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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Core essence: For the CV industry, CY10 marks an inflection point, with markets
poised for recovery after recession. The Indian passenger car industry is likely to witness
strong growth over the next 10 years.
Industry insights
The growth drivers supporting automobile demand, namely (a) increasing
urbanization, (b) growing working population, (c) growth in GDP and rise in disposable
incomes, (d) improvement in road infrastructure, remain in place and should sustain.
For the CV industry, even if economic conditions worsen, an FY09-10-like volume
decline is unlikely. This is because unlike FY09-10, availability of finance is good
despite increase in interest rates, which is critical for CV demand.
Improvement in road infrastructure and establishment of hub-and-spoke model would
ensure strong demand for M&HCVs and LCVs.
Commercial vehicles
The CV industry in India is likely to continue its strong growth in the high volume
segments, with a CAGR of 11% over FY10-15.
There would be a shift towards higher tonnage tractors and multi-axle trucks; tippers
would continue to contribute significantly towards total sales.
The small CV industry should see volume CAGR of 8% over FY11-15 to 0.29m units,
with the contribution of micro-trucks increasing from 17% in FY11 to 40% in FY15.
Passenger cars
The Indian passenger car market is likely to grow faster than the top-5 global
markets, at a CAGR of 12-15% to 7m-9m units.
Hatchbacks will continue to dominate the market in 2020. Volumes in this segment
are likely to grow, driven by increased offerings by international OEMs complemented
by a growing middle-class population.
SUV sales are likely to increase from 0.2m units in FY10 to 0.57m-0.62m units by
FY21 and MPV sales from 0.17m to 0.8m-0.9m units, driven by the mid-end segments
for UVs and MPVs.Entry UVs currently cater to rural customers; however, there is
growing demand for smaller trendy SUVs for the urban youth.
While the entry-level MPVs are the biggest segment (expected to reach ~0.4m units
by FY21), the mid-price MPVs are likely to grow faster due to higher urban demand.
The rural market is likely to grow at a CAGR of 16% primarily due to increase in the
number of households and 2.5x growth in consumption levels. While tier 2-3 cities
are would grow at 12% CAGR, the metros and tier-I cities would grow at 11% CAGR
over FY10-21.
Mr Prakash Telang is Managing
Director of Tata Motors' India
operations. He was Executive
Director (Commercial Vehicles) since
May 2007, and he assumed his
current role on 2 June 2009.
He joined the Tatas through the
prestigious TAS (Tata Administrative
Service) cadre, after spending the
first three years of his career with
Larsen & Toubro. Ever since, he has
been with the group. He is
responsible for product
development, manufacturing, sales
and marketing of the strategic
business unit of light and small
commercial vehicles.
Mr Telang holds a Bachelor's in
Mechanical Engineering and is an
MBA from IIM, Ahmedabad. He has
over three decades of functional
expertise in the automobile industry
and machinery manufacturing.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Core essence: For the CV industry, CY10 marks an inflection point, with markets
poised for recovery after recession. The Indian passenger car industry is likely to witness
strong growth over the next 10 years.
Industry insights
The growth drivers supporting automobile demand, namely (a) increasing
urbanization, (b) growing working population, (c) growth in GDP and rise in disposable
incomes, (d) improvement in road infrastructure, remain in place and should sustain.
For the CV industry, even if economic conditions worsen, an FY09-10-like volume
decline is unlikely. This is because unlike FY09-10, availability of finance is good
despite increase in interest rates, which is critical for CV demand.
Improvement in road infrastructure and establishment of hub-and-spoke model would
ensure strong demand for M&HCVs and LCVs.
Commercial vehicles
The CV industry in India is likely to continue its strong growth in the high volume
segments, with a CAGR of 11% over FY10-15.
There would be a shift towards higher tonnage tractors and multi-axle trucks; tippers
would continue to contribute significantly towards total sales.
The small CV industry should see volume CAGR of 8% over FY11-15 to 0.29m units,
with the contribution of micro-trucks increasing from 17% in FY11 to 40% in FY15.
Passenger cars
The Indian passenger car market is likely to grow faster than the top-5 global
markets, at a CAGR of 12-15% to 7m-9m units.
Hatchbacks will continue to dominate the market in 2020. Volumes in this segment
are likely to grow, driven by increased offerings by international OEMs complemented
by a growing middle-class population.
SUV sales are likely to increase from 0.2m units in FY10 to 0.57m-0.62m units by
FY21 and MPV sales from 0.17m to 0.8m-0.9m units, driven by the mid-end segments
for UVs and MPVs.Entry UVs currently cater to rural customers; however, there is
growing demand for smaller trendy SUVs for the urban youth.
While the entry-level MPVs are the biggest segment (expected to reach ~0.4m units
by FY21), the mid-price MPVs are likely to grow faster due to higher urban demand.
The rural market is likely to grow at a CAGR of 16% primarily due to increase in the
number of households and 2.5x growth in consumption levels. While tier 2-3 cities
are would grow at 12% CAGR, the metros and tier-I cities would grow at 11% CAGR
over FY10-21.
Mr Prakash Telang is Managing
Director of Tata Motors' India
operations. He was Executive
Director (Commercial Vehicles) since
May 2007, and he assumed his
current role on 2 June 2009.
He joined the Tatas through the
prestigious TAS (Tata Administrative
Service) cadre, after spending the
first three years of his career with
Larsen & Toubro. Ever since, he has
been with the group. He is
responsible for product
development, manufacturing, sales
and marketing of the strategic
business unit of light and small
commercial vehicles.
Mr Telang holds a Bachelor's in
Mechanical Engineering and is an
MBA from IIM, Ahmedabad. He has
over three decades of functional
expertise in the automobile industry
and machinery manufacturing.
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