growth driven by Rural India: Household penetration of two wheelers on an all India basis increased from 11.7% to 21.0% over the decade 2001-11. However, there is a stark difference between the growth recorded in rural India as compared to urban. While two wheeler household penetration in rural India more than doubled to 14.3%, the growth in urban India was more sedate growing from 24.7% to 35.2%. Growth in rural India has been more or less uniform with above average growth has been recorded in the North Eastern states and Bihar. Household penetration for passenger vehicles almost doubles: Contrary to the increase in penetration of two wheeler, the growth in passenger vehicles (PVs) is uniform across rural and urban India. On a pan Indian basis four wheeler penetration jumped from 2.5% to 4.7% over 2001-11. In the urban India household penetration for PVs stood at 9.7% while in the rural region it was at a mere 2.3%. Among the larger states Rajasthan, Gujarat, Karnataka and Maharashtra have shown a high penetration level for PVs. Ownership of multiple vehicles estimated to account for 10% of volumes: Considering the household penetration level of 4.7% on an all India basis for passenger vehicles, we derive a vehicle population of 11.6mn units. However, as per the industry data available 13.4mn vehicles have been sold over the ten year period of 2001-2011.A portion of the 13% difference could be explained by ownership of multiple PVs in a household. PINC Views: The data available under the Census 2011 reaffirms our view on the automotive demand in the country. The demand for two wheelers would continue to be driven by the rural India as penetration levels continue to remain low at 14.3. For passenger vehicles there would be an equal demand pull from both rural and urban India as penetration levels are low in both the regions. The geographical demand is expected to change over the forthcoming decade. The large eastern states namely Bihar, West Bengal, Odisha and Andhra Pradesh could be the drivers of growth over 2011-21 as prosperity percolates to these regions. Also considering that on a pan India basis 80% of the households still do not own a two wheeler and 40% of the population have no mode of transport, saturation in demand for two wheelers is still some years away.

Sector View: Neutral

15 March 2012

Vineet Hetamasaria, CFA +91-22-6618 6388 vineet.hetamasaria@pinc.co.in Nikhil Deshpande +91-22-6618 6339 nikhil.deshpande@pinc.co.in Tasmai Merchant tasmai.merchant@pinc.co.in +91-22-6618 6377

Bicycle - Household Penetration

2001 60.0 45.0 30.0 15.0 0.0 Rural

2011

SECTOR UPDATE

Urban

Total

Two Wheeler - Hosehold Penetration

2001 40.0 30.0 20.0 10.0 0.0 Rural

2011

Urban

Total

Passenger Vehicle - Household Penetration

2001 12.0 9.0 6.0 3.0 0.0 Rural

2011

Urban

Total

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RESEARCH

2-Wheeler Penetration - Top and Bottom Five States Bihar 8.1 West Bengal Assam Jammu & Kashmir Odisha India Tamil Nadu Haryana Gujarat NCR Punjab
Source: Census 2011

PVs Penetration - Top and Bottom Five States Bihar 1.7 Odisha West Bengal Chhattisgarh Andhra Pradesh India Himachal Pradesh Kerala Haryana Punjab NCR
Source: Census 2011

8.5 10.2 12.9 14.5 21.0 32.3 33.3 34.1 38.9 47.5

1.8 2.2 2.3 2.7 4.7 8.3 10.2 10.5 13.1 20.7

Top Ten Most Populous States - Two Wheeler Penetration

40.0 30.0 20.0 10.0 0.0 Bihar West Bengal Andhra Pradesh
Source: Census 2011

Madhy a Pradesh

Uttar Pradesh

India

Rajasthan

Maharashtra

Karnataka

Tamil Nadu

Gujarat

Top Ten Most Populous States - Passenger Vehicle Penetration

8.0

6.0

4.0

2.0

0.0 Bihar West Bengal Andhra Pradesh

Source: Census 2011

Madhy a Pradesh

Uttar Pradesh

Tamil Nadu

India

Rajasthan

Maharashtra

Gujarat

Karnataka

vineet.hetamasaria@pinc.co.in

nikhil.deshpande@pinc.co.in

RESEARCH

Statewise Two Wheeler Penetration

Source: Census 2011

vineet.hetamasaria@pinc.co.in

nikhil.deshpande@pinc.co.in

RESEARCH

Statewise Passenger Vehicle Penetration

Source: Census 2011

vineet.hetamasaria@pinc.co.in

nikhil.deshpande@pinc.co.in

RESEARCH

T E A M
EQUITY DESK
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RESEARCH
Vineet Hetamasaria, CFA Nikhil Deshpande Tasmai Merchant Vinod Nair Ankit Babel Hitul Gutka Subramaniam Yadav Madhura Joshi Satish Mishra Urvashi Biyani Naveen Trivedi Rohit Kumar Anand Niraj Garhyan Namrata Sharma Sakshee Chhabra Bikash Bhalotia Harleen Babber Dipti Vijaywargi Sushant Dalmia, CFA Poonam Sanghavi Suman Memani Abhishek Kumar C Krishnamurthy
Head of Research, Auto, Cement Auto, Auto Ancillary, Cement Auto, Auto Ancillary, Cement Construction, Power, Capital Goods Capital Goods, Engineering Power Construction Power Fertiliser, Oil & Gas Fertiliser, Oil & Gas FMCG IT Services IT Services Media Media Metals, Mining Metals, Mining Metals, Mining Pharma Pharma Real Estate, Mid caps Real Estate, Mid caps Technical Analyst

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6388 6339 6377 6379 6551 6410 6371 6395 6488 6334 6384 6372 6382 6412 6516 6387 6389 6393 6462 6709 6479 6398 6747

SALES
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Equities Equities Equities Derivatives Derivatives

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6486 6380 6342 6349 6347

DEALING
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COMPLIANCE
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Rating Objective
Large Caps Rating M.Cap > USD1bn Mid Caps M.Cap <= USD1bn

Return % BUY Accumulate Reduce Sell More than 15 5 to 15 (-)5 to +5 Below (-)5 More than 20 10 to 20 0 to 10 Less than 0

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