The Automobile & Motorcycle Industry in India

Transcription

1 The Automobile & Motorcycle Industry in India BANK OF TOKYO-MITSUBISHI UFJ, LTD. CORPORATE RESEARCH DIVISION (SINGAPORE) OCT 215 Bank of Tokyo Mitsubishi UFJ A member of MUFG, a global financial group

2 Table of Contents Ⅰ.The Automobile Industry in India 2 1. Current Situation (page 3 ~) 2. Manufacturers Trends (page 1 ~) 3. Regulatory Trends (page 17) 4. Future Outlook (page 18~) Ⅱ.The Motorcycle Industry in India Current Situation (page 26~) 2. Manufacturers Trends (page 29~) 3. Future Outlook (page 31~) 1 Automobile and Motorcycle Industry in India October 215

3 Ⅰ. The Automobile Industry in India 2 Automobile and Motorcycle Industry in India October 215

4 1. Current Situation / Macroeconomic Trends (1/2) Although India s real GDP growth rate had continued to slowdown overall, there has been some gradual improvement recently. Real GDP Growth Rate in India 12% 9.8% 9.3% 9.3% 1% 8% 6% 4% 3.9% 8.5% 1.3% 6.6% 5.1% 6.9% 7.2% 2% % (Note) The figures from 212 onwards are based on the new standard (211). (Source) IMF World Economic Outlook Database, April 215; compiled by BTMU CRD Singapore GDP per Capita and Automobile Sales (1, units) (USD) 4, 2, 3, 1,5 2, 1, 1, Automobile Sales (LHS) GDP per Capita (RHS) (Source) CEIC, IMF World Economic Outlook Database, April 215; compiled by BTMU CRD Singapore 3 Automobile and Motorcycle Industry in India October 215

5 1. Current Situation / Macroeconomic Trends (2/2) Although policy interest rates had remained high, they have been declining recently due to a slowdown in the rates of inflation. Policy Interest Rate and Automobile Sales in India (1, units) 5 4 1% 8% Fuel prices continued to drop from mid 214, but rose temporarily in May 215 due to a rebound in crude oil prices. 3 6% 2 4% 1 2% % Jun/21 Jun/211 Jun/212 Jun/213 Jun/214 Jun/215 Automobile Sales (LHS) Policy Interest Rate (RHS) (Source) CEIC; compiled by BTMU CRD Singapore Fuel Prices in India (INR / l) Dec/21 Jun/211 Dec/211 Jun/212 Dec/212 Jun/213 Dec/213 Jun/214 Dec/214 Jun/215 Gasoline Diesel Price difference around INR 16 (Note) Gasoline prices refer to retail prices at the end of each month in gasoline stands of Indian Oil Corporation (IOC) in Delhi. (Source) CEIC, website of IOC; compiled by BTMU CRD Singapore 4 Automobile and Motorcycle Industry in India October 215

6 1. Current Situation / Automobile Sales India ranked 3rd in Asia after China and Japan in 214. Automobile Sales Ranking in 11 Asian Countries (1, units) Country (YoY) CAGR (29 214) China 13,622 18,62 18,55 19,36 21,984 23,492 (6.9%) 11.5% Japan 4,69 4,956 4,21 5,37 5,375 5,563 (3.5%) 3.8% India 2,264 3,39 3,293 3,584 3,239 3,177 (-1.9%) 7.% South Korea 1,455 1,556 1,58 1,542 1,524 1,65 (8.3%) 2.5% Indonesia ,116 1,229 1,29 (-1.7%) 2.% Thailand ,436 1, (-33.7%) 1.% Malaysia (1.6%) 4.4% Taiwan (12.%) 7.6% Philippines (29.6%) 12.2% Pakistan (3.6%) 5.6% Vietnam (38.2%) 2.3% (Note) The figures for India, Pakistan and Vietnam denote domestically-produced automobiles and do not include data for imported automobiles. (Source) Automobile industry association of respective countries, CEIC, newspapers, etc.; compiled by BTMU CRD Singapore 5 Automobile and Motorcycle Industry in India October 215

7 1. Current Situation / Historical Automobile Sales Demand for automobiles has bounced back since June 214, as consumer confidence recovered after the new administration was established and automobile manufacturers launched new models actively. Annual Automobile Sales in India (1, units) 5, 4, 3, 2, 9.2% 1, Automobile Sales (LHS) YoY (RHS) CAGR (1 years) (Source) CEIC; compiled by BTMU CRD Singapore Monthly Automobile Sales in India (1, units) 4% 3% 2% 1% % -1% % 2% % -2% -4% -6% Jun/212 Dec/212 Jun/213 Dec/213 Jun/214 Dec/214 Jun/215 Automobile Sales (LHS) YoY (RHS) (Source) CEIC; compiled by BTMU CRD Singapore 6 Automobile and Motorcycle Industry in India October 215

8 1. Current Situation / Historical Automobile Sales by Type Passenger vehicles account for about 8% of total automobile sales. The majority of vehicles sold were small automobiles in both passenger and commercial vehicle markets. Automobile Sales by Type (1, units) 4, 3, Passenger Vehicle Commercial Vehicle , , 1,17 1,311 1,512 1,545 1,814 2,416 2,517 2,77 2,552 2, (Source) CEIC; compiled by BTMU CRD Singapore Automobile Sales by Segment <Passenger Vehicle> <Commercial Vehicle> (1, units) (1, units) 3, 4% 1, 6% ~ 販売台数 ~Sales~ ~ ~ 販売台数 ~Sales~ ~ 9 5% Medium- to 2,5 3% Van バン中大型 large-vehicle 8 4% ((with 総重量 loading 7.5t capacity 以上 of 7.5 ) tons or more) UV/MPV 7 3% 2, 2% 小型 Small vehicle 6 2% (with( 総重量 loading 7.5t capacity Medium- to 中大型 of 未満 less ) than 7.5 tons) 1,5 1% large-vehicle 5 1% ( 全長 (more 4m than 超 ) 4m) Small 小型 vehicle 4 % ~ 前年比 YoY ~ 1, % ( 全長 (less 4m than 以下 4m) ) 3-1% 小型 Small vehicle 前年比 YoY 2-2% 中大型 Medium- to 5-1% ((Total) large-vehicle 全体 ) 1-3% 7-2% (Source) FOURIN Asia Automobile Monthly Research Report; compiled by BTMU CRD Singapore Automobile and Motorcycle Industry in India October 215-4%

9 1. Current Situation / Automobile Production India ranked 4th in Asia after China, Japan and South Korea in 214. In India, about 8% of automobiles are produced for domestic demand, while 2% are exported. Automobile Production Ranking in 11 Asian Countries (1, units) Country (YoY) CAGR (29 214) China 13,763 18,265 18,419 19,272 22,117 23,723 (7.3%) 11.5% Japan 7,935 9,629 8,399 9,943 9,111 9,775 (7.3%) 4.3% South Korea 3,513 4,272 4,657 4,558 4,522 4,525 (.1%) 5.2% India 2,628 3,529 3,935 4,142 3,874 3,839 (-.9%) 7.9% Thailand 999 1,645 1,458 2,429 2,457 1,881 (-23.5%) 13.5% Indonesia ,57 1,28 1,296 (7.3%) 22.8% Malaysia (-.8%) 4.% Taiwan (12.%) 1.9% Pakistan (4.6%) 6.3% Vietnam (1.1%) 1.5% Philippines (11.1%) 7.3% (Source) Automobile industry association of respective countries, CEIC, newspapers, etc.; compiled by BTMU CRD Singapore 8 Automobile and Motorcycle Industry in India October 215

10 1. Current Situation / Automobile Production and Exports Production volume decreased in due to weak domestic demand. Meanwhile, export volume maintained momentum, especially for Africa and the Middle East. Annual Automobile Production in India (1, units) 5, 4, 3, 2, 9.9% 1, Automobile Sales (LHS) YoY (RHS) CAGR (1 years) (Source) CEIC; compiled by BTMU CRD Singapore Annual Automobile Exports in India (1, units) 4% 3% 2% 1% % -1% 8 6 6% 4% % Export Volume (LHS) YoY (RHS) CAGR (1 years) 2% % -2% (Source) CEIC; compiled by BTMU CRD Singapore 9 Automobile and Motorcycle Industry in India October 215

11 2. Manufacturers Trends / Major Automakers in India (1/2) Foreign manufacturers such as Maruti Suzuki and local makers (Tata, etc.) are in the market. Overview of Major Manufacturers 1 (as of Sep 215) Brand Maruti Suzuki Tata Hyundai Motor Company Maruti Suzuki India Limited Tata Motors Limited Hyundai Motor India Limited Date of Establishment Location of Headquarters 1, Nelson Mandela Road, Vasant Kunj, New Delhi 11 7, India Bombay House 24, Homi Mody Street, Mumbai, Maharashtra 4 1, India A-3, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi 11 44, India Capital INR 1.44 billion (JPY 2.66 billion) INR 6.35 billion (JPY billion) USD 212 million (JPY billion) Production Capacity Finished cars:1.51 million units Engines:1.65 million units Finished cars:1.68 million units Engines:N.A Finished cars:68, units Engines:9, units No. of Employees 9,1 58, 1, Shareholding Structure 1Suzuki Motor:54.21% 2Life Insurance Corporation of India:8.45% and others 1Tata Sons:25.96% 2Citibank N.A.:16.17% 3Corporation of India: 6.75% and others 1Hyundai Motor:1% Major Models Alto, Dzire, Swift, Wagon R, Ertiga, Omni, Eeco, Ritz Indica, Nano, Indigo, Sumo i1, Eon, i2, Grand, Verna, Santro (Note) INR1=JPY1.84, USD1=JPY12 (Source) Website of respective companies, newspapers, etc.; compiled by BTMU CRD Singapore 1 Automobile and Motorcycle Industry in India October 215

12 2. Manufacturers Trends / Major Automakers in India (2/2) Overview of Major Manufacturers 2 (as of Sep 215) Brand Mahindra Toyota Honda Company Mahindra & Mahindra Limited Toyota Kirloskar Motor Private Ltd. Honda Cars India Date of Establishment Location of Headquarters Gateway Building, Apollo Bunder, Mumbai 4 1, India Plot No 1 Bidadi Industrial Area, Bengaluru , India Plot No. A-1, Sector 4/ 41, Surajpur- Kasna Road, Greater Noida Industrial Development Area, Noida 21 36, India Capital INR 2.73 billion (JPY 5.2 billion) INR 7. billion (JPY billion) INR 7.7 billion (JPY billion) Production Capacity Finished cars:76, units Engines:5, units Finished cars:31, units Engines:1, units Finished cars:24, units Engines:16, units No. of Employees 34,6 5,4 N.A Shareholding Structure N.A 1Toyota:89% 2Kirloskar Group:11% 1Honda Motor :73.6% 2Asian Honda Motor:26.4% Major Models Bolero, Scorpio, XUV5, Xylo, Quanto Innova, Etios, Etios Cross, Fortuner Brio Amaze, Brio, Mobilio, City (Note) INR1=JPY1.84, (Source) Website of respective companies, newspapers, etc.; compiled by BTMU CRD Singapore 11 Automobile and Motorcycle Industry in India October 215

13 2. Manufacturers Trends / Top 1 Selling Models Popular models are priced around INR 6, and equipped with diesel engines or LPG/CNG engines of around 1,cc displacement. Top 1 Selling Models (As of June 215) Model Manufacturer Segment Displacement (l) Sales (units) Price (1, INR) Price (1, JPY) Gasoline Types by Fuel Diesel LPG/CNG 1 Alto Maruti Suzuki Mini.8 138, ~ ~ 66 2 Swift Dzire Maruti Suzuki Super compact ,434 5 ~ 6 92 ~ 1,1 3 Swift Maruti Suzuki Compact , ~ 7 83 ~ 1,29 4 Wagon R Maruti Suzuki Mini 1. 81, ~ ~ 1,34 5 Elite i2 Hyundai Compact ,82 52 ~ 8 96 ~ 1,47 6 Grand i1 Hyundai Compact , ~ ~ 1,18 7 Bolero Mahindra UV/MPV , ~ 72 1,3 ~ 1,32 8 City Honda Mediumsized , ~ 1,1 1,32 ~ 2,2 9 Omni Maruti Suzuki Mini.8 38, ~ ~ 52 1 Eon Hyundai Mini.8 38,7 28 ~ ~ 66 (Note) Sales prices are from New Delhi showrooms. INR1=JPY1.84. Classification of the segment is based on SIAM s classification. (Source) Website of each company; compiled by BTMU CRD Singapore Suzuki : Alto Suzuki : Swift Mahindra & Mahindra : Bolero 12 Automobile and Motorcycle Industry in India October 215 (Source) Website of each company; compiled by BTMU CRD Singapore

14 2. Manufacturers Trends / Sales and Market Share by Manufacturer (total sales and market share of passenger and commercial vehicles) Many global automakers have entered the Indian automobile market. Maruti Suzuki holds the largest market share at more than 3%. Japanese manufacturers account for about 5% of the market. Automobile Sales in India by Manufacturer Top: 212, Middle:213, Bottom: 214 (1, units) 5 1, 1,5 Maruti Suzuki 1,64 1,64 1,152 Tata Hyundai Mahindra Honda Toyota Ashok Market Share of Japanese & Non-Japanese Manufacturers(214) Japanese Maker 48% Other Japanese Maker 12% Martuti Suzuki 36% Indian Maker 29% Other Non- Japanese Maker 23% Non- Japanese Maker 52% Ford Market share by Manufacturer (214) Market Share by Manufacturer (June 215) GM Nissan Renault VW Eicher Force Skoda Fiat Isuzu Others Ford 2% GM 2% Nissan 2% Ashok 3% Toyota 4% Honda 6% Renault 1% VW Mahindra 12% 1% Eicher 1% Others 3% Hyundai 13% Tata 14% Maruti Suzuki 36% (%) Jun/212 Jun/213 Jun/214 Jun/215 Maruti Suzuki Tata Hyundai Mahindra Honda Toyota (Month/Year) (Source) CEIC, newspapers, etc.; compiled by BTMU CRD Singapore 13 Automobile and Motorcycle Industry in India October 215

15 2. Manufacturers Trends / PV Sales and Market Share by Manufacturer The mini, compact and super compact segments take up around 7% of the passenger vehicle market. Maruti Suzuki accounted for more than 4% of the market. Local companies such as Tata and Mahindra have faced an uphill battle in increasing sales. Meanwhile, foreign companies have increased their market share, driven by active launch of new models. PV Sales by Manufacturer in India Top: 212, Middle:213, Bottom: 214 Maruti Suzuki Hyundai Mahindra Passenger Vehicle Honda Toyota Tata Ford GM Nissan Renault VW Skoda Others UV/MPV (1, units) 4 8 1,2 PV Market Share by Manufacturer (214) Tata 5% Toyota 6% GM 2% Ford 3% Renault 2% Nissan 2% Honda 7% Mahindra 9% Skoda VW 1% Others 1% 2% Hyundai 17% Maruti Suzuki 43% PV Sales in India by Segment (%) UV/MPV UV/MPV エグゼクティブ等 Executive, etc Midsize ミッドサイズ スーパーコンパクト Super compact コンパクト Compact ミニ Mini マイクロ Micro *SIAM *Based 分類に基づく on SIAM s 22 classification PV Sales by Manufacturer (Jun 215) 5% 45% 4% 18% 16% 14% 12% 1% 8% 6% 4% 2% % 年 Jan-Jun 1~6 月 Maruti スズキSuzuki Hyundai 現代自 Mahindra Tata トヨタ Toyota ホンダ Honda 日産 Nissan (Source) CEIC, newspapers, etc.; compiled by BTMU CRD Singapore 14 Automobile and Motorcycle Industry in India October 215

16 2. Manufacturers Trends / CV Sales and Market Share by Manufacturer Indian manufacturers such as Tata, Mahindra and Ashok Leyland are major players in the commercial vehicle industry. Although Tata accounted for nearly 5% of the market, its share has been declining recently. In contrast, Ashok Leyland has increased its market share in early 215 thanks to strong sales of medium- to largesized trucks. CV Sales by Manufacturer in India Top: 212, Middle: 213, Bottom: 214 Tata Mahindra Ashok Leyland Eicher SML Isuzu Piaggio AMW Force その他 Small truck Medium- to large-truck Bus (1, units) CV Market Share by Manufacturer (214) Eicher 5% SML Isuzu 1% Ashok Leyland 15% Piaggio 1% Mahindra 28% AMW 1% Others 2% Tata 48% (Source) CEIC, newspapers, etc.; compiled by BTMU CRD Singapore CV Sales in India by Segment 1% <Small Truck> <Medium- < 中大型トラック to Large-Truck> > CV Sales by Manufacturer (June 215) (%) % 6% 4% 2% 5 % 1% 8% 6% 4% 2% % 35% 33% 31% 35% 44% 44% Jun/215 年 6 月 63% 62% 59% 55% 55% 53% Jun/215 年 6 月 年 Jan-Jun 6 月 その他 Others Eicher Ashok Tata Mahindra Others その他 Mahindra Eicher Ashok Tata Tata Mahindra Ashok Eicher Force 15 Automobile and Motorcycle Industry in India October 215

17 2. Manufacturers Trends / Earnings of Major Manufacturers There are significant differences in earnings of the major manufacturers. While Maruti Suzuki has reported robust sales, Tata has faced uphill battles in improving sales of commercial/passenger vehicles, and Mahindra s passenger vehicle sales have decreased. Meanwhile, Ashok Leyland s earnings increased, driven by a recovery in sales of medium- to large-trucks. These automakers financial strength has remained favorable. Ashok Leyland s balance sheet has improved because of increased profitability. 16 Earnings of Major Manufacturers (INR mn) Automobile and Motorcycle Industry in India October 215 Major Profit and Loss Indicators Tata Motors (standalone) 339,7 362,947 7.% -9,112-12,375 larger deficit 3,345-47,39 fall into the red Maruti Suzuki 426, ,55 14.% 54,482 67, % 27,83 37, % Mahindra & Mahindra 399, , % 47,482 42, % 37,584 33, % Ashok Leyland 99, , % 1,685 1, % 294 3,348 1,39.5% Average 316, , % 23,634 26, % 17,263 6, % Major Balance Sheet Indicators (Note) The average value does not include Tata Motors (consolidated). Tata Motors(consolidated) include Jaguar Land Rover Automotive(UK) etc. Earnings of Major 4 Automakers (25-215) (INR bn) 当期利益 Net profit EBITDA( Margin <Tata> <Maruti Suzuki> <Mahindra & Mahindra> <Ashok Leyland> (%) (INR bn) Revenue EBITDA Net Profit FY 214 FY 215 FY 214 FY 215 FY 214 FY 215 YoY YoY YoY Tata Motors (consolidated) 2,36,771 2,627, % 348, , % 139,91 139,863 -.% Equity/Assets Ratio D/E Ratio ROA FY 214 FY 215 Change FY 214 FY 215 Change FY 214 FY 215 Change Tata Motors (consolidated) 3.% 23.8% -6.3 pt % 6.1% -1.1 pt Tata Motors (standalone) 38.6% 29.8% -8.8 pt % -9.5% -1.2 pt Maruti Suzuki 68.6% 7.7% 2.1 pt % 11.6% 1.9 pt Mahindra & Mahindra 53.7% 58.4% 4.8 pt % 1.3% -2.5 pt Ashok Leyland 34.7% 38.5% 3.7 pt % 2.6% 2.3 pt Average 48.9% 49.3%.4 pt % 3.7% -2.1 pt (Source) Bloomberg, website of respective companies; compiled by BTMU CRD Singapore (%) (INR bn) (%) (INR bn) (%)

18 3. Regulatory Trends / Excise Duty The reduction in excise duties, which started in April, ended at the end of 214. Excise Duty From Dec 28 From Feb 29 From Jul 29 From Apr 21 From Apr 211 From Apr 212 From Apr 213 From Apr 214 From Jan 215 Small Passenger Vehicle 8% 8% 8% 1% 1% 12% 12% 8% 12% Medium to Large Passenger vehicle 1,5cc or less Over 1,5cc 2% 2% 2% 22% 22% 24% 24% 2% 24% SUV, etc. SUV, etc. 2% 2% 2% 22% 22% 27% 3% 3% 24% 27% 27% Truck (gasoline) 2% 2% 8% 1% 1% 12% 12% 8% 12% Truck (diesel) 1% 8% 8% 1% 1% 12% 12% 8% 12% Hybrid Vehicle 1% 1% 8% 1% 5% 12% 12% 8% 12% Electric Vehicle % % % % 4% 6% 6% 6% 6% Motorcycle 8% 8% 8% 1% 1% 1% 12% 8% 12% 17 Automobile and Motorcycle Industry in India October 215 (Note) Small passenger vehicles (PVs) are defined as cars of length up to 4. m, and equipped gasoline engine of under 1,2cc displacement or diesel engine of under 1,5cc. (Source) Materials from SIAM, newspapers, etc.; compiled by BTMU CRD Singapore

19 4. Future Outlook / Macroeconomic Trends (1/2) India s real GDP growth rate is likely to recover gradually, supported by solid domestic demand from 215 onwards. Future Outlook for Real GDP Growth 12% 1% 8% 6.6% 6.9% 7.2% 6% 5.1% 4% 2% 7.5% 7.5% 7.6% 7.7% 7.7% 7.8% % (Note) The figures from 212 onwards are based on the new standard (211). The figures from 215 onwards are estimated by IMF. (Source) International Monetary Fund, World Economic Outlook Database, April 215; compiled by BTMU CRD Singapore Future Outlook for GDP per Capita (USD) 3, 2,14 2,27 2,463 2,672 2, 1,522 1,496 1,58 1,627 1,88 1,942 1, (Note) The figures from 215 onwards are estimated by IMF. (Source) International Monetary Fund, World Economic Outlook Database, April 215; compiled by BTMU CRD Singapore 18 Automobile and Motorcycle Industry in India October 215

20 4. Future Outlook / Macroeconomic Trends (2/2) Increase in population and growing middle-class will boost potential automobile demand. Domestic Population in India (1 million) (Note) The figures from 215 onwards are estimated by the United Nations Department of Economic and Social Affairs (DESA). (Source) World Population Prospects:The 212 Revision; compiled by BTMU CRD Singapore Percentage of Middle-Class Households in India 1% 8% 6% 4% 2% % 75.3% 64.5% 52.7% 42.% 14.9% 4.7% (Note) Percentage of middle-class households out of all households. Middle-class households are defined as families with disposable income ranging from USD 5, to USD 35,. The figures from 215 onwards are based on estimates from Euromonitor. (Source) Euromonitor; compiled by BTMU CRD Singapore 19 Automobile and Motorcycle Industry in India October 215

21 4. Future Outlook / Potential for Growth in the Automobile Market The automobile market has been growing. There is much room for growth in India, compared to other major countries in Asia. GDP per Capita and Car Ownership Rate (GDP per Capita/USD) 3, Taiwan South Korea 1, Thailand Malaysia China 4, Philippines Indonesia 2, Vietnam India Pakistan 1 unit per 5 people 1 unit per 2 people 1 unit per 1 people 1 unit per 5 people 1 unit per 2 people (Car Ownership Rate) (Note) The size of the circle in the graph indicates the size of the population. GDP per capita and population are as of 213. Car ownership rate is as of the end of 212- the end of 213 (some estimation is included). (Source) Materials from IMF, etc.; compiled by BTMU CRD Singapore 2 Automobile and Motorcycle Industry in India October 215

22 4. Future Outlook / Automobile Sales Automobile sales are likely to increase from 215 onwards, due to gradual economic recovery as well as new launches from manufacturers. Future Outlook for Automobile Sales (1, units) 6, 5, 4, 4% 3% 2% 1% 3, % 2, 1, -1% -2% -3% % Automobile Sales (LHS) YoY (RHS) (Note) The figures from 215 onwards are estimated by BTMU CRD Singapore. (Source) CEIC; compiled by BTMU CRD Singapore 21 Automobile and Motorcycle Industry in India October 215

23 4. Future Outlook / Automobile Production Volume Production capacity and volume are likely to increase from 215 onwards, thanks to recovery in domestic demand and growing exports. Production Capacity, Production Volume and Utilization Rate of Automobile Manufacturers (1, units) 1, 1% 8, 8% 6, 6% 4, 4% 2, 2% Production Capacity Production Results Utilization Rate % (Note) The figures from 215 onwards are estimated by BTMU CRD Singapore. (Source) CEIC; compiled by BTMU CRD Singapore 22 Automobile and Motorcycle Industry in India October 215

24 4. Future Outlook / New Car Launches and Plans Major manufacturers plan to launch new models and/or full-model changes from late 215 onwards. Tata : Nexon New Car Launch Plan by Major Manufacturers (from late 215 onwards) Manufacturer Model Type Tata Launch Year Improvement Price (INR 1,) Kite Compact ~ Description Hatchback model which is a successor of the Indica. Nexon UV/MPV ~ Strategic model for the small utility segment. Maruti Suzuki : Baleno Maruti Suzuki Baleno Hatchback ~ Premium hatchback which is expected to be launched globally. Wagon R UV/MPV ~ Affordable compact SUV. Chevrolet Trailblazer UV/MPV 215 2,8 ~ SUV model for the luxury segment. Toyota : Vios Mahindra TUV3 UV/MPV ~ Global strategic model. S11 UV/MPV ~ Compact SUV which is expected to be launched at affordable price. Ford B-MAX UV/MPV ~ Expected to be rival model of Honda Mobilio. Renault : Kwid Toyota Innova UV/MPV 216 〇 1, ~ IMV model equipped with diesel engine of 2.5l displacement. Vios Midsize ~ Expected to be rival model of Honda s City. Renault Kwid Compact ~ Compact hatchback which was developed with Nissan. (Note) In the improvement section, refers to new models and refers to redesigned models. (Source) Website of respective companies, newspapers; compiled by BTMU CRD Singapore 23 Automobile and Motorcycle Industry in India October 215

25 4. Future Outlook / Production Capacity of Major Manufacturers Many manufactures have plans to expand their production capacity in the future. <Production Bases of Major Manufacturers> Passenger Vehicle Production Capacity and Expansion Plans of Major Manufactures (1, units) Manufacturer ~22 (214 vs) Major expansion plan Maruti Suzuki 1,75 1,51 1,51 1,51 1,76 (17%) To start operation at its Gujarat plant (increase annual production by 25, units). Tata 1,625 1,682 1,682 1,682 1,792 (7%) To expand annual production capacity at its Sanand plant in the future (from 25, to 35, units). Hyundai (%) Mahindra ,185 (57%) Ford (12%) To expand annual production capacity at its Chakan plant in the future (from 32, to 75, units). To start operation of its Sanand plant in 215 (increase annual production by 24, units). GM (-41%) To stop production at its Halol plant in 217 (127, units) and consolidate production at its Talegaon plant. Commercial Vehicle Nissan/ Renault (2%) To expand its Oragadam plant in the future (from 4, to 48, units). Toyota (%) Honda (%) Isuzu (333%) Others 97 1,18 1,22 1,121 1,463 (44%) To start its Sri City plant in 216 (increase annual production by 5, units). To expand its Sri City plant in the future (from 5, to 12, units). To expand VW s plant in 22 (from 13, to 2, units). To expand Mercedes-Benz s plant (from 2, to 3, units). Total 6,923 7,1 7,361 7,51 8,665 (22%) 24 Automobile and Motorcycle Industry in India October 215 (Note) The figures of each company refer to production capacity plan at the end of each year. (Source) Website of respective companies, newspapers; compiled by BTMU CRD Singapore

26 Ⅱ. The Motorcycle Industry in India 25 Automobile and Motorcycle Industry in India October 215

27 Ⅱ.The Motorcycle Industry in India 1. Current Situation / Motorcycle Sales India ranked 2nd next to China in 214. Motorcycle sales in India have grown at 13.1% CAGR over the past 5 years, which is high compared to other Asian countries. Motorcycle Sales Ranking in 11 Asian Countries (1, units) Country (YoY) CAGR (29-214) China 19,28 23,658 24,368 23,624 22,892 21,29 (-7.%) 2.1% India 8,645 11,237 13,64 13,817 14,358 16,14 (11.5%) 13.1% Indonesia 5,852 7,369 8,13 7,64 7,744 7,99 (2.1%) 6.2% Vietnam 2,687 3,15 3,85 3,9 3,1 2,43 (-21.6%) -2.% Thailand 1,535 1,846 2,7 2,13 1,824 1,72 (-6.7%) 2.1% Philippines (5.4%).9% Pakistan (-1.2%) 7.7% Taiwan (4.4%) 7.1% Malaysia (-22.3%).4% Japan (-.6%) 1.8% South Korea (-26.3%) -8.9% (Source) Motorcycle Association of respective countries, CEIC, etc.; compiled by BTMU CRD Singapore 26 Automobile and Motorcycle Industry in India October 215

28 Ⅱ.The Motorcycle Industry in India 1. Current Situation / Historical Motorcycle Sales Over the past 1 years, sales volume grew at an annual growth rate of 1.%. Monthly motorcycle sales in 215 have remained at a similar level to the previous year. Annual Motorcycle Sales in India (1, units) 2, 15, 1, 1.% 5, 3% 2% 1% % % Motorcycle Sales (LHS) YoY (RHS) CAGR (1 years) (Source) CEIC; compiled by BTMU CRD Singapore Monthly Motorcycle Sales in India (1, units) 2,5 2, 1,5 1, 5 4% 2% % -2% -4% -6% Jun/212 Dec/212 Jun/213 Dec/213 Jun/214 Dec/214 Jun/215 Motorcycle Sales (LHS) YoY (RHS) (Source) CEIC; compiled by BTMU CRD Singapore 27 Automobile and Motorcycle Industry in India October 215

29 Ⅱ.The Motorcycle Industry in India 1. Current Situation / Motocycle Production & Exports Motorcycles are mostly produced for domestic demand. Both production and export of motorcycles increased YoY. Annual Motorcycle Production in India (1, units) 2, 15, 1, 4% 3% 2% 5, 1.9% Motorcycle Production (LHS) YoY (RHS) CAGR (1 years) 1% % (Source) CEIC; compiled by BTMU CRD Singapore Annual Motorcycle Exports in India (1, units) 2,5 2, 1,5 1, % Motorcycle Sales (LHS) YoY (RHS) CAGR (1 years) 5% 4% 3% 2% 1% % (Source) CEIC; compiled by BTMU CRD Singapore 28 Automobile and Motorcycle Industry in India October 215

30 Ⅱ.The Motorcycle Industry in India 2. Manufacturers Trends / Sales and Market Share by Manufacturer By segment, motorcycle sales accounted for about 7% of total sales. India s largest motorcycle manufacturer, Hero, holds about 4% of the market. Recently, Honda has increased its market share due to strong sales in the scooter segment. Motorcycle Sales by Major Manufacturer (As of June 215) (1, units) Manufacturer Sales YoY Share Hero 3, % 4.1% Honda 2, % 27.1% TVS 1,1 6.1% 12.9% Bajaj % 11.% Yamaha % 3.3% Suzuki % 1.6% Others % 4.% Total 7, % 1% (Source) SIAM, ; compiled by BTMU CRD Singapore Sales by Major Manufacturer (1, units) 2, 16, 12, (Note) In December 212, the joint venture between Hero Group and Honda Motors was terminated. (Source) SIAM, CEIC, newspapers, etc.; compiled by BTMU CRD Singapore Motorcycle Market Share by Segment (%) 8, 4, 7% 6% 5% 4% 3% 2% 1% % <Motorcycle> Hero ホンダ Honda Bajaj TVS Yamaha ヤマハ スズキ Suzuki 6% 5% 4% 3% 2% 1% % 5% 4% 3% 2% 1% % <Scooter> ( 販売台数 (Sales/LHS) / 左目盛 ) Motorcycle Scooter Others (Market share/rhs) Yamaha Suzuki TVS Bajaj Honda Hero Honda ホンダ Hero TVS スズキ Suzuki ヤマハ Yamaha (Source) SIAM, CEIC, newspapers, etc.; compiled by BTMU CRD Singapore 29 Automobile and Motorcycle Industry in India October 215

31 Ⅱ.The Motorcycle Industry in India 2. Manufacturers Trends / Earnings of Major Motorcycle Manufacturers Major motorcycle manufacturers have reported solid earnings overall due to market expansion. They have also posted healthy balance sheets. Earnings of Major Motorcycle Manufacturers (INR mn) Major Profit and Loss Indicators Major Balance Sheet Indicators Revenue EBITDA Net Profit FY 214 FY 215 YoY FY 214 FY 215 YoY FY 214 FY 215 YoY Hero MotoCorp 251, ,56 8.9% 35,658 35,759.3% 21,91 23, % Bajaj Auto 197, ,39 7.% 41,155 41,421.6% 32,433 28, % TVS Motor 79,659 1, % 4,844 6, % 2,616 3, % Average 176,28 195, % 27,219 27, % 18,713 18, % Equity/Assets Ratio D/E Ratio ROA Earnings of Big 3 Motorcycle Manufacturers (25~215) (INR bn) 25 当期利益 Net profit FY 214 FY 215 Change FY 214 FY 215 Change FY 214 FY 215 Change Hero MotoCorp 55.5% 62.2% 6.7 pt % 23.1% 1.8 pt Bajaj Auto 65.1% 68.7% 3.6 pt % 18.6% -5.3 pt TVS Motor 39.7% 35.7% -4. pt % 8.5%.7 pt Average 53.4% 55.5% 2.1 pt % 16.7% -1. pt EBITDA( Margin <Hero MotoCorp > <Bajaj Auto > <TVS Motor> (%) (INR bn) (%) (INR bn) (%) (Source) Bloomberg, website of respective companies; compiled by BTMU CRD Singapore Automobile and Motorcycle Industry in India October 215

32 Ⅱ.The Motorcycle Industry in India 3. Future Outlook / Potential for Growth in the Motorcycle Market There is much room for growth in India, compared to other major countries in Southeast Asia such as Indonesia and Vietnam, etc. GDP Per Capita and Motorcycle Ownership Rate (GDP per Capita/USD) 3, 8, 1, 6, Malaysia China Thailand 4, Philippines Sri Lanka Indonesia 2, - 1 unit per 5 people Pakistan 1 unit per 2 people Myanmar India 1 unit per 1 people 1 unit per 5 people Vietnam 1 unit per 2 people (Motorcycle Ownership Rate) (Note) The size of the circle in the graph indicates the size of the population. GDP per capita and population are as of 213. Motorcycle ownership rate is as of the end of 212- the end of 213 (some estimation is included). (Source) Materials from IMF, etc.; compiled by BTMU CRD Singapore 31 Automobile and Motorcycle Industry in India October 215

33 Ⅱ.The Motorcycle Industry in India 3.Future Outlook / Motorcycle Sales The growth rate of sales is expected to slowdown at an annual rate of around 3% in 215, as income of rural residents (major motorcycle buyers) has declined due to poor harvest caused by bad weather in early 215. Sales are expected to recover gradually from 216 onwards, driven by solid demand, especially from rural regions. Future Outlook for Motorcycle Sales in India (1, units) 2, 16, 12, 3% 2% 1% 8, % 4, -1% % Motorcycle Sales (LHS) (Note) The figures from 215 onwards are estimated by BTMU CRD Singapore. (Source) CEIC; compiled by BTMU CRD Singapore YoY (RHS) 32 Automobile and Motorcycle Industry in India October 215

34 Ⅱ.The Motorcycle Industry in India 3. Future Outlook / Production Capacity of Motorcycle Manufacturers India s largest motorcycle manufacturer, Hero, and Japanese manufacturers plan to expand their production capacity. Production Capacity and Expansion Plans of Major Motorcycle Manufacturers ~ (1, units) 2, 4, 6, 8, 1, 12, Hero 7,65 1,8 1,8 Honda Bajaj / In 215, plans to start production at its Halol plant (increase annual production by 1.8 million units). From 216 onwards, plans to start production at its Andhra Pradehsh plant (increase annual production by +1.8 million units). 4,6 4,5 1,2 In 216, plans to start production at its Gujarat plant (increase annual production by +1.2 million units). <Major production bases of each manufacturer> TVS 2,712 Yamaha 1, 4 1,4 In 215, plans to start production at its Chennai plant (increase annual production by +4, units). Plans to expand its Chennai plant (increase annual production by +1.4 million units). Suzuki 54 5 Plans to start production at its new Rohtak plant (increase annual production by +5, units). (Note) The figures of each company refer to planned production capacity at the end of each year. ( ) indicates a plan which may be changed. (Source) Newspapers; compiled by BTMU CRD Singapore 33 Automobile and Motorcycle Industry in India October 215

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36 Internal Use Only Not For Distribution ( 貴社限り ) The Bank of Tokyo Mitsubishi UFJ Corporate Research Division (Singapore) 9 Raffles Place #1-1 Republic Plaza Singapore Analysts Kazuhiro Hori: hori_kazuhiro@sg.mufg.jp Kohei Yamaguchi: yamaguchi@sg.mufg.jp 35 Automobile and Motorcycle Industry in India October 215