Automotive and Transport Sector in India Monthly Update December 2012
Top Story Import tariff on auto components from Asean to decline by 50% Import tariff on auto components imported from Asean will be reduced to half from Jan 2013. Tariff reduction will be applicable for major auto components such as brakes, gears, airbags, fuel tanks, suspension system, steering systems and seat belts. Tariff rate on engines (250‐1000 cc) will be lowered to 10% from existing 12%, while tariff rate on suspension system, steering systems, gear box and airbags will witness a sharp decline to 5% from current 10%. Further, import tariff is expected to be completely waived off following the implementation of the Indo‐Asean free trade agreement (FTA) from Dec 2013. Cheaper auto components from Asean and China have been favorable for the Indian car makers. Imports account for more than 30% of the overall domestic auto component market. Auto makers such as Toyota, Honda, Suzuki, Ford and Nissan are expected to benefit from the lower tariff rate. Thailand is the largest exporter of engines accounting for nearly 32% of the overall engines imported by India, especially in the diesel segment. Toyota Kirloskar Motors and Ford India are the major importers from Thailand. News Update
General
Fiat to roll out nine new models within 3 to 4 years Fiat has plans of launching nine new models over the next 3 to 4 years in India. This will include the introduction of the famous Jeep brand in the country. It plans to import Jeep Wrangler and Cherokee by the end of 2013. Later, it will localize the production of the Jeep vehicles at its Ranjangaon plant near Pune by 2016. Company is also building a compact SUV which is scheduled to be ready by 2014. Updating its existing portfolio includes, refreshing the Linea sedan and the Punto compact and developing a new generation of the Linea. Besides this, company plans to launch a racing car brand Abarth in India in 2013. Fiat is adopting a three step strategy to revive its sales in India, which includes rolling out of new cars, expansion of dealer network and focusing on marketing initiatives to create brand awareness in the domestic market. Company has plans of setting up 120 independent showrooms with an initial investment of INR 500 mn, spreading across 80% of the overall market by the end of next year. Automotive and Transport– Monthly Update
Bosch to enhance product offering in India Bosch has plans of improving its position as part, equipment and service providers to complete solution providers in the Indian automobile service space, after the acquisition of US based service equipment manufacturer, SPX Service Solutions for INR 62.26 bn. Bosch will be able to provide a better product and service portfolio for the automotive aftermarket division, including technical information and services such as repair manual generation, spare part manuals and labour time study for workshops. TVS plans to establish '3S' facilities in semiurban, rural areas TVS and Sons has plans of setting up '3S' (sales, service and spares) facilities in semi‐ urban and rural areas. Company is the authorized retailer for medium and commercial vehicles of Hinduja Group company, Ashok Leyland in Tamil Nadu, Kerala, Karnataka, Madhya Pradesh, Uttar Pradesh and Uttarakhand. Company has two 3S facilities of Ashok Leyland in Poonamallee and Madhavaram in Chennai at present. The third facility has been set up in Oragadam, spreading across 73,000 sq. ft. Ashok Leyland has overall 27 facilities in Tamil Nadu and 63 centres across India. Tata decides not to produce Jaguar and Land Rover (JLR) in India Tata Group does not want to manufacture Jaguar and Land Rover (JLR) in India. Currently, they are being assembled in the country. However, presence of taxes has made the assembling process more costly than importing these vehicles. Lack of manufacturing scale is leading to only 1000 Jaguars being sold per annum. Company needs a minimum sale of four to five times than the present situation to rationalize the huge investment it requires for starting the production of these cars. Tata is setting up a manufacturing plant in China and has plans of exporting these cars globally. Besides, company has also received an invitation from Saudi Arabia. Tata decides not to produce Jaguar and Land Rover (JLR) in India Tata Group does not want to manufacture Jaguar and Land Rover (JLR) in India. Currently, they are being assembled in the country. However, presence of taxes has made the assembling process more costly than importing these vehicles. Lack of manufacturing scale is leading to only 1000 Jaguars being sold per annum. Company needs a minimum sale of four to five times than the present situation to rationalize the huge investment it requires for starting the production of these cars. Tata is setting up a manufacturing plant in China and has plans of exporting these cars globally. Besides, company has also received an invitation from Saudi Arabia.
Automotive and Transport– Monthly Update
News Update Expansion Plans
TVS plans to increase market share by 2.5% TVS Motor’s market share in the motorcycle segment is expected to increase by 2.5% to 9.5% with the advent of its deluxe Phoneix 125 cc bike. In India, company holds a market share of 7% in the motorcycle segment at present. The new bike is expected to record monthly sales of 20,000 units. The total market size of motorcycles is around 0.85 mn units per month, experiencing a flat growth during this year. Out of which the 125 cc segment amounts to nearly 0.16 mn units per month. TVS is likely to have an 11‐12% market share in the 125 cc segment. Maruti plans to set up assembly plant in Africa Maruti Suzuki India has plans of establishing its first international car assembling facility in Africa owing to declining exports. Europe was the highest importer, accounting for 70% of Maruti’s exports three years back. However, Europe now contributes only 30% because of the prevailing debt crisis. Therefore, Maruti is exploring fresh and emerging markets, such as Colombia and the Dominican Republic, for strengthening sales. Assembly plant in such regions, benefit from tax advantages along with consistent government pressure to assemble models locally. Company has plans of selling basic cars at a low prices resulting in higher sales volume in Africa. Volvo opens first dealership in Gujarat Volvo has opened its dealership in Gujarat. This is its first dealership in the state. Company has plans of selling more than 150 units in 2013. ‘Autobots’ has got the dealership and aims at selling ~250 units despite the slow growth in the industry. There will be four luxury car models available, including a 7‐seater SUV Volvo SC90, a compact luxury SUV XC60, a sedan S80 and a sporty sedan S60. These are priced (on road) around INR 5.5 mn, INR 4.7 mn, INR 4.4 mn and INR 3.4 mn respectively. Industry Expert Speak Mahindra has relied on JVs and partnerships – Anand Mahindra, Chairman and MD, Mahindra & Mahindra “I don't look at acquisitions or joint ventures as what I must do this year. Strategy is paramount. JV's and acquisitions are a way of enabling them. To me, a JV is not an end in itself. The ventures, he says, helped both partners equally and therefore in most cases it has been a "win‐win" strategy. ” Automotive and Transport– Monthly Update
BMW plans to sell 300 units of Mini in India – Philipp von Sahr, President, BMW Group India “This year (2012) we make the brand known. Till November, we sold 280 Mini cars and we expect to sell 300 cars for the whole year (January‐December). The economic situation is not as nice as it should be. We also expect in 2013 it will be much better. We expect certain volume growth especially for Mini because of additional models and additional dealerships.” Expected car price hike in Jan 2013 – Mayank Pareek , Chief Operating Officer (Marketing & Sales), Maruti Suzuki India “There will be a hike in the prices of our products. Quantum will vary depending on models, but it can be up to Rs 20,000.”
Transactions (Oct – Dec 2012)
Buyer
Target
Size (INR mn)
% stake
Deal Status
Type of Transaction
18th Dec 2012
Mahindra & Mahindra
Mahindra Navistar Automotives & Mahindra Navistar Engines
1,750
‐
Pending
M&A
17th Dec 2012
Nabtesco Automotive Corporation
Uno Minda
373
49%
Completed
M&A
18th Nov 2012
Indsur Group
Nevron Eurotherm Insulation
‐
‐
Completed
M&A
29th Oct 2012
Anand
Mando Steering Systems India
‐
‐
Completed
M&A
11th Oct 2012
Apollo Tyres
Cooper Tire & Rubber Company
31,500‐ 40,400
‐
Pending
M&A
Date
Automotive and Transport– Monthly Update
Annual Financial Results – Revenue (INR mn) Companies
FY ‘09
FY ‘10
FY ‘11
FY ‘12
Apollo Tyres Limited
49,945.4
81,316.1
88,743.5
121,532.9
Balkrishna Industries Limited
13,998.6
15,637.3
21,920.9
N.A.
Ceat Limited
23,870.1
28,517.8
36,037.5
N.A.
Electrotherm India Limited
16,827.8
20,073.5
24,015.6
N.A.
Falcon Tyres Limited*
6,048.6
8,222.6
9,797.5
N.A.
Indag Rubber Limited
762.789
1,117.105
1,499.396
2,161.262
JK Tyres Limited
39,862.8
45,846.8
59,786.0
69,127.2
26.048
32.05
N.A.
N.A.
Kesoram Industries Limited
39,305.6
47,615.3
54,223.6
59,033.8
Mahindra & Mahindra Limited
269,197.6
316,879.2
370,254.4
582,414.0
862.47
4,036.718
660.889
N.A.
MRF Limited
56,924.9
74,750.8
97,645.5
N.A.
Tata Motors Limited
708,809.5
925,192.5
1,231,333.0
1,648,545.2
TVS Srichakra Limited
5,773.5
7,024.7
10,921.6
N.A.
Vamshi Rubber Limited
9.926
19.507
22.505
N.A.
Kabirdass Motor Company Limited
Modi Rubber Limited*
* Change in Financial Year Ending
Automotive and Transport– Monthly Update
Annual Financial Results – Income (INR mn) Companies
FY ‘09
FY ‘10
FY ‘11
FY ‘12
Apollo Tyres Limited
1,391.5
6,533.5
4,401.6
4,099.0
Balkrishna Industries Limited
744.0
2,190.4
1,946.3
N.A.
Ceat Limited
‐161.1
1,624.8
264.7
N.A.
Electrotherm India Limited
527.9
533.2
89.7
N.A.
Falcon Tyres Limited*
299.7
453.3
154.6
N.A.
Indag Rubber Limited
76.211
115.736
107.525
208.713
JK Tyres Limited
‐1,492.6
2,235.2
659.1
‐319.9
0.974
‐6.811
N.A.
N.A.
Kesoram Industries Limited
3,787.3
2,373.4
‐2,102.1
‐3,797.4
Mahindra & Mahindra Limited
14,054.1
24,785.6
30,797.3
31,266.6
Modi Rubber Limited*
554.057
‐212.616
364.59
N.A.
MRF Limited
2,507.8
3,575.0
6,187.7
N.A.
‐25,052.5
25,710.6
92,736.2
135,165.0
TVS Srichakra Limited
89.7
298.2
391.4
N.A.
Vamshi Rubber Limited
492.242
548.011
660.329
N.A.
Kabirdass Motor Company Limited
Tata Motors Limited
* Change in Financial Year Ending
Automotive and Transport– Monthly Update
Quarterly Financial Results – Revenue (INR mn) Companies
OctDec 2011
JanMar 2012
AprJun 2012
JulSep 2012
Apollo Tyres Limited
32,282.4
32,314.0
31,647.0
33,748.3
Balkrishna Industries Limited
7,587.7
N.A,
N.A.
N.A.
Ceat Limited
10,654.4
N.A.
12,249.7
12,130.26
Electrotherm India Limited
3,189.1
N.A.
N.A.
N.A.
Falcon Tyres Limited
N.A.
N.A.
N.A.
N.A.
Indag Rubber Limited
574.5
565.5
589.0
626.8
14,229.4
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Kesoram Industries Limited
15,529.8
15,669.3
15,041.1
14,161
Mahindra & Mahindra Limited
164,883.9
136,485.1
176,708.1
92,525.8
N.A.
N.A.
N.A.
N.A.
MRF Limited
28,754.9
N.A.
N.A.
N.A.
Tata Motors Limited
451,992.9
514,086.1
431,711.3
428,189
TVS Srichakra Limited
3,494.5
N.A.
N.A.
N.A.
Vamshi Rubber Limited
201
198.8
219.3
218.9
JK Tyres Limited Kabirdass Motor Company Limited
Modi Rubber Limited
Automotive and Transport– Monthly Update
Quarterly Financial Results – Income (INR mn) OctDec 2011
JanMar 2012
AprJun 2012
JulSep 2012
Apollo Tyres Limited
980.4
1,569.6
1,380.2
1,522
Balkrishna Industries Limited
728.8
N.A.
N.A.
N.A.
Ceat Limited
23.9
N.A.
290.1
38
‐1,323.9
N.A.
N.A.
N.A.
Falcon Tyres Limited
N.A.
N.A.
N.A.
N.A.
Indag Rubber Limited
53.1
65
66.5
58.5
‐213.1
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
‐2,756.4
2,288.3
‐959.6
‐540.3
8,318
9,505.6
10,263.6
9,780.9
N.A.
N.A.
N.A.
N.A.
MRF Limited
1,128.9
N.A.
N.A.
N.A.
Tata Motors Limited
34,055.5
62,340.0
22,449.1
20,747.3
TVS Srichakra Limited
66.4
N.A.
N.A.
N.A.
Vamshi Rubber Limited
0.350
5.348
2.136
4.767
Companies
Electrotherm India Limited
JK Tyres Limited Kabirdass Motor Company Limited Kesoram Industries Limited Mahindra & Mahindra Limited Modi Rubber Limited
Automotive and Transport– Monthly Update
Events Calendar SIAT Expo 2013 Date: 16th – 19th Jan 2013 Venue: Pune, Maharashtra, India Organizers: Automotive Research Association Of India Phone number: +91‐20‐30231111
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Automotive and Transport– Monthly Update