INTERNATIONAL

INSTITUTES AND TRADE

IMPLICATIONS

PRESENTION BY:
ASHID S. ARYAN
URSILA NASIR
ARINDOM BHARALI
PRIYA PRAMOD SINGH
NEHA HANDA
AUTOMOBIL
E INDUSTRY
IN INDIA
INTRODUCTION
 Ninth largest industry in the world
 India is Asia's fourth largest exporter of
automobiles
 17% annual growth in automobile production
 30% annual growth in exports of automotive
components and automobiles
 India produces around 2 million automobiles
currently
 Currently has 32 national and international
players
 There has been a sustained growth in the
automotive sector of India following the economic
reforms of 1991 which opened up 100 percent
Foreign Direct Investment in this sector.
 EVOLUTION OF INDUSTRY
Early to mid 90s
Initial Years
Manufacturing was • Seller’s market and Mid 90s – Early 2000s
licensed
long waiting periods • Buyers market
• High Customs duty on
• De-licensing in 1993
Import • Increase in
• Removal of capacity Indigenization
• Steep excise duties &
• sales tax restrictions • Easy Auto finance
• Decrease in customs
• 2 Major players: • Manufactures
& excise
Premier Automobiles Ltd diversifying into
& Hindustan Motors • Auto finance boom- related activities:
1980s finance lease, fleet
• Entry of MUL, better more players (foreign
management,
• product, with government banks & non banking insurance and used
• support companies, better
car market
• Seller’s Market schemes.
• Long Waiting Periods
Automobile export
 KEY ENABLERS KEY CHALLENGES

• Favorable Demographics • Cost Pressure

• Improving income curve • High Expectations
• Reducing interest rates • Inadequate Infrastructure Development

Key Features of Future Auto Policy

• Foreign Direct Investment
• Import tariff
• Incentives for Research and Development (R&D)
• Environmental Aspects
• Other measures

New challenges of 2010

• BUDGET 2010
• FUEL PRICE HIKE
Types of companies(origin)

 Indian Automobile Manufacturers

 Multi-national automobile manufacturers
 Locally manufactured Automobiles of
Multi-national Companies
 Cars sold in India as CBU (Completely Built
Units)
 Segments
 Passenger
 Two wheelers - Bikes n
scooters
 Three wheelers
 Four wheelers
 Luxury
 Sedan
 SUV
 MUV
 Hatchback
 Commercial (HMV)
 Goods carriers
 Passenger carrier
 Industrial
 Major Players
 Ashok Leyland

• Jaguar
Chinkara Motors
• Lamborghini
 Force Motors
• Land Rover
 Hindustan Motors
• Maybach
 MMahindra • Mercedes-Benz
 aruti Suzuki • Mitsubishi
 Premier • Nissan
 San Motors • Porsche
 Tata Motors • Rolls Royce
 Audi • Škoda
 Bentley • Suzuki
 BMW • Toyota
 Chevrolet • Volkswagen
 Fiat • Volvo
 Honda
 Hyundai
 Indian Passenger Vehicle Market –
Competitive Scenario

Passenger
Cars 52% 17% 19% - 1% 5% 2% 2% 2% 1% - <1% <1%
Utility
Vehicles 2% 18% 1% 42% 21% 1% 10% 1% <1% - 4% - <1%
Multi
Purpose 100% - - - - - - - - - - - <1%
Vehicles

Figures denote Mkt Share 4th largest Passenger

(Apr-Oct 05) Vehicle Market in Asia
FOREIGN TRADE POLICY 2009-
14
 Automobile industry, having their own R&D establishment,
would be allowed free import of reference fuels (petrol and
diesel), upto a maximum of 5 KL per annum, which are not
manufactured in India.

 Market Linked Focus Product Scheme (MLFPS) expanded by

inclusion of products like auto components, motor cars, and its
parts.etc. Benefits to these products will be provided, if exports
are made to 13 identified markets (Algeria, Egypt, Kenya,
Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine,
Vietnam, Cambodia, Australia and New Zealand).

 Scheme for Status Holders -Additional Duty Credit Scrips shall be

given to Status Holders @ 1% of the FOB value of past exports
accelerate exports and encourage technological up gradation
 Governing body
 The principal instrument governing the automotive sector in
India is the Motor Vehicles Act, 1988 (MVA) along with the
Central Motor Vehicles Rules 1989 (CMVR).
 The Act governs emission norms and safety standards in India
and consolidates the law pertaining to motor vehicles
 . MoSRT&H has constituted two committees to recommend
and advise the ministry on issues relating to Safety and
Emission Regulations. These committees are - Central Motor
Vehicles Rules-Technical Standing Committee (CMVR-TSC) and
Standing Committee on Implementation of Emission
Legislation (SCOE).
 Central Motor Vehicles Rules-Technical Standing Committee
(CMVR-TSC) was formulated to receive draft recommendations
from other committees, such as Automotive Industry Standards
Committee and Bureau of Indian Standards, and to finalise and
approve safety recommendations made by such committees
The CMVR-TSC is assisted by the Automotive Industry
Standards Committee (AISC) and Bureau of Indian Standards
(BIS).
IMPLEMENTATION OF RULES

 Ministry of Heavy Industry & Public Enterprises

(MoHI&PE)
 Society of Indian Automobile Manufacturers (SIAM)
 Automotive Component Manufacturers Association of
India (ACMA)
 Tractor Manufacturers Association (TMA)
 Automotive Tyre Manufacturers Association (ATMA)
 Automotive Research Association of India (ARAI)
 Vehicle Research & Development Establishment
(VRDE)
 Government Policies Towards Indian
Automobile Industry
 Bring in a minimum foreign equity of US $ 50 Million if a joint
venture involved majority foreign equity ownership
 Automatic approval for foreign equity investment upto 100%
of manufacture of automobiles and component is permitted
• FIIs including overseas corporate bodies (OCBs) and NRIs
are permitted to invest up to 49 percent of the paid-up
equity capital of the investee company, subject to approval
of the board of directors and of the members by way of a
special resolution. .
 Investments in making auto parts by a foreign vehicle maker
will also be considered a part of the minimum foreign
investment made by it in an auto-making subsidiary in India.
The move is aimed at helping India emerge as a hub for
global manufacturing and sourcing for auto parts.
 Specific component of excise duty applicable to large
cars and utility vehicles will be reduced to 15,000
rupees per vehicle from 20,000 rupees earlier.

 The Proposal by the Govt. to set up an expert group to

advise on a viable and sustainable system of pricing
petroleum products, as this will surely had an impact
on the Automobile Industry.

 The announced reduction on the basic customs on

bio-diesel is great news for all companies working on
environmental saving technologies
Thank you