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The Indian PV market sentiments have been significantly positive post the economic downturn. The economic recovery coupled with the introduction of new models, easy availability of finance and aggressive pricing by almost all the players helped the industry to post such a strong growth. Sighting huge demand potential, almost all key manufacturers are forming different strategies to like new model launches, promotional offers, etc in order to enhance their market presence. It is expected that the Indian PV market is likely to witness 50 launches including variants and new models by FY12. Global majors like Honda, Hyundai, Volkswagen, Renault and Toyota are likely to come up with new launches in the compact car segment thereby intensify the competition level. Furthermore, the industry is also witnessing a structural shift, as diesel cars are increasingly gaining ground on the back of improvement in engine technology, which enhances fuel efficiency and lowers emission levels. The rising gap between retail prices of diesel and petrol is also influencing buyers to opt for diesel cars. CARE Research believes long-term macro factors like low penetration, rising disposable income and favourable demographics remains intact. At present, the penetration levels for passenger cars in India is significantly lower as compared to the emerging markets. The small car segment is likely to remain the main stay of the industry. The competitive advantage arising out low-cost destination, proximity to Asian markets and lower shipment costs makes India a sourcing hub and a manufacturing base for the major Original Equipment Manufacturers (OEM’s). In FY10, almost all the manufacturers reported a healthy rise in their top-line, driven by growth in both volumes and realisation. Operating margins also observed improvement owing to drop in raw material prices. Going forward, it is expected that the industry’s top-line will continue to witness a healthy growth scenario; however, the industry would face challenges of rising raw material prices and increase in interest cost, which would strain bottom-line. CARE Research has developed a detailed statistical model that attempts to forecast the domestic passenger vehicle sales. The sales are segregated between personal use and commercial use based on the interaction with the industry and analytical acumen. Vehicle sales for commercial sales is forecasted based on the service sector GDP growth, while the vehicle sales for personal use are forecasted based on ownership cost and the target household that can afford to own a car. Other qualitative factors like macro-economic outlook, consumer confidence, willingness of vehicle financers to finance purchases, actions of OEMs like launches, aggressiveness, sales push techniques, dealer network etc have also been quantitatively built in the demand forecasting model. TABLE OF CONTENTS : EXECUTIVE SUMMARY Passenger Vehicle (PV) industry back in top gear; growth to continue… Domestic demand to grow at a CAGR of 13-14 per cent till FY15 Small would continue to dominate the Passenger Car (PC) market Export to remain healthy for the next five years Top-line growth to remain healthy, but pressure on margins foreseen… SECTION I: INDUSTRY OUTLOOK OUTLOOK ON DOMESTIC MARKET Domestic market is expected grow at a CAGR of 13-14 per cent till FY15 Small car segment to grow at a CAGR of 15-16 per cent in next five years A4-A6 segment to remain niche segment Inadequate public transport infrastructure to fuel growth in MPV segment Widening gap between diesel and petrol prices, fuelling demand for diesel cars Diesel vehicle becomes more economical when driven more than 30 kms/day Diesel vehicles to drive passenger vehicle industry Investments of around $5 billion expected in the next 2-3 years Recovery in global economy to fuel growth in exports OUTLOOK ON PROFITABILITY Top-line to remain healthy EBITDA margins to remain under strain on the back of rise in input cost Rising input prices – A concern for the industry Net cash accruals to witness drop, while debt-equity to increase marginally DEMAND FORECASTING METHODOLOGY Domestic market Segregation of purchases for personal usage and commercial use Cost of ownership Adjusted Target Households Level I: Income distribution Exports For more information kindly visit : http://www.bharatbook.com/detail.asp?id=129358&rt=Report-on-Indian-Passenger-Vehicle-Industry-For-Indian-Customers.html Related Reports Report on Indian Passenger Vehicle Industry http://www.bharatbook.com/detail.asp?id=129357&rt=Report-on-Indian-Passenger-Vehicle-Industry.html Research Report on Chinese Passenger Vehicle Industry http://www.bharatbook.com/detail.asp?id=95043&rt=Research-Report-on-Chinese-Passenger-Vehicle-Industry.html -30- Or Contact us at : Bharat Book Bureau Tel: +91 22 27578668 Fax: +91 22 27579131 Email: info@bharatbook.com Website: www.bharatbook.com Follow us on twitter: http://twitter.com/#!/BharatBook Please visit our blog at http://bharatresearch.wordpress.com
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Report on Indian Passenger Vehicle Industry For Indian Customers
