BMI's Executive Summary

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India's new vehicle sales continue to grow in FY2007/08, but at a slower rate than previous years. BMI has revised downwards its sales forecast for the year on the back of first-half sales, although optimism for continued growth over the five-year forecast period still exists. Passenger car sales for the month of September rose 11.6% to 105,822 units, while sales for the six months from April to September were up 13% to 569,621 units. Commercial vehicle sales increased by a little less than 1% to 42,770 units in September and by 2.92% over the six months to 212,181 units.

BMI now projects total sales of 1.775mn units in FY2007/08, although we expect sales to recover over the next five years if interest rates can be lowered. BMI also believes that the commercial vehicle segment could play a pivotal role in rescuing the slide, based on a number of new joint ventures announced in recent months. Volvo Bus Body Technologies India, a 70:30 joint venture between Sweden's Volvo and Jaico Automobile, has set up a new production plant to produce completely built buses for export as well as domestic sale. The bus segment has also seen a tie-up between domestic manufacturer Tata Motors and Brazil's Marco Polo to build the world's largest integrated bus plant in India.

Despite the slowdown in sales growth, India still ranks joint second in BMI's Business Environment Ranking for the automotive industry in the Asia Pacific region. Vehicle ownership is low, creating potential for further sales growth, although with so many manufacturers already establishing production operations and the industry running at a high level of capacity utilisation, the opportunities for entering the market as a producer could be limited. In the meantime, India's production of CBUs is expected to rise by 63% over the forecast period, which means India's output growth is above average for the region and the market scores highly as a result.

Maruti Suzuki, which led the market in FY2006/07, posted growth of 18% over the first six moths of FY2007/08, largely thanks to heavy discounts and the launch of two new models – the Swift compact and the SX4 sedan. In this period, however, Maruti was pipped to the lead by US giant General Motors (GM), which more than doubled its Indian sales on the back of its two new Chevrolet compact models, the Spark and the Aveo U-VA. GM's sales for the six months to September 2007 rose by 140% y-o-y to 20,695 units. Data from the Society of Indian Automobile Manufacturers (SIAM) also showed that manufacturers prominent in the larger sedan segment, such as Honda and Ford, saw sales decline.

Contents

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Chapter 1 – SWOT Analysis

India Auto Industry SWOT

India Economic SWOT

India Business Environment SWOT

Chapter 2 – Regional Market Overview

Table: Asia Pacific Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Asia Pacific Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Ranking

Table: Asia/Pacific Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production And Sales

Table: India Autos Sector – Historical Data & Forecasts (CBUs, unless otherwise stated)

Trade

Table: India Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: India Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: GDP And Population

Country Snapshot: India Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages per year

Chapter 6 – Special Focus: Commercial Vehicles

Country Landscape

Key Players

Key Investment

Table: India Commercial Vehicle Investment

Forecast

Chapter 7 – Competitive Landscape

Market Overview

Manufacturers – Passenger Cars

Tables: India Domestic Passenger Vehicle Sales April 2005 – February 2006

Segment Developments

Chapter 8 – Company Monitor

General Motors Asia Pacific Regional Overview

Table: GM Asia Vehicle Production 2005 (CBUs)

Table: GM Asia Vehicle Sales 2005 (CBUs)

Company Profiles

Maruti Suzuki

Tata Motors

Hyundai

Mahindra & Mahindra

Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave. per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Asian Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: