CURENT STATUS OF INDIAN AUTOMOTIVE INDUSTRY

1) The industry encompasses commercial vehicles, multi-utility vehicles, passenger

cars, two wheelers, three wheelers, tractors and auto components. There are in
place 15 manufacturers of cars and multi utility vehicles, 9 of commercial vehicles,
14 of Two/Three Wheelers and 10 of Tractors besides 5 of engines.
2) India manufactures about 38,00,000 2-wheelers, 5,70,000 passenger cars, 1,25,000
Multi Utility Vehicles, 1,70,000 Commercial Vehicles and 2,60,000 tractors annually.
3) India ranks second in the production of two wheelers and fifth in commercial
vehicles.
4) Indias automotive component industry manufactures the entire range of parts
required by the domestic automobile industry. Auto component manufacturers
supply to two kinds of buyers original equipment manufacturers (OEM) and the
replacement market.
5) In past two years the automobile industry has slowed however the component
industry maintained a low but positive growth rate mainly due to its export
performance. Over the years, the component industry has maintained a 10% - 12%
share of exports in the total production.
6) Auto component industry supports industries like automobiles, machine tools, steel,
aluminum, rubber, plastics, electrical, electronics, forgings and machining.
7) India has also emerged as an outsourcing hub for auto parts for international
companies such as Ford, General Motors, Daimler Chrysler, Fiat, Volkswagon, and
Toyota.

Growth Drivers for Automobile Sector:
Growth of newer markets of Automobile like Africa, Middle East has helped Indian Automobile
companies increase in exports and establish as compact car hub
Healthy domestic demand of Passenger, two wheeler as well as commercial vehicle due to
increase in income levels, Growth in GDP and Improvement in Infrastructure(Roads)
Increase of Auto Ancillaries industry because of healthy domestic demands and increasing
export demands
Cheap, affordable and easy availability of Labour has seen companies setting their sourcing
hubs in India to source components from Auto Ancillary companies which are very labour
intensive in Nature
Improving per capita income of people and increased people with salaries above threshold for
consumer durables coupled with increased affordability of vehicles
Technological advances through improved R&D facilities to provide cheap fuel efficient cars
Better Vehicle financing schemes available for car loans
Growth Drivers for Passenger vehicles
Automobile OEMs Future Projections
Component Manufacturer Domestic Projections Comp. Mfg. Export Projections
Two companies for investment :
BOSCH
Auto Component manufacturer
The Auto Component sector has very positive outlook with domestic Sales catching up and
accelerated export growth
The company has the highest Market Cap and very strong fundamentals and is bound to
capture the majority pie of the Auto Component growth story
TATA Motors
Biggest Automobile player in the market
Highest investment plans of Rs 8000 cr
New models to be launched and a revamping of existing models on cars
BOSCH 3 Year Stock Price Chart TATA Motors 3 year Stock Price Chart