The remaining six have yet to reveal their fiscal performance, which means the big number for FY will get bigger.
Demand is linked to economic growth and rise in income levels. Per capita penetration at around eighteen cars per thousand people is among the lowest in the world including other developing economies like Pakistan in segments like cars.
While the industry is highly capital intensive in nature in case of four-wheelers, capital intensity is a lot less for two-wheelers. Though three-wheelers and tractors have low barriers to entry in terms of technology, four wheelers are technology intensive.
Costs involved in branding, distribution network and spare parts availability increase entry barriers.
With the Indian market moving towards complying with global standards, capital expenditure will rise to take into account future safety regulations. As compared to their global counterparts, both the two-wheeler as well as four wheeler segments are relatively lesser fragmented.
However, things have changed, especially on the passenger cars front as many foreign majors have entered the Indian market. As a result, pricing power is likely to diminish going forward. Automobile majors increase profitability by selling more units.
As number of units sold increases, average cost of selling an incremental unit comes down. This is because the industry has a high fixed cost component. This is the key reason why operating efficiency through increased localization of components and maximizing output per employee is of significance.
Demand Largely cyclical in nature and dependent upon economic growth and per capita income. Seasonality is also a vital factor. Barriers to entry High capital costs, technology, distribution network, and availability of auto components. Bargaining power of suppliers Low, due to stiff competition.
Bargaining power of customers Very high, due to availability of options. While the year started at a good note but the industry headwinds like Demonetization, GST, BS norms led to a slowdown. The hit on profitability was higher than the hit on the volumes because most of the two-wheeler players offloaded their inventory on hefty discounts post the implementation of BS Norms.
The worst hit segment due to economic headwinds was the three-wheeler industry.
One of the only segment that proved to be resilient amid the ongoing uncertainties in the automobile segment in FY17 was Passenger Vehicles PV. The Indian four-wheeler segment is going through a shift from passenger vehicles to utility vehicles.
The industry has seen a flurry of new launches by all the participants in this space. The spending on constructing roads, airports and expected high GDP growth will benefit auto sector in general. Historically, the Indian Passenger car market has been skewed towards small passenger cars.
However, there is a structural change taking place in the industry with demand for UVs taking over the passenger car.
This shift is paving a way towards new avenues of the growth and will result in a more profitable growth for the sector. In the 2-wheeler segment, motorcycles are expected to witness a flurry of new model launches.
TVS, Honda and Hero Motocorp will continue to benefit from higher demand for ungeared scooters in the urban and rural markets.MUMBAI: India’s two-wheeler industry is set to record its fastest growth in at least five years in fiscal , boosted by plentiful monsoon rains that invigorated the key rural market and higher spending expected in cities because of a salary hike to government staff.
Industry players are. The Indian automobile market can be divided into several segments viz., two-wheelers (motorcycles, geared and ungeared scooters and mopeds), three wheelers, commercial vehicles (light, medium and heavy), passenger cars, utility vehicles (UVs) and tractors. Oct 18, · Two Wheeler Forum (TWF) is the only conference of its kind, dedicated to the Two Wheeler Sector in India.
Attendees come hungry to learn from our highly interactive panel sessions that include industry experts from all corners of the Two Wheeler space (Two Wheeler Manufacturers, Auto Component Suppliers, Government, Auto Associations and more). Jan 13, · Top 10 two wheeler manufacturers in India in According to Society of Indian Automobile Manufacturers (SIAM) report, the top ten two wheeler manufacturers combined to sell a total of over Indian two-wheeler makers cross million unit sales in FY 5 th Apr am.
Cumulative sales of only six out of 12 OEMs helps achieve a robust percent year-on-year growth, with. “In every industry, traditional players have vested interests in maintaining status quo. They have invested billions of dollars over several decades in research and development (R&D).