IBEF印度汽车零部件产业分析11月英文20181132页1mb

Auto Components Industry Summary

Core Content

The Indian auto components industry has shown robust growth over the past decade, with a Compound Annual Growth Rate (CAGR) of 6.83% in turnover, reaching US$ 51.20 billion in 2017-18. Exports have also grown at a CAGR of 11.42%, reaching US$ 13.5 billion in FY18. The industry is expected to achieve US$ 100 billion in turnover by 2020 and US$ 200 billion by 2026, driven by both domestic and export demand. The industry contributes 2.3% to India's GDP and supports 3 million direct and indirect jobs in 2017-18.

India is poised to become the 4th largest automobile producer globally by 2020 and the 3rd largest auto components producer by 2025. The automotive industry is expected to grow to 8.7 million passenger vehicles per year by 2020, with most being compact cars. The industry is also set to benefit from the global shift towards electric vehicles (EVs), with the potential for a US$ 300 billion domestic EV battery market by 2030.

Main Advantages of India in the Auto Components Sector

Geographic Proximity

India is emerging as a global sourcing hub, especially for Middle East and European markets, due to its geographical closeness.

Cost Advantage

India offers a cost-effective manufacturing base, with costs 10-25% lower than Europe and Latin America. The country is also the 3rd largest steel producer globally, which supports this cost advantage.

Skilled Workforce

A large pool of skilled and semi-skilled workers is available, supported by a strong educational system.

Policy Support

• Automotive Mission Plan 2016-26 (AMP 2026): Targets a 4-fold growth in the automotive sector over the next decade.
• NATRiP (National Automotive Testing and R&D Infrastructure Project): Invested US$ 388.5 million to enable the industry to adopt global performance standards.
• FAME Scheme (Faster Adoption & Manufacturing of Electric Vehicles): Incentivizes electric and hybrid technologies.
• 100% FDI allowed under automatic route for auto components.

Recent Trends and Strategies

Global Sourcing Hub

• Major global OEMs (Original Equipment Manufacturers) are sourcing components from India.
• Tier-I suppliers are increasing procurement from Indian subsidiaries.
• India is becoming a key hub for engine components, especially for companies like Ford, Fiat, Suzuki, and General Motors.

Product Development and R&D

• Companies are investing heavily in R&D operations and laboratories to develop new technologies and improve quality.
• Faurecia has partnered with IISc (Indian Institute of Science) to develop AI, driver behavior algorithms, and air quality monitoring.
• JK Tyre has established a global technology centre in Mysore focusing on tyre performance and life prediction.

Inorganic Expansion

• Joint Ventures (JVs) and acquisitions are key strategies for growth:
  • Rico Auto Industries plans to sign a JV with HZ Manufacturing for automatic transmission.
  • Elgi Equipments acquired Pulford Air and Gas to expand its global footprint.
  • Motherson Sumi Systems acquired Reydel Automotive for US$ 201 million.

New Market Focus

• Companies are shifting focus to untapped markets such as the Northeast region.
• Varroc Engineering is targeting electric vehicle components like electronics, motors, and battery management systems.

Key Growth Drivers

Demand-Side Drivers

• Robust growth in the domestic automotive industry
• Increasing investment in road infrastructure
• Growing working population and middle-class income

Supply-Side Drivers

• Competitive advantages in manufacturing and outsourcing hub status
• Focus on R&D and technological innovation

Opportunities

Market Potential

• The domestic market is expected to account for 71% of total sales by 2021, with a market size of US$ 115 billion.
• Exports will account for 26% of the market by 2021.
• Engine & Exhaust and Body & Structural components are expected to make up 50% of the potential in both domestic and export markets.

Engineering Product Opportunities

• Engine & parts: Introduction of turbochargers and common rail systems.
• Transmission & steering: Clutches and gears will benefit from rising traffic density.
• Suspension & braking: High replacement demand with diversified customer base.
• Electrical components: Growing demand for electric start mechanisms in the 2-wheeler segment.
• Metal parts: Rising demand for body & chassis, pressure die castings, and sheet metal parts.

Key Industry Associations

• Automotive Component Manufacturers Association of India (ACMA): Provides support and data for the industry.
• India Brand Equity Foundation (IBEF): Offers market intelligence and policy insights.

Useful Information

Glossary

• ACMA: Automotive Component Manufacturers Association of India
• CAGR: Compound Annual Growth Rate
• FDI: Foreign Direct Investment
• FY: Indian Financial Year (April to March)
• GOI: Government of India
• INR: Indian Rupee
• OEM: Original Equipment Manufacturer
• NATRiP: National Automotive Testing and R&D Infrastructure Project
• SEZ: Special Economic Zone
• US$: US Dollar

Exchange Rates

• Fiscal Year Exchange Rates (INR per US$):

  • 2004–05: 44.95
  • 2005–06: 44.28
  • 2006–07: 45.29
  • 2007–08: 40.24
  • 2008–09: 45.91
  • 2009–10: 47.42
  • 2010–11: 45.58
  • 2011–12: 47.95
  • 2012–13: 54.45
  • 2013–14: 60.50
  • 2014–15: 61.15
  • 2015–16: 65.46
  • 2016–17: 67.09
  • 2017–18: 64.45
  • Q1 2018–19: 67.04
  • Q2 2018–19: 70.18

• Calendar Year Exchange Rates (INR per US$):

  • 2005: 44.11
  • 2006: 45.33
  • 2007: 41.29
  • 2008: 43.42
  • 2009: 48.35
  • 2010: 45.74
  • 2011: 46.67
  • 2012: 53.49
  • 2013: 58.63
  • 2014: 61.03
  • 2015: 64.15
  • 2016: 67.21
  • 2017: 65.12

Key Players and Investments

• CEAT Ltd.: Plans to invest US$ 413.50 million to expand tire production.
• IMI Precision Engineering: Inaugurated a second largest facility in the Asia-Pacific region.
• Rico Auto Industries: Plans to invest Rs 400 crore (US$ 57 million) over the next three years.
• ASK Automotive: Signed a US$ 15.6 million JV with Fras-le of Brazil for brake pads and linings.
• Faurecia Interior Systems: Started construction of a Rs 50 crore (US$ 7.46 million) plant in Gujarat.
• Hitachi Automotive Systems: Set up a technical centre in Delhi and plans to increase production in India.
• Amara Raja Batteries: Approved a Rs 700 crore (US$ 99.74 million) battery plant with a capacity of 10.8 million units.
• Tata Auto Component Systems: Setting up 5 plants in Sanand, Gujarat and capacity addition in Maharashtra.
• Lucas TVS: Planning to introduce traction motors by 2019 for electric rickshaws and three-wheelers.
• TVS Group: Acquired Universal Components UK Ltd. for US$ 19.2 million and signed a cooperation agreement with BMW Motorrad.

Disclaimer

This document was prepared by Aranca in consultation with IBEF (India Brand Equity Foundation). No part of this presentation may be reproduced, modified, or communicated to any third party without written approval from IBEF.