EXECUTIVE SUMMARY
The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people.
The supply chain of this industry in India is very similar to the supply chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers.
Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition is the sector is high and increasing and the life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged.
Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring competition, the barriers to enter the Indian Automotive sector are high and these barriers are study. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%.
The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, India’s increasing per capita disposable income which is expected to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of the industry.
Tata Motors is leading the commercial vehicle segment with a market share of about 64%. Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%. Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler market.
Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of car they buy.
The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India.
Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favourable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.
Table of Contents
- Industry Definition
- Key Statistics
- Supply Chain
- Segmentation
- Market Characteristics
- Industry Conditions
- Key Competitors
- Key Factors
- Appendices
- References
Industry Definition
This class consists of units mainly engaged in manufacturing motor vehicles or motor vehicle engines.
The primary activities of this industry are:
- Motor cars manufacturing
- Motor vehicle engine manufacturing
The major products and services in this industry are:
- Passenger motor vehicle manufacturing segment (Passenger Cars, Utility Vehicles & Multi Purpose Vehicles)
- Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles)
- Two Wheelers
- Three Wheelers
Key Statistics
|
|
2004-2005 |
2005-2006 |
2006-2007 |
2007-2008 |
2008-2009 |
|
|
Motor Vehicle Production³ |
8,467,853 |
9,743,503 |
11,087,997 |
10,853,930 |
11,175,479 |
Units |
|
Industry Revenue1 |
24,379 |
26,969 |
30,507 |
32,383 |
33,342* |
USD million |
|
Exports³ (Units) |
629,544 |
806,222 |
1,011,529 |
1,238,333 |
1,530,660 |
Units |
|
Exports¹ (Revenue) |
1,915 |
2,231 |
2,552 |
3,008 |
3,718* |
USD million |
Source: ¹Department of Heavy Industry, ³Society of Indian Automotive Manufacturing (SIAM), National Accounts Division, *ImaginMor estimates, USD 1 = INR 46
|
Type of Vehicle |
2004-2005 |
2005-2006 |
2006-2007 |
2007-2008 |
2008-2009 |
Units |
|
Passenger Vehicles |
1,209,876 |
1,309,300 |
1,545,223 |
1,777,583 |
1,838,697 |
Number |
|
Commercial Vehicles |
353,703 |
391,083 |
519,982 |
549,006 |
417,126 |
Number |
|
Three Wheelers |
374,445 |
434,423 |
556,126 |
500,660 |
501,030 |
Number |
|
Two Wheelers |
6,529,829 |
7,608,697 |
8,466,666 |
8,026,681 |
8,418,626 |
Number |
|
Total |
8,467,853 |
9,743,503 |
11,087,997 |
10,853,930 |
11,175,479 |
Number |
Source: Society of Indian Automotive Manufacturing (SIAM)
|
Type of Vehicle |
2004-2005 |
2005-2006 |
2006-2007 |
2007-2008 |
2008-2009 |
Units |
|
Passenger Vehicles |
1,061,572 |
1,143,076 |
1,379,979 |
1,549,882 |
1,551,880 |
Number |
|
Commercial Vehicles |
318,430 |
351,041 |
467,765 |
490,494 |
384,122 |
Number |
|
Three Wheelers |
307,862 |
359,920 |
403,910 |
364,781 |
349,719 |
Number |
|
Two Wheelers |
6,209,765 |
7,052,391 |
7,872,334 |
7,249,278 |
7,437,670 |
Number |
|
Total |
7,897,629 |
8,906,428 |
10,123,988 |
9,654,435 |
9,723,391 |
Number |
Source: Society of Indian Automotive Manufacturing (SIAM)
|
Type of Vehicle |
2004-2005 |
2005-2006 |
2006-2007 |
2007-2008 |
2008-2009 |
Units |
|
Passenger Vehicles |
166,402 |
175,572 |
198,452 |
218,401 |
335,739 |
Number |
|
Commercial Vehicles |
29,940 |
40,600 |
49,537 |
58,994 |
42,673 |
Number |
|
Three Wheelers |
66,795 |
76,881 |
143,896 |
141,225 |
148,074 |
Number |
|
Two Wheelers |
366,407 |
513,169 |
619,644 |
819,713 |
1,004,174 |
Number |
|
Total |
629,544 |
806,222 |
1,011,529 |
1,238,333 |
1,530,660 |
Number |
Source: Society of Indian Automotive Manufacturing (SIAM)
Supply Chain
Supply Chain of Automobile Industry:
Source: ImaginMor, Inderscience Enterprises Ltd and United Nations Industrial Development Organisation
The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry.
The description and the role of each of the contributors to the supply chain are discussed below.
Third Tier Suppliers: These companies provide basic products like rubber, glass, steel, plastic and aluminium to the second tier suppliers.
Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. They work on designs provided by the first tier suppliers or OEMs. They also provide engineering resources for detailed designs. Some of their services may include welding, fabrication, shearing, bending etc.
First Tier Suppliers: These companies provide major systems directly to assemblers. These companies have global coverage, in order to follow their customers to various locations around the world. They design and innovate in order to provide “black-box” solutions for the requirements of their customers. Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers.
First tier suppliers are responsible not only for the assembly of parts into complete units like dashboard, breaks-axel-suspension, seats, or cockpit but also for the management of second-tier suppliers.
Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After researching consumers’ wants and needs, automakers begin designing models which are tailored to consumers’ demands. The design process normally takes five years. These companies have manufacturing units where engines are manufactured and parts supplied by first tier suppliers and second tier suppliers are assembled. Automakers are the key to the supply chain of the automotive industry. Examples of these companies are Tata Motors, Maruti Suzuki, Toyota, and Honda. Innovation, design capability and branding are the main focus of these companies.
Dealers: Once the vehicles are ready they are shipped to the regional branch and from there, to the authorised dealers of the companies. The dealers then sell the vehicles to the end customers.
Parts and Accessory: These companies provide products like tires, windshields, and air bags etc. to automakers and dealers or directly to customers.
Service Providers: Some of the services to the customers include servicing of vehicles, repairing parts, or financing of vehicles. Many dealers provide these services but, customers can also choose to go to independent service providers.
Segmentation
Product and Service Segmentation
Source: Society of Indian Automotive Manufacturing (SIAM)
The automotive industry of India is categorised into passenger cars, two wheelers, commercial vehicles and three wheelers, with two wheelers dominating the market. More than 75% of the vehicles sold are two wheelers. Nearly 59% of these two wheelers sold were motorcycles and about 12% were scoters. Mopeds occupy a small portion in the two wheeler market however; electric two wheelers are yet to penetrate.
The passenger vehicles are further categorised into passenger cars, utility vehicles and multi-purpose vehicles. All sedan, hatchback, station wagon and sports cars fall under passenger cars. Tata Nano, is the world’s cheapest passenger car, manufactured by Tata Motors - a leading automaker of India. Multi-purpose vehicles or people-carriers are similar in shape to a van and are taller than a sedan, hatchback or a station wagon, and are designed for maximum interior room. Utility vehicles are designed for specific tasks. The passenger vehicles manufacturing account for about 15% of the market in India.
Commercial vehicles are categorised into heavy, medium and light. They account for about 5% of the market. Three wheelers are categorised into passenger carriers and goods carriers. Three wheelers account for about 4% of the market in India.
Product and Service Segmentation
|
Segment |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
Unit |
|
Passenger Vehicles (PVs) |
|
|
|
|
|
|
|
Passenger Car |
10.22 |
10.39 |
9.91 |
10.65 |
12.42 |
% |
|
Utility Vehicles (UVs) |
2.15 |
2.23 |
2.18 |
2.18 |
2.39 |
% |
|
Multi Purpose Vehicles (MPVs) |
0.87 |
0.82 |
0.75 |
0.82 |
0.98 |
% |
|
Total Passenger Vehicles |
13.25 |
13.44 |
12.83 |
13.65 |
15.79 |
% |
|
Commercial Vehicles (CVs) |
|
|
|
|
|
|
|
Medium and Heavy Commercial Vehicles (M&HCVs) |
|
|
|
|
|
|
|
Passenger Carriers |
0.36 |
0.32 |
0.32 |
0.28 |
0.43 |
% |
|
Goods Carriers |
2.01 |
2.19 |
2.01 |
2.44 |
2.10 |
% |
|
Total M&HCVs |
2.37 |
2.51 |
2.33 |
2.73 |
2.53 |
% |
|
Light Commercial Vehicles (LCVs) |
|
|
|
|
|
|
|
Passenger Carriers |
0.28 |
0.25 |
0.25 |
0.24 |
0.32 |
% |
|
Goods Carriers |
1.17 |
1.27 |
1.36 |
1.67 |
1.77 |
% |
|
Total LCVs |
1.45 |
1.52 |
1.61 |
1.90 |
2.10 |
% |
|
Total Commercial Vehicles |
3.82 |
4.03 |
3.94 |
4.63 |
4.63 |
% |
|
Three Wheelers |
|
|
|
|
|
|
|
Passenger Carriers |
2.56 |
2.17 |
2.39 |
2.34 |
2.51 |
% |
|
Goods Carriers |
1.61 |
1.73 |
1.65 |
1.65 |
1.51 |
% |
|
Total Three Wheelers |
4.17 |
3.90 |
4.04 |
4.00 |
4.01 |
% |
|
Two Wheelers |
|
|
|
|
|
|
|
Scoters/Scooterettee |
13.01 |
11.68 |
10.21 |
9.31 |
11.57 |
% |
|
Motorcycles/Step-Throughs |
61.24 |
62.86 |
65.24 |
64.83 |
59.35 |
% |
|
Mopeds |
4.52 |
4.08 |
3.74 |
3.52 |
4.47 |
% |
|
Electric Two Wheelers |
- |
- |
- |
0.07 |
0.19 |
% |
|
Total Two Wheelers |
78.76 |
78.63 |
79.18 |
77.73 |
75.57 |
% |
|
Grand Total |
100.00 |
100.00 |
100.00 |
100.00 |
100.00 |
% |
Source: Society of Indian Automotive Manufacturing (SIAM)
Vehicle Registration:
India had over 100 million vehicles registered on its roads in the year 2008. This is a growth of about 100% in the past 9 years. Over 77% and about 77 million of these vehicles are two wheelers, about 14% and over 14 million are cars, jeeps and taxis. Over 5 million and over 1 million vehicles registered are goods vehicles and buses respectively.
Two wheelers account a significant market share. Tata Motors with the launch of Tata Nano is trying to attract some of these two wheeler buyers to buy a small, cheap and affordable passenger car.
Total Number of Vehicle Registrations in India from 2001 to 2008
|
Year
|
All Vehicles |
Two Wheelers |
Cars, Jeeps and Taxis |
Buses |
Goods Vehicles |
Other Vehicles¹ |
Units |
|
2001 |
54,991 |
38,556 |
70,58 |
634 |
2,948 |
5,795 |
Thousands |
|
2002 |
58,924 |
41,581 |
76,13 |
635 |
2,974 |
6,121 |
Thousands |
|
2003 |
67,007 |
47,519 |
85,99 |
721 |
3,492 |
6,676 |
Thousands |
|
2004 |
72,718 |
51,922 |
94,51 |
768 |
3,749 |
6,828 |
Thousands |
|
2005* |
80,045 |
57,417 |
10,460 |
822 |
4,053 |
7,337 |
Thousands |
|
2006* |
88,068 |
63,487 |
11,571 |
879 |
4,345 |
7,891 |
Thousands |
|
2007* |
96,808 |
70,141 |
12,810 |
936 |
4,652 |
8,464 |
Thousands |
|
2008* |
106,591 |
77,588 |
14,222 |
1,003 |
5,018 |
9,065 |
Thousands |
Source: Department of Road Transport & Highways, ¹includes tractors, trailors, three wheelers (passenger vehicles), and vehicles which are not separately classified, *ImaginMor estimates
Source: Society of Indian Automotive Manufacturing (SIAM)
Source: Department of Road Transport & Highways, *ImaginMor estimates
The total number of new vehicles registered in the 28 states and 7 union territories of India in the year 2008 were about 106,591,000. The diagram above displays the registration of new vehicles in various states and union territories. About 16 states and 1 union territory had over a million new vehicles registered. Tamil Nadu had about 16 million new vehicles registered, Maharashtra had over 13 million, and Gujarat had over 10 million. About 91% of these vehicles are non-commercial vehicles purchased by households looking for a two wheeler, or a car. Only about 9% of new vehicles registered are used for commercial purposes. Details of category wise new vehicle registrations in the various states and union territories are displayed in Appendix 1. The number of new vehicles registrations has grown by about 66% in the past five years.
India exports automobiles in about 203 countries. The total revenues from exports of automobiles, in the year 2008-2009 were USD 6,001.81 million with a growth of 33.85% from the previous year. The total exports from India in the year 2008-2009 were USD 185,295.36 million and in the year 2007-2008 were USD 163,132.18 million. The automobile industry in India contributes 3.24% of total exports in the year 2008-2009 compared to 2.75% in the year 2007-2008.
Top 20 Export destinations in 2007-2008 and growth from previous year
|
Rank |
Country |
Value in USD Millions |
Percentage Growth |
|
|
2007-2008 |
2008-2009 |
|||
|
1 |
United States of America |
593.64 |
525.24 |
-11.52 |
|
2 |
Italy |
332.35 |
359.68 |
8.22 |
|
3 |
Sri Lanka |
249.14 |
216.11 |
-13.26 |
|
4 |
South Africa |
224.93 |
188.57 |
-15.79 |
|
5 |
United Kingdom |
165.57 |
246.32 |
48.77 |
|
6 |
United Arab Emirates |
164.44 |
192.74 |
17.21 |
|
7 |
Algeria |
147.34 |
265.63 |
80.28 |
|
8 |
Bangladesh |
137.26 |
164.86 |
20.11 |
|
9 |
Egypt |
134.43 |
143.54 |
5.99 |
|
10 |
Germany |
133.52 |
409.63 |
206.8 |
|
11 |
Colombia |
118.88 |
120.71 |
1.54 |
|
12 |
Nepal |
111.33 |
98.13 |
-11.86 |
|
13 |
Mexico |
93.80 |
94.10 |
0.32 |
|
14 |
Turkey |
83.53 |
73.82 |
-11.63 |
|
15 |
Spain |
81.01 |
56.96 |
-29.69 |
|
16 |
France |
76.77 |
134.21 |
74.83 |
|
17 |
Nigeria |
66.01 |
148.74 |
125.03 |
|
18 |
Greece |
65.75 |
127.63 |
94.1 |
|
19 |
Netherland |
65.19 |
163.66 |
151.05 |
|
20 |
Ghana |
59.91 |
38.30 |
-36.07 |
Source: Ministry of Commerce and Industry
Market Characteristics
The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD 35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion. The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. India’s current GDP is about USD 650 billion and is expected to grow to USD 1,390 billion by 2016. The projected size in 2016 of the Indian automotive industry varies between USD 122 billion and UDS 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India’s GDP by 2016, which is more than double the current contribution. (Source: Department of Heavy Industry & Public Enterprises Government of India)
Determinants of demand for this industry include vehicle prices (which are determined largely by wage, material and equipment costs) and exchange rates, preferences, the running cost of a vehicle (mainly determined by the price of petrol), income, interest rates, scrapping rates, and product innovation.
Exchange Rate:Movement in the value of Rupee determines the attractiveness of Indian products overseas and the price of import for domestic consumption.
Affordability: Movement in income and interest rates determine the affordability of new motor vehicles. Allowing unrestricted Foreign Direct Investment (FDI) led to increase in competition in the domestic market hence, making better vehicles available at affordable prices.
Product Innovation is an important determinant as it allows better models to be available each year and also encourages manufacturing of environmental friendly cars.
Demographics: It is evident that high population of India has been one of the major reasons for large size of automobile industry in India. Factors that may be augment demand include rising population and an increasing proportion of young persons in the population that will be more inclined to use and replace cars. Also, increase in people with lesser dependency on traditional single family income structure is likely to add value to vehicle demand.
Infrastructure: Longer-term determinants of demand include development in Indian’s infrastructure. India’s banking giant State Bank of India and Australia’s Macquarie Group has launched an infrastructure fund to rise up to USD 3 billion for infrastructure improvements. India needs about $500 billion to repair its infrastructure such as ports, roads, and power units. These investments are been made with an aim to generate long-term cash flow from automobile, power, and telecom industries. (Source: Silicon India)
Price of Petrol:Movement in oil prices also have an impact on demand for large cars in India. During periods of high fuel cost as experienced in 2007 and first –half of 2008, demand for large cars declined in favour of smaller, more fuel efficient vehicles. The changing patterns in customer preferences for smaller more fuel efficient vehicles led to the launch of Tata Motor’s Nano – one of world’s smallest and cheapest cars.
International Markets Exports
The level of trade export is medium
The level of trade export is increasing
International Markets Imports
The level of trade import is low
The level of trade import is increasing
International Markets Analysis
The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years. The exports in automotive sector have grown on an average compound annual growth rate of 30% per year for the last seven years. The export earnings from this sector are over USD 6 billion.
Even with this rapid growth, the Indian automotive industry’s contribution in global terms is very low. This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2.3 million in the year 2008, yet India’s share is about 3.28% of world production of 70.53 million passenger and commercial vehicles. India’s automotive exports constitute only about 0.3% of global automotive trade.
(Source: Department of Heavy Industry & Public Enterprises Government of India)
Competition in this industry is high
Competition in this industry is increasing
Automotive industry is a volume driven industry and certain critical mass is a pre-requisite for attracting the much needed investment in research and development and new product design and development. Research and development investment is needed for innovations which is the lifeline for achieving and retaining competitiveness in the industry. This competitiveness in turn depends on the capacity and the speed of the industry to innovate and upgrade. The most important indices of competitiveness are productivity of both labour and capital.
The concept of attaining competitiveness on the basis of low cost and abundant labour, favourable exchange rates, low interest rates and concessional duty structure is becoming inadequate and therefore, not sustainable. A greater emphasis is required on the development of the factors like innovation which can ensure competitiveness on a long-term basis.
India with a rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, availability of trained manpower at competitive cost, fairly well-developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost has emerged as one of the favourite investment destinations for the automotive manufacturers. These advantages need to be leveraged in a manner to attain the twin objective of ensuring availability of best quality product at lower cost to the consumers on the one hand and developing and assimilating the latest technology in the industry on the other hand.
As per Automotive Mission Plan 2006-2016 (2008), the Indian Government recognises its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance. The Indian Government wants to create a policy environment to help companies gain competitive advantage. The government aims that with its policies its encourage growth, promote domestic competition and stimulate innovation.
(Source: Department of Heavy Industry & Public Enterprises Government of India)
The life cycle stage is growth
Life Cycle Reasons
- The market for manufacturing motor vehicles is consistently increasing.
- The products manufactured by this industry are profitable.
- Companies have been consistently opening new plats and employing over the past five years.
- Japanese and European manufacturers of motor vehicles have entered the market.
- Industry value added has been rising, along with the rise in GDP.
Life Cycle Analysis
General improvement in availability of trained manpower and good infrastructure is required for sustainable growth of the industry. Keeping this in view, the Indian Government has launched a unique initiative of National Automotive Testing and R&D Infrastructure Project (NATRIP) to provide specialised facilities for Testing, Certification and Homologation to the industry. A similar initiative is required for creating specialised institutions in automotive sector for education, training and development.
The auto industry has grown in the clusters of interconnected companies which are linked by commonalities and complementarities. The major clusters are in and around Manesar in North, Pune in West, Chennai in South, Jamshedpur-Kolkata in East and Indore in Central India. The Government is planning to create a National Level Specialises Education and Training Institute for Automotive Sector and to enhance the transportation, communication and export infrastructure facilities.
The contribution of automotive sector in the GDP of India is expected to double by 2016 through major spotlight on export of small cars, Multi-Utility Vehicles, Two and Three wheelers.
(Source: Department of Heavy Industry & Public Enterprises Government of India)
Industry Conditions
Barriers to entry in this industry is high
These barriers are study
- The cost of developing high volume production facilities.
- The ability to gain access to technology of major global operators.
- The relatively high competition between established domestic companies and foreign companies.
The automobile manufacturing sector is characterised by a high cyclical growth patterns, high fixed cost and break-even point levels, and an excessive number of participants. Barriers to entry into automobile manufacturing activity are formidable. Some of the barriers that need to be overcome by a new entrant include: the cost of developing high volume production facilities, in order to benefit from economies of scale; and the ability to gain access to technology of major operators, as the present incumbents include some of the largest multinationals, that have considerable claims to new technology. The relative large size of domestic market, together with high competition, has already seen significant rationalisation of this industry.
India has a well developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are:- Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are:- Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities.
Excise Duty
Central Excise duty is an indirect tax levied on those automobiles which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the automobiles are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers.
Types of Excise Duties
Basic Excise Duty: This is the duty leviable under First Schedule to the Central Excise Tariff Act, 1985 at the rates mentioned in the said Schedule.
Special Excise Duty: This is the duty leviable under Second Schedule to the Central Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. At present this is leviable on very few items.
Basic Central VAT (CENVAT) or Excise Tax Structure for Automobiles
|
Year |
Commercial Vehicles |
MUVs |
Cars |
2 Wheelers |
3 Wheelers |
Unit |
|
|
≤ 75 CC |
> 75CC |
||||||
|
2001-02 |
16 |
32 |
32 |
16 |
16 |
16 |
% |
|
2002-03 |
16 |
32 |
32 |
16 |
16 |
16 |
% |
|
2003-04 |
16 |
24+1* |
24+1* |
16+1* |
16+1* |
16 |
% |
|
2004-05 |
16 |
24+1* |
24+1* |
16+1* |
16+1* |
16 |
% |
|
2005-06 |
16 |
24+1* |
24+1* |
16+1* |
16+1* |
16 |
% |
|
2006-07 |
16 |
24+1* |
24/16**+1* |
16+1* |
16+1* |
16 |
% |
|
2007-08¹ |
16 |
24+1* |
24/16**+1* |
16+1* |
16+1* |
16 |
% |
Source: Society of Indian Automotive Manufacturing (SIAM) - Based on Government of India Notifications, ¹ Additional higher & Secondary Education Cess of 1%, *National Calamity Contingent Duty (NCCD) of 1 %, **16% on cars (up to 4000mm in length &1200cc for petrol & up to 4000mm in length & 1500cc for diesel) and 24% for rest
National Calamity Contingent Duty (NCCD): Normally known as NCCD. This duty is levied as per section 136 of the Finance Act, 2001, as a surcharge on specified goods.
Excise Duties and Cesses Leviable under Miscellaneous Act:On certain specified goods, in addition to the aforesaid duties, prescribed rate of excise duty and cess is also leviable.
Education Cesson excisable goods is levied in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 or any other law for the time being in force.
MODVAT and CENVAT
Taxation of inputs, like raw materials, components and other intermediaries has a number of limitations. In production process, raw material passes through various processes stages till a final product emerges. Thus, output of the first manufacturer becomes input for second manufacturer and so on. When the inputs are used in the manufacture of product `A', the cost of the final product increases not only on account of the cost of the inputs, but also on account of the duty paid on such inputs. As the duty on the final product is on ad valorem basis and the final cost of product `A' includes the cost of inputs, inclusive of the duty paid, duty charged on product `A' meant doubly taxing raw materials. In other words, the tax burden goes on increasing as raw material and final product passes from one stage to other because, each subsequent purchaser has to pay tax again and again on the material which has already suffered tax. This is called cascading effect or double taxation.
This very often distorted the production structure and did not allow the correct assessment of the tax incidence. Therefore, the Government tried to remove these defects of the Central Excise System by progressively relieving inputs from excise and countervailing duties. An ideal system to realize this objective would have been to adopt value added taxation (VAT). However, on account of some practical difficulties it was not possible to fully adopt the value added taxation.
Hence, Government evolved a new scheme, `MODVAT' (Modified Value Added Tax). MODVAT Scheme which essentially follows VAT Scheme of taxation. i.e. if a manufacturer A purchases certain components(raw materials) from another manufacturer B for use in its product. B would have paid excise duty on components manufactured by it and would have recovered that excise duty in its sales price from A. Now, A has to pay excise duty on product manufactured by it as well as bear the excise duty paid by the supplier of raw material B. Under the MODVAT scheme, an Original Equipment Manufacturer can take credit of excise duty paid by First Tier and Second Tier suppliers. It amounts to excise duty only on additions in value by each manufacturer at each stage.
MODVAT Scheme ensures the revenue of the same order and at same time the price of the final product could be lower. Apart from reducing the costs through elimination of cascade effect, and bringing in greater rationalization in tax structure and also bringing in certainty in the amount of tax leviable on the final product, this scheme will help the consumer to understand precisely the impact of taxation on the cost of any product.
Subsequently, MODVAT scheme was restructured into CENVAT (Central Value Added Tax) scheme. A new set of rules 57AA to 57AK , under The CENVAT Credit Rules, 2004, were framed and whatever restrictions were there in MODVAT Scheme were put to an end and comparatively, a free hand was given to the assesses.
Under the CENVAT Scheme, a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product. Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer.
Customs Duty
Customs Duty (Import duty and Export tax) is a type of indirect tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. In India, the basic law for levy and collection of customs duty is Customs Act 1962. It provides for levy and collection of duty on imports and exports, import/export procedures, prohibitions on importation and exportation of goods, penalties, offences, etc.
Basic Customs Tax Structure for Automobiles
|
Year |
CVs1 |
MUVs2 |
Cars |
Two Wheelers |
Three Wheelers |
Unit |
|
2001-02 |
35 |
105/60/35 |
105/60/35 |
105/60/35 |
105/60/35 |
% |
|
2002-03 |
30 |
105/60/35 |
105/60/35 |
105/60/35 |
105/60/35 |
% |
|
2003-04 |
25 |
105/60/35 |
105/60/35 |
105/60/35 |
105/60/35 |
% |
|
2004-05 |
20 |
105/60/35 |
105/60/35 |
105/60/35 |
105/60/35 |
% |
|
2005-06 |
15 |
100/60/15 |
100/60/15 |
100/60/15 |
100/60/15 |
% |
|
2006-07 |
12.5 |
100/60/12.5 |
100/60/12.5 |
100/60/12.5 |
100/60/12.5 |
% |
|
2007-08 |
10 |
100/60/10 |
100/60/10 |
100/60/10 |
100/60/10 |
% |
Source: Society of Indian Automotive Manufacturing (SIAM) - Based on Government of India Notifications, *For Used Vehicle/New CBU/CKD & Components respectively, 1CVs = Commercial Vehicles 2MUVs = Multi-Utility Vehicles
Export duties are levied occasionally to mop up excess profitability in international prices of goods in respect of which domestic prices may be low at the given time. But the sweep of import duties is quite wide.
For detailed Central Value Added Tax and Customs Tax on each category of vehicle refer to Appendix 2.
Service Tax
Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on an initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. The Finance Act extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir.
(Source: National Information Centre)
The automobile industry has a defined its target in the Automotive Mission Plan as “To emerge as the destination of choice in the world for design and manufacture of automobiles with output reaching a level of USD 145 billion accounting more than 10% of GDP and providing additional employment to 25 million people by 2016”. In order to achieve this plan interventions are required from both Industry and Indian Government. The Indian Government would play a key enabling role in facilitating infrastructure creation, promote the country’s capabilities, create a favourable and predictable business environment, attract investment and promote research & development. The role of Industry will primarily be in designing and manufacturing products of world-class quality standards, establishing cost competitiveness, improving productivity of both labour and capital, achieving scale and R&D enhancing capability and showcasing India’s products in potential markets.
In order to achieve these goals the following key recommendations have been made in the Automotive Mission Plan to the Indian Government and Industry:
- Manufacturing and export of small cars, multi-utility vehicles, two and three wheelers, tractors, components to be promoted
- Care to be taken of negative like and rules of the country with current negotiation of Free Trade Agreement and Regional Trade agreement with countries like Thailand, Singapore, Malaysia, China, Korea, Egypt, Gulf etc.
- Attractive Tariff Policy which may follow attractive investment.
- Specific measures will be taken for expansion of domestic market.
- Incremental investment of USD 35 to 40 billion to Automotive Industry during the next 10 years.
- National Road Safety Board to act as the coordinating body for promoting safety.
- Inspection and Certification system to be strengthened by encouraging public-private partnership.
- National level Automotive Institute for training on automobile at International Training Institutes (ITIs) and Automotive Training Institute (ATIs) to be set up.
- An Auto Design Centre to be established at National Institute of Design, Ahmadabad.
- National Automotive Testing and R&D Implementation Project (NATRIP) to act as Centre of Excellence for Technical Design Data.
- Integration of Information Technology in manufacturing to be promoted.
- R&D for product, process and technology to be incentivised.
- Road Map for Auto Fuel Policy beyond 2010 would be drawn.
Source: Maruti Suzuki 2008-2009
The profitability of motor vehicle manufacturers has been rising over the past five years, mainly due to rising demand and growth of Indian middle class. Major players of the industry, like Maruti Suzuki India and Tata Motors have been recording profits of 6% to 11% from the past five years. Whereas, earlier profit margins in the industry were only 1.5% to 3%.
Cost of material has reduced from over 85% in the year 2001-2002 to under 80% in the year2008-2009. Wages and salary as a percentage of revenue has been declining and with the increasing labour productivity this is expected to decline further in the coming years.
The level of Capital Intensity is high
The level of Labour intensity in medium
- The motor vehicle manufacturing industry requires significant level of capital investment.
- Value is added through the automated manufacturing and assembly of costly components.
- Labour input is required in the manufacturing, assembly, and finishing processes.
In order to achieve and retain competitiveness, vehicle manufacturing industry depends on its capacity and speed to innovate and upgrade. The most imperative indices for competitiveness in the industry are productivity in both labour and capital.
The level of technology change is high
The rate of change in technology is medium
Investment in technology by producers has been on the rise. The automobile industry in India has seen an enormous development in the engines which are being used. Carburettor engines have become obsolete and Multi Point Fuel Injection (MPFI) engines are the order of the days in patrol cars. The Diesel engines have also under gone a sea change from the time Rudolf Diesel invented it way back in the 1892. Today Common Rail Direct Injection (CRDI) is the order of the day.¹
Multi Point Fuel injection (MPFI) ¹
The fuel injects were used to meet stricter emission norms as it keeps pollutants to bare minimum and drives the maximum performance out of a vehicle by squeezing out the maximum mileage even from the last drop of fuel that goes into the engine.
MPFI system injects fuel into individual cylinders after receiving command from the on board engine management system computer or Engine Control Unit (ECU).
This technology results in superior fuel combustion, better fuel management, engine performance and reduced pollution. To get the maximum out from these types of engine one should use Premium petrol like XTRA Premium, Speed, and Power.
Common Rail Direct Injection (CRDI)¹–
CRDI engine cars offer 25% more power than the normal direct injection engine with a superior pickup and torque, offering sometimes up to 70% more power than the conventional diesel engines.
They are smooth, less strident, and immensely fuel efficient giving around 24 kilometres to a litre of Diesel. The fact that Diesel is cheaper than petrol in India further attributes greatness to the engine. In a CRDI engine, a tube or a common rail connects all the injectors and contains fuel at a constant pressure.
The high pressure in the common rail ensures that when injected, the fuel breaks up into small particles and mixes evenly with the air, thereby leaving little un-burnt fuel thus reducing pollution. The common rail principle has been used to reduce the noise which used to be a downside with earlier Diesel engines; the technology has been pioneered by the Fiat group, only to be adopted by other automobile companies around the world.
However, these engines are 25% more costly than the conventional engines. They also require higher degree of maintenance and spares are also expensive.
The Indian automotive industry is in the mindset of a major structural transformation in today’s globalised scenario. “System Supplies” of integrated components and sub-systems has become the order of the day, with individual small components being supplied to the system integrators instead of vehicle manufacturers. In this process most of the Small Scale Industrial units, manufacturing smaller individual components, have become tier 2 and tier 3 suppliers, while the large companies including most Multi National Companies are being transformed into tier 1 companies who purchase from tier 2 and tier 3, and sell to the auto manufacturers. (Source: Department of Heavy Industry)
Investment in new technology such as supply-chain management and collaborative forecasting (where members of the supply chain share forecasting data to reduce bottlenecks) will help make industry more competitive.
The level of volatility is medium.
Over the past few years, the Motor Vehicle Manufacturing industry has become more volatile. This has been the result of fluctuations in metal prices and fuel prices, as well as changes in legislation and assistance packages. India’s increasing per capita disposable income and growth in exports is playing a major role in the rise and the competitiveness of the industry. As per the BRIC report India’s per capita disposable income from current year will rise by 106% in 2015¹. This increase in the spending power has been a forefront of the economic development. According to the Economic Times of India, economic liberalization – allowing unrestricted Foreign Direct Investment (FDI) and removing foreign currency neutralisation and export obligations – has been also been one of the key to India’s automotive volatility².
(Source: ¹Quantum Information Services Ltd. & ²The Truth About Cars)
Key Competitors
Source: Society of Indian Automotive Manufacturing (SIAM)
Tata Motors
Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 16.45%
Tata Motors Limited is India’s largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer with over 24,000 employees. Since first rolled out in 1954, Tata Motors as has produced and sold over 4 million vehicles in India.
Tata Motors is the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two British brands which was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets.
In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint by franchises and joint ventures assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa.
With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck.
In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, a development which signifies a first for the global automobile industry. Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at USD 2,200 or ₹100,000 (excluding VAT and transportation cost). The Tata Nano has been subsequently launched as planned, in India in March 2009.
Maruti Suzuki India
Market Share: Passenger Vehicles 46.07%
Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti-800 and Alto, to stylish hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara.
Since inception in 1983, Maruti Suzuki India has produced and sold over 7.5 million vehicles in India and exported over 500,000 units to Europe and other countries. The company’s revenue for the fiscal 2008-2009 stood over USD 4 billion and Profits After Tax at over USD 243 million.
Hyundai Motor India
Market Share: Passenger Vehicles 14.15%
Hyundai Motor India Limited is a wholly owned subsidiary of world’s fifth largest automobile company, Hyundai Motor Company, South Korea, and is the largest passenger car exporter. Hyundai Motor presently markets 49 variants of passenger cars across segments. These includes the Santro in the B segment, the i10, the premium hatchback i20 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Transform in the E segment.
Hyundai Motor, continuing its tradition of being the fastest growing passenger car manufacturer, registered total sales of 559,880 vehicles in the year 2009, an increase of 14.4% over 2008. In the domestic market it clocked a growth of 18.1% as compared to 2008 with 289,863 units, while overseas sales grew by 10.7%, with export of 270,017 units. Hyundai Motor currently exports cars to more than 110 countries across European Union, Africa, Middle East, Latin America and Asia. It has been the number one exporter of passenger car of the country for the sixth year in a row.
In a little over a decade since Hyundai has been present in India, it has become the leading exporter of passenger cars with a market share of 66% of the total exports of passenger cars from India, making it a significant contributor to the Indian automobile industry. In 2009, in spite of a global slowdown, Hyundai Motor India’s exports grew by 10.7%. In 2010 Hyundai plans to add 10 new markets with Australia being the latest entrant to the list. The first shipment to Australia is of 500 units of the i20 and the total i20 exports to Australia are expected to be in the region of 15,000 per annum.
Mahindra & Mahindra
Market Share: Commercial Vehicles 10.01%, Passenger Vehicles 6.50%, Three Wheelers 1.31%
Mahindra & Mahindra is mainly engaged in the Multi Utility Vehicle and Three Wheeler segments directly. The company competes in the Light Commercial Vehicle segment through its joint venture subsidiary Mahindra Navistar Automotives Limited and in the passenger car segment through another joint venture subsidiary Mahindra Renault. In the year 2009, on the domestic sales front, the Company along with its subsidiaries sold a total of 220,213 vehicles (including 44,533 three wheelers, 8,603 Light Commercial Vehicles through Mahindra Navistar Automotives and 13,423 cars through Mahindra Renault), recording a growth of 0.6% over the previous year.
The company’s domestic Multi Utility Vehicle sales volumes increased by 3.3%, as against a decline of 7.4% for industry Multi Utility Vehicle sales. A record number of 153,653 Multi Utility Vehicles were sold in the domestic market in 2009 compared to 148,761 MUVs in the previous year.Hence, Mahindra & Mahindra further strengthened its domination of the domestic Multi Utility Vehicle sub-segment during the year, increasing its market share to 57.2% over the previous year’s market share of 51.3%.
Mahindra & Mahindra is expanding its footprint in the overseas market. In 2009 the Xylo was launched in South Africa. The company formed a new joint venture Mahindra Automotive Australia Pty. Limited, to focus on the Australian Market.
(Source: Mahindra & Mahindra Annual Report)
Ashok Leyland
Market Share: Commercial Vehicles 16.47%
Against the backdrop of the sharp slump in demand for commercial vehicles, during 2008-09, Ashok Leyland registered sales of 47,118 medium and heavy commercial vehicles (M&HCV), 37.5% less than in the previous year. This includes 16,049 M&HCV buses and 31,069 M&HCV trucks respectively, 8.7% and 46.3% less than in the previous year.
The company lost 1.8% market share in the Indian medium and heavy commercial vehicle market during the financial year 2008-09, mainly due to loss of sales in the truck segment. This was because the Eastern Region, where the Company’s presence had been historically weak, was relatively stable, whilst the market declined sharply in other regions.
While total industry volume of the medium and heavy duty buses declined by about 8.7%, the Company’s market share grew marginally and Ashok Leyland retained its number one position in this segment.
The Company sold 6,812 vehicles in the overseas markets during 2008-09. This represents a decrease of approximately 6.5% over the previous year. Total industry volume related to overseas markets to which the Company exports (such as Sri Lanka, the Middle East) witnessed a reduction of about 25% over the previous year.
To combat the impact of decline in CV sales, the Company focused on non-cyclical businesses in the portfolio.
The Company produced in all 54,049 vehicles during the year. To contain costs and conserve cash, the Company worked only about 50% of the working days in all its manufacturing units during the second half of the year.
(Source: Ashok Leyland Annual Report)
Hero Honda Motors
Market Share: Two Wheelers 41.35%
Hero Honda has been the largest two wheeler company in the world for eight consecutive years. The company crossed the 15 million unit milestone over a 25 year span. Hero Honda sold more two wheelers than the second, third and fourth placed two-wheeler companies put together.
As one of the world's technology leaders in the automotive sector, Honda has been able to consistently provide technical know-how, design specifications and R&D innovations. This has led to the development of world class, value - for- money motorcycles and scooters for the Indian market. On its part, the Hero Group has took the responsibility of creating world-class manufacturing facilities with robust processes, building the supply chain, setting up an extensive distribution networks and providing insights into the mind of the Indian customer. Since both partners continue to focus on their respective strengths, they have been able to complement each other. In the process, Hero Honda is recognized today as one of the most successful joint ventures in the world. It is therefore no surprise that there are more Hero Honda bikes on this country's roads than the total population of some European countries.
Hero Honda's bikes are sold and serviced through a network of over 3500 customer touch points, comprising a mix of dealers, service centres and stockists located across rural and urban India. Hero Honda has built two world-class manufacturing facilities at Dharuhera and Gurgaon in Haryana, and
Hero Honda was the torchbearer for the two-wheeler industry during 2008-2009. It sold more two-wheelers during the year than the combined volumes of the second, third and fourth placed competitor. Overall, the company sold 3.72 million two-wheelers, growth of 12% over previous year. Motorcycle sales in the domestic market, which account for more than 95 per cent of Hero Honda's sales, were up by 11%. The company posted sales of USD 2.4 billion and profits after tax of USD 256.40 million during the year 2008-2009. During the year under review, your Company exported 81,194 two-wheelers, a decline of 10%. Its third and most sophisticated manufacturing plant at Haridwar has just completed a full year of operations.
During the year, the company also turned in a rollicking performance with its scooter portfolio, with a 49% growth in domestic sales to 156,210 units. This performance allowed Hero Honda to increase its share in the domestic scooter market by more than three percentage points. Hero Honda's performance in the two-wheeler industry was the only standout performance during the year amongst the large players. Without Hero Honda's numbers, the two wheeler industry growth would have been marginal.
(Source: Hero Honda Motors Annual Report 2008-2009)
Bajaj Auto
Market Share: Two Wheelers 26.70%, Three Wheelers 58.60%
Bajaj Auto is ranked as the world's fourth largest two and three wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia. Despite falling demand in the motorcycle segment, the company has succeeded in maintaining an operating EBITDA (earnings before interest, taxes, depreciation and amortisation) margin of 13.6% of net sales and other operating income. From 1.66 million motorcycles in 2007-2008, the company’s domestic sales fell by 23% to 1.28 million units in 2008-2009.
Bajaj Auto is the country’s largest exporter of two- and three-wheelers.During 2008-2009, Bajaj Auto’s international sales achieved an all-time high of 772,519 units of two and three wheelers, representing a growth of 25% over the previous year.The growth was driven by the export of two-wheelers, which increased by 31% over 2007-2008 to achieve sales of 633,463 units in 2008-2009. The company expanded its footprint in Africa and Middle East, where the region’s share rose from 30% of the export business in 2007-2008 to 43% in 2008-2009. The total value of exports was USD 528 million, representing a growth of 29%.
The company’s domestic sales of three wheelers in 2008-209 were 12% lower compared to the previous year, and stood at 135,473 units. Exports of three wheelers grew at 2% to 139,056 units
(Source: Bajaj Auto Annual Report)
Key Factors
Consumer Sentiment Index
Description: Customer Sentiment Index, 12 month rolling average of the Index; historical and forecast data and analysis.
End customers are very important to ensure the survival of the Motor Vehicle Manufacturing industry. Economic downturns and other events can affect the expenditure decision of households. When customers are not happy or optimistic about the future of the economy, they will tend to postpone expenditure until times are better. In 2008-09, customer sentiment is expected to fall, which will have a brunt on the augmentation in demand of cars.
Domestic Goods Price – Metal – Iron and Steel
Description: The price of input such as steel.
Steel is a major input used when manufacturing a motor vehicle. Rises in the price of steel puts cost pressures on manufacturers, which often leads to a fall in profitability. Over the past five years, the price of steel has been rising rapidly. These rises in price eventually pass from the manufacturers to the end customers’.
Import and Export Taxes (Duties) – Motor Vehicle Tariffs
Description: Tariff rates applicable to the industry
High taffies may restrict flow of trade but may attract investment if domestic market is big enough and growing. Over the last few years India’s tariff policies and conditions of import of vehicles have served the purpose of attracting investments. Industry is keen that the existing tariff structure roadmap and conditions of import of vehicles are retained without any modifications because of certain systematic deficiencies which make manufacturing less cost competitive in India as compared to some of the neighbouring countries like China, Thailand, Indonesia, etc.
Wold Price - Energy – Crude Oil
Description: The world price of crude oil, $US/barrel, and price analysis.
The price of oil and petrol affect the driving habits of consumers and the type of car they buy. Over the past five years, the price of petrol has been influenced the buying decision of motorists, who are switching more to fuel efficient options. These include cars that run on liquefied petroleum gas (LPG), diesel and small cars that achieve better mileage. The trucking sector has also been struggling with the rise in the price of fuel, which has put enormous pressures on their costs.
The Key Success factors in the Motor Vehicle Manufacturing industry are:
- Efficiency factor - Improve labour productivity, labour flexibility, and capital efficiency
- Resource Availability - Quality manpower availability, infrastructure improvements, and raw material availability
- Effective cost controls - Close relationship with supplies and goods distribution channels.
- Establishment of export markets - Growth of export markets
- Having an extensive distribution/collection network - Goods distribution channels
- Successful industrial relations policy - Ethical and tactical industrial relations
- Access to the latest available and most efficient technology and techniques - The degree of investment in technological improvements and product development
- Optimum capacity utilisation - The level of plant utilisation
- Management of high quality assets portfolio - Understanding implications from Government policies
Appendices
Appendix 1: Detailed Geographic Segmentation
Geographical Segmentation:Sate-wise motor vehicles registration in India from 2001 - 2008
|
States |
|||||||||
|
Year |
2001 |
2002 |
2003 |
2004 |
2005* |
2006* |
2007* |
2008* |
Units |
|
Andhra Pradesh |
3,966 |
4,389 |
5,002 |
5,720 |
6,446 |
7,232 |
8,042 |
8,989 |
thousands |
|
Arunachal Pradesh |
21¹ |
21¹ |
21¹ |
21¹ |
21¹ |
21¹ |
21¹ |
21 |
thousands |
|
Assam |
542 |
596 |
657 |
727 |
798 |
883 |
973 |
1,086 |
thousands |
|
Bihar |
949 |
1,024 |
1,121 |
751 |
726 |
694 |
647 |
593 |
thousands |
|
Chhattisgarh |
857 |
948 |
1,076 |
1,216 |
1,367 |
1,536 |
1,726 |
1,939 |
thousands |
|
Goa |
341 |
366 |
397 |
436 |
483 |
537 |
585 |
638 |
thousands |
|
Gujarat |
5,576 |
6,008 |
6,508 |
7,087 |
7,892 |
8,785 |
9,633 |
10,543 |
thousands |
|
Haryana |
1,949 |
2,122 |
2,279 |
2,548 |
2,883 |
3,267 |
3,689 |
4,164 |
thousands |
|
Himachal Pradesh |
217 |
244 |
269 |
289 |
329 |
375 |
421 |
480 |
thousands |
|
Jammu & Kashmir |
330 |
364 |
399 |
439 |
493 |
556 |
628 |
719 |
thousands |
|
Jharkhand |
909 |
984 |
1,101 |
1,217 |
1,341 |
1,479 |
1,630 |
1,796 |
thousands |
|
Karnataka |
3,537 |
3,636 |
3,738 |
3,977 |
4,338 |
4,717 |
5,036 |
5,360 |
thousands |
|
Kerala |
2,112 |
2,315 |
2,552 |
2,792 |
3,180 |
3,612 |
4,034 |
4,564 |
thousands |
|
Madhya Pradesh |
3,095 |
3,173 |
3,459 |
3,804 |
4,119 |
4,442 |
4,710 |
4,968 |
thousands |
|
Maharashtra |
6,760 |
7,414 |
8,134 |
8,969 |
10,055 |
11,281 |
12,477 |
13,817 |
thousands |
|
Manipur |
77 |
90 |
97 |
106 |
114 |
123 |
134 |
145 |
thousands |
|
Meghalaya |
62 |
67 |
73 |
73² |
78 |
84 |
89 |
95 |
thousands |
|
Mizoram |
31 |
34 |
37 |
42 |
48 |
54 |
61 |
70 |
thousands |
|
Nagaland |
160 |
177 |
162 |
172 |
186 |
201 |
215 |
230 |
thousands |
|
Orissa |
1,096 |
1,215 |
1,359 |
1,525 |
1,717 |
1,936 |
2,159 |
2,417 |
thousands |
|
Punjab |
2,910 |
3,103 |
3,308 |
3,529 |
3,859 |
4,225 |
4,571 |
4,992 |
thousands |
|
Rajasthan |
2,943 |
3,197 |
3,487 |
3,834 |
4,285 |
4,791 |
5,281 |
5,815 |
thousands |
|
Sikkim |
12 |
13 |
15 |
17 |
19 |
21 |
23 |
25 |
thousands |
|
Tamil Nadu |
5,162 |
5,658 |
8,005 |
8,575 |
10,085 |
11,901 |
13,860 |
16,207 |
thousands |
|
Tripura |
50 |
57 |
66 |
76 |
85 |
95 |
105 |
117 |
thousands |
|
Uttarakhand |
364 |
406 |
457 |
516 |
580 |
651 |
732 |
822 |
thousands |
|
Uttar Pradesh |
4,921 |
5,171 |
5,928 |
6,460 |
7,271 |
8,144 |
8,970 |
9,919 |
thousands |
|
West Bengal |
1,690³ |
1,690³ |
2,366 |
2,548 |
2,816 |
3,138 |
3,464 |
3,833 |
Thousands |
|
Union Territories |
|||||||||
|
Year |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
Units |
|
Andaman & Nicobar Islands |
25 |
28 |
28² |
28² |
31 |
34 |
38 |
42 |
thousands |
|
Chandigarh |
386¹ |
386¹ |
562 |
586 |
629 |
677 |
732 |
799 |
thousands |
|
Dadra & Nagar Haveli |
13¹ |
13¹ |
31 |
35 |
43 |
54 |
67 |
86 |
thousands |
|
Daman & Diu |
37 |
41 |
44 |
48 |
55 |
63 |
71 |
79 |
thousands |
|
Delhi |
3,635 |
3,699 |
3971 |
4,237 |
4,544 |
4,868 |
5,166 |
5,469 |
thousands |
|
Lakshadweep |
4 |
5 |
5 |
5 |
6 |
7 |
7 |
8 |
thousands |
|
Pondicherry |
252 |
270 |
293 |
313 |
359 |
418 |
495 |
552 |
thousands |
Geographical Segmentation: Category-wise number of registrations in States of India
|
Type of Vehicle |
Andhra Pradesh |
Arunachal Pradesh |
Assam |
Bihar |
Chhattisgarh |
Goa |
Gujarat |
|
Multiaxled/Articulated Vehicles/Trucks & Lorries |
143,147 |
2,323 |
83,189 |
30,516 |
40,413 |
28,326 |
182,304 |
|
Light Motor Vehicles (goods) |
66,891 |
555 |
14,317 |
32,296 |
16,686 |
- |
204,336 |
|
Buses |
15,498 |
665 |
10,286 |
10,961 |
2,043 |
4,868 |
45,669 |
|
Taxis |
81,627 |
299 |
10,368 |
14,000 |
22,005 |
8,273 |
40,100 |
|
Light Motor Vehicles (passenger) |
263,325 |
1,430 |
29,806 |
9,507 |
7,474 |
9,375 |
276,908 |
|
Total Commercial |
570,488 |
5,272 |
147,966 |
97,280 |
88,621 |
50,842 |
749,317 |
|
Two Wheelers |
4,543,283 |
10,605 |
418,780 |
469,751 |
991,022 |
309,488 |
5,162,167 |
|
Cars |
397,738 |
2,340 |
106,063 |
27,508 |
43,572 |
71,516 |
572,414 |
|
Jeeps |
58,114 |
2,260 |
14,266 |
21,726 |
7,302 |
- |
110,943 |
|
Omni Buses |
36,549 |
- |
- |
3,259 |
- |
- |
1,345 |
|
Tractors |
62,363 |
333 |
10,280 |
77,848 |
44,321 |
470 |
275,543 |
|
Trailors |
46,885 |
155 |
8,740 |
50,403 |
38,804 |
|
199,603 |
|
Others |
4,500 |
179 |
20,724 |
2,928 |
2,103 |
3,804 |
16,158 |
|
Total non-commercial |
5,149,432 |
15,872 |
578,853 |
653,423 |
1,127,124 |
385,278 |
6,338,173 |
|
Type of Vehicle |
Haryana |
Himachal Pradesh |
Jammu & Kashmir |
Jharkhand |
Karnataka |
Kerala |
Madhya Pradesh |
|
Multiaxled/Articulated Vehicles/Trucks & Lorries |
147,667 |
41,644 |
29,958 |
62,566 |
100,596 |
73,315 |
77,178 |
|
Light Motor Vehicles (goods) |
58,325 |
2,340 |
12,272 |
- |
91,755 |
136,181 |
30,030 |
|
Buses |
9,369 |
4,872 |
20,139 |
9,539 |
29,710 |
67,206 |
24,626 |
|
Taxis |
14,990 |
14,970 |
10,325 |
21,814 |
40,839 |
114,245 |
61,424 |
|
Light Motor Vehicles (passenger) |
37,841 |
2,783 |
14,255 |
36,257 |
190,362 |
294,244 |
45,146 |
|
Total Commercial |
268,192 |
66,609 |
86,949 |
130,176 |
453,262 |
685,191 |
238,404 |
|
Two Wheelers |
1,526,404 |
152,286 |
253,611 |
937,745 |
2,732,674 |
1,595,808 |
2,876,191 |
|
Cars |
272,895 |
51,918 |
74,187 |
92,171 |
418,181 |
378,912 |
148,030 |
|
Jeeps |
87,203 |
12,331 |
10,693 |
23,419 |
41,024 |
71,656 |
36,282 |
|
Omni Buses |
2,765 |
44 |
- |
- |
36,513 |
30,488 |
- |
|
Tractors |
373,373 |
3,898 |
10,969 |
15,136 |
119,340 |
9,004 |
328,380 |
|
Trailors |
- |
62 |
561 |
12,512 |
120,185 |
1,913 |
164,933 |
|
Others |
17,078 |
1,665 |
1,626 |
5,799 |
55,405 |
19,102 |
11,308 |
|
Total non-commercial |
2,279,718 |
222,204 |
351,647 |
1,086,782 |
3,523,322 |
2,106,883 |
3,565,124 |
|
Type of Vehicle |
Maharashtra |
Manipur |
Meghalaya |
Mizoram |
Nagaland |
Orissa |
Punjab |
|
Multiaxled/Articulated Vehicles/Trucks & Lorries |
243,113 |
5,963 |
14,028 |
3,215 |
41,019 |
50,496 |
75,921 |
|
Light Motor Vehicles (goods) |
256,082 |
1,206 |
- |
1,255 |
9,243 |
35,543 |
34,645 |
|
Buses |
49,092 |
2,403 |
2,827 |
840 |
3,505 |
13,966 |
18,579 |
|
Taxis |
102,475 |
363 |
5,030 |
3,864 |
4,448 |
24,614 |
11,982 |
|
Light Motor Vehicles (passenger) |
493,142 |
2,521 |
2,934 |
1,145 |
8,291 |
21,893 |
36,838 |
|
Total Commercial |
1,143,904 |
12,456 |
24,819 |
10,319 |
66,506 |
146,512 |
177,965 |
|
Two Wheelers |
6,216,794 |
75,333 |
21,050 |
19,501 |
36,741 |
1,223,573 |
2,587,181 |
|
Cars |
924,006 |
8,030 |
14,595 |
4,850 |
33,273 |
62,553 |
267,379 |
|
Jeeps |
262,741 |
7,872 |
9,401 |
6,765 |
21,649 |
26,527 |
32,797 |
|
Omni Buses |
12,609 |
570 |
- |
- |
207 |
2,238 |
- |
|
Tractors |
201,940 |
1,263 |
441 |
209 |
1,827 |
30,592 |
459,014 |
|
Trailors |
190,628 |
580 |
2,304 |
254 |
696 |
24,181 |
410 |
|
Others |
16,111 |
221 |
772 |
247 |
11,018 |
8,806 |
4,354 |
|
Total non-commercial |
7,824,829 |
93,869 |
48,563 |
31,826 |
105,411 |
1,378,470 |
3,351,135 |
|
Type of Vehicle |
Rajasthan |
Sikkim |
Tamil Nadu |
Tripura |
Uttarakhand |
Uttar Pradesh |
West Bengal |
|
Multiaxled/Articulated Vehicles/Trucks & Lorries |
173,552 |
1,619 |
276,235 |
6,321 |
9,799 |
94,482 |
241,035 |
|
Light Motor Vehicles (goods) |
13,601 |
353 |
204,314 |
595 |
5,662 |
57,681 |
- |
|
Buses |
55,936 |
406 |
76,907 |
1,596 |
4,626 |
26,437 |
41,385 |
|
Taxis |
32,868 |
4,947 |
116,373 |
257 |
13,385 |
30,193 |
67,918 |
|
Light Motor Vehicles (passenger) |
64,580 |
- |
154,192 |
12,162 |
6,799 |
78,067 |
38,289 |
|
Total Commercial |
340,537 |
7,325 |
828,021 |
20,931 |
40,271 |
286,860 |
388,627 |
|
Two Wheelers |
2,692,175 |
4,682 |
6,734,205 |
44,241 |
391,251 |
4,922,047 |
1,581,326 |
|
Cars |
203,991 |
1,870 |
731,380 |
8,672 |
42,220 |
391,443 |
494,505 |
|
Jeeps |
128,056 |
2,863 |
53,987 |
- |
6,452 |
97,821 |
- |
|
Omni Buses |
- |
487 |
19,957 |
- |
787 |
14,736 |
- |
|
Tractors |
407,523 |
9 |
90,886 |
147 |
31,981 |
718,082 |
48,341 |
|
Trailors |
57,013 |
- |
39,910 |
1,015 |
898 |
10,021 |
- |
|
Others |
4,511 |
- |
76,895 |
541 |
2,122 |
19,188 |
35,164 |
|
Total non-commercial |
3,493,269 |
9,911 |
7,747,220 |
54,616 |
475,711 |
6,173,338 |
2,159,336 |
Source: Department of Road Transport & Highways, - Not indicated, ¹data related to 1997-1998, ²data related to 2002-2003, ³Figures related to 2001-2002, *ImaginMor estimates
Geographical Segmentation: Category-wise registration in Union Territories of India
|
Type of Vehicle |
Andaman & Nicobar Islands |
Chandigarh |
Dadra & Nagar Haveli |
Daman & Diu |
Delhi |
Lakshadweep |
Pondicherry |
|
Multiaxled/Articulated Vehicles/Trucks & Lorries |
1,519 |
1,671 |
5,487 |
1,896 |
75,601 |
- |
6,588 |
|
Light Motor Vehicles (goods) |
- |
7,459 |
1,190 |
1,829 |
75,947 |
270 |
2,923 |
|
Buses |
459 |
1,239 |
154 |
361 |
36,059 |
- |
1,831 |
|
Taxis |
436 |
1,173 |
108 |
43 |
24,712 |
- |
1,421 |
|
Light Motor Vehicles (passenger) |
784 |
- |
500 |
890 |
20,893 |
408 |
4,283 |
|
Total Commercial |
3,198 |
11,542 |
7,439 |
5,019 |
233,212 |
678 |
17,046 |
|
Two Wheelers |
21,743 |
416,917 |
17,881 |
30,351 |
2,665,750 |
3,978 |
235,438 |
|
Cars |
1,693 |
157,612 |
9,270 |
12,278 |
1,192,389 |
78 |
47,642 |
|
Jeeps |
1,033 |
- |
429 |
295 |
122,283 |
85 |
3,838 |
|
Omni Buses |
- |
- |
6 |
38 |
8,386 |
5 |
2,545 |
|
Tractors |
261 |
36 |
44 |
165 |
4,851 |
44 |
318 |
|
Trailors |
67 |
- |
46 |
124 |
99 |
- |
1,582 |
|
Others |
461 |
- |
- |
30 |
9,705 |
503 |
4,541 |
|
Total non-commercial |
25,258 |
574,565 |
27,676 |
43,281 |
4,003,463 |
4,693 |
295,904 |
Source: Department of Road Transport & Highways, - Not indicated
Appendix 2: Detailed Central VAT (CENVAT) and Customs Tax for Automobiles
Detailed Central VAT (CENVAT) or Excise Tax for Automobiles for year 2007
|
|
Description of goods |
Unit |
Rate of duty |
|
1. |
TRACTORS |
||
|
|
Pedestrian controlled tractors |
U |
16% |
|
|
Road tractors for semi-trailers : |
|
|
|
|
Of engine capacity not exceeding 1,800 cc |
U |
16% |
|
|
Other |
U |
16% |
|
|
Track-laying tractors : |
|
|
|
|
Garden tractors of engine capacity not exceeding 1,800 cc |
U |
16% |
|
|
Other Garden tractors |
U |
16% |
|
|
Other Track-layingtractors of engine capacity not exceeding 1,800cc |
U |
16% |
|
|
Other Track-layingtractors of engine capacity more than 1,800cc |
U |
16% |
|
|
Other tractors of engine capacity not exceeding 1,800 cc |
U |
16% |
|
|
Other tractors of engine capacity more than 1,800 cc |
U |
16% |
|
|
|
|
|
|
2. |
MOTOR VEHICLES FOR THE TRANSPORT OF TEN OR MORE PERSONS, INCLUDING THE DRIVER |
||
|
|
Vehicles for transport of not more than thirteen persons, including the driver, with compression-ignition internal combustion piston engine (diesel or semi-diesel) : |
|
|
|
|
Integrated monocoque vehicle |
U |
24% |
|
|
Air-conditioned vehicle |
U |
24% |
|
|
Other vehicles with compression-ignition internal combustion piston engine (diesel or semi-diesel) |
U |
24% |
|
|
Other vehicles for transport of not more than thirteen persons, including the driver: |
|
|
|
|
Integrated monocoque vehicle |
U |
24% |
|
|
Air-conditioned vehicle |
U |
24% |
|
|
Electrically operated |
U |
24% |
|
|
Other |
U |
24% |
|
|
|
|
|
|
3. |
MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS (OTHER THAN THOSE OF HEADING 2), INCLUDING STATION WAGONS AND RACING CARS |
||
|
|
Vehicles specially designed for travelling on snow; golf cars and similar vehicles: |
|
|
|
|
Electrically operated |
U |
24% |
|
|
Other |
U |
24% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, Of a cylinder capacity not exceeding 1,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other vehicle Of a cylinder capacity not exceeding 1,000 cc (excluding which are already mentioned) |
U |
24% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Other vehicle of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc (excluding which are already mentioned above) |
U |
24% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Other vehicle of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc (excluding which are already mentioned above) |
U |
24% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 3,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Other vehicle of a cylinder capacity exceeding 3,000 cc (excluding which are already mentioned above) |
U |
24% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), of a cylinder capacity not exceeding1,500 cc: |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other vehicle Of a cylinder capacity not exceeding 1,500 cc (excluding which are already mentioned) |
U |
24% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other vehicle Of a cylinder exceeding 1,500 cc but not exceeding 2,500 cc (excluding which are already mentioned) |
U |
24% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), Of a cylinder capacity exceeding 2,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
24% |
|
|
Three-wheeled vehicles |
U |
24% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
24% |
|
|
Other Motor cars |
U |
24% |
|
|
Other vehicle of a cylinder capacity exceeding 2,500 cc (excluding which are already mentioned above) |
U |
24% |
|
|
Electrically operated |
U |
24% |
|
|
|
|
|
|
4. |
MOTOR VEHICLES FOR THE TRANSPORT OF GOODS |
||
|
|
Dumpers designed for off-highway use: |
|
|
|
|
With net weight (excluding pay-load) exceeding 8 tonnes and maximum pay-load capacity not less than 10 tonnes |
U |
16% |
|
|
Other Dumpers designed for off-highway use |
U |
24% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight not exceeding 5 tonnes: |
|
|
|
|
Refrigerated |
U |
16% |
|
|
Three-wheeled motor vehicles |
U |
16% |
|
|
Other vehicles with gross vehicle weight not exceeding 5 tonnes |
U |
16% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes: |
|
|
|
|
Lorries and trucks refrigerated |
U |
16% |
|
|
Other lorries and trucks |
U |
16% |
|
|
Other vehicles with gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes |
U |
16% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight exceeding 20 tonnes: |
|
|
|
|
Lorries and trucks refrigerated |
U |
16% |
|
|
Other lorries and trucks |
U |
16% |
|
|
Other vehicles with gross vehicle weight exceeding 20 tonnes |
U |
16% |
|
|
Other, with spark-ignition internal combustion piston engine, gross vehicle weight not exceeding 5 tonnes |
|
|
|
|
Refrigerated |
U |
24% |
|
|
Three-wheeled motor vehicles |
U |
16% |
|
|
Other vehicles with gross vehicle weight not exceeding 5 tonnes |
U |
24% |
|
|
Other, with spark-ignition internal combustion piston engine, gross vehicle weight exceeding 5 tonnes |
|
|
|
|
Lorries and trucks refrigerated |
U |
24% |
|
|
Other lorries and trucks |
U |
24% |
|
|
Other vehicles with gross vehicle weight exceeding 5 tonnes |
U |
24% |
|
|
Electrically operated |
U |
24% |
|
|
|
|
|
|
5. |
SPECIAL PURPOSE MOTOR VEHICLES, OTHER THAN THOSE PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS OR GOODS |
||
|
|
Crane lorries |
U |
16% |
|
|
Mobile drilling derricks |
U |
16% |
|
|
Fire fighting vehicles |
U |
16% |
|
|
Concrete-mixer lorries |
U |
16% |
|
|
Other Special Purpose motor Vehicles |
U |
16% |
|
|
|
|
|
|
6. |
MOTORCYCLES (INCLUDING MOPEDS) AND CYCLES FITTED WITH AN AUXILIARY MOTOR, WITH OR WITHOUT SIDE-CARS |
||
|
|
With reciprocating internal combustion piston engine of a cylinder capacity not exceeding 50cc: |
|
|
|
|
Mopeds |
U |
16% |
|
|
Motorised cycles |
U |
16% |
|
|
Other motorcycles with cylinder capacity not exceeding 50cc |
U |
16% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc : |
|
|
|
|
Scooters |
U |
16% |
|
|
Motorcycles |
U |
16% |
|
|
Mopeds |
U |
16% |
|
|
Other |
U |
16% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 250 cc but not exceeding 500 cc : |
|
|
|
|
Scooters |
U |
16% |
|
|
Motorcycles |
U |
16% |
|
|
Other |
U |
16% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 500 cc but not exceeding 800 cc : |
|
|
|
|
Motorcycles |
U |
16% |
|
|
Other |
U |
16% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 800 cc: |
|
|
|
|
Motorcycles |
U |
16% |
|
|
Other |
U |
16% |
|
|
Other Motorcycles: |
|
|
|
|
Side-cars |
U |
16% |
|
|
Electrically operated |
U |
16% |
|
7. |
CARRIAGES FOR DISABLED PERSONS, WHETHER OR NOT MOTORISED OR OTHERWISE MECHANICALLY PROPELLED |
||
|
|
Not mechanically propelled : |
|
|
|
|
Wheel chairs for invalid |
U |
Nil |
|
|
Other Not mechanically propelled |
U |
Nil |
|
|
Other Carriages for disabled persons |
|
|
|
|
Wheel chairs for invalid |
U |
Nil |
|
|
Other |
U |
Nil |
Source: Central Board of Excise and Customers – Government of India
Detailed Customs Tax for Automobiles for year 2007
|
|
Description of goods |
Unit |
Rate of duty |
|
1. |
TRACTORS |
||
|
|
Pedestrian controlled tractors |
U |
12.5% |
|
|
Road tractors for semi-trailers : |
|
|
|
|
Of engine capacity not exceeding 1,800 cc |
U |
12.5% |
|
|
Other |
U |
12.5% |
|
|
Track-laying tractors : |
|
|
|
|
Garden tractors of engine capacity not exceeding 1,800 cc |
U |
12.5% |
|
|
Other Garden tractors |
U |
12.5% |
|
|
Other Track-layingtractors of engine capacity not exceeding 1,800 cc |
U |
12.5% |
|
|
Other Track-layingtractors of engine capacity more than 1,800 cc |
U |
12.5% |
|
|
Other tractors of engine capacity not exceeding 1,800 cc |
U |
12.5% |
|
|
Other tractors of engine capacity more than 1,800 cc |
U |
12.5% |
|
|
|
|
|
|
2. |
MOTOR VEHICLES FOR THE TRANSPORT OF TEN OR MORE PERSONS, INCLUDING THE DRIVER |
||
|
|
Vehicles for transport of not more than thirteen persons, including the driver, with compression-ignition internal combustion piston engine (diesel or semi-diesel) : |
|
|
|
|
Integrated monocoque vehicle |
U |
12.5% |
|
|
Air-conditioned vehicle |
U |
12.5% |
|
|
Other vehicles with compression-ignition internal combustion piston engine (diesel or semi-diesel) |
U |
12.5% |
|
|
Other vehicles for transport of not more than thirteen persons, including the driver: |
|
|
|
|
Integrated monocoque vehicle |
U |
12.5% |
|
|
Air-conditioned vehicle |
U |
12.5% |
|
|
Electrically operated |
U |
12.5% |
|
|
Other |
U |
12.5% |
|
|
|
|
|
|
3. |
MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS (OTHER THAN THOSE OF HEADING 2), INCLUDING STATION WAGONS AND RACING CARS |
||
|
|
Vehicles specially designed for travelling on snow; golf cars and similar vehicles: |
|
|
|
|
Electrically operated |
U |
100% |
|
|
Other |
U |
100% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, Of a cylinder capacity not exceeding 1,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other vehicle Of a cylinder capacity not exceeding 1,000 cc (excluding which are already mentioned) |
U |
100% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Other vehicle of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc (excluding which are already mentioned above) |
U |
100% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Other vehicle of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc (excluding which are already mentioned above) |
U |
100% |
|
|
Other vehicles, with spark-ignition internal combustion reciprocating piston engine, of a cylinder capacity exceeding 3,000 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Other vehicle of a cylinder capacity exceeding 3,000 cc (excluding which are already mentioned above) |
U |
100% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), of a cylinder capacity not exceeding1,500 cc: |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other vehicle Of a cylinder capacity not exceeding 1,500 cc (excluding which are already mentioned) |
U |
100% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other vehicle Of a cylinder exceeding 1,500 cc but not exceeding 2,500 cc (excluding which are already mentioned) |
U |
100% |
|
|
Other vehicles, with compression ignition internal combustion piston engine (diesel or semi-diesel), Of a cylinder capacity exceeding 2,500 cc : |
|
|
|
|
Vehicles principally designed for the transport of more than seven persons, including the driver |
U |
100% |
|
|
Three-wheeled vehicles |
U |
100% |
|
|
Specialised transport vehicles such as ambulances, prison vans and the like |
U |
100% |
|
|
Other Motor cars |
U |
100% |
|
|
Other vehicle of a cylinder capacity exceeding 2,500 cc (excluding which are already mentioned above) |
U |
100% |
|
|
Electrically operated |
U |
100% |
|
4. |
MOTOR VEHICLES FOR THE TRANSPORT OF GOODS |
||
|
|
Dumpers designed for off-highway use: |
|
|
|
|
With net weight (excluding pay-load) exceeding 8 tonnes and maximum pay-load capacity not less than 10 tonnes |
U |
12.5% |
|
|
Other Dumpers designed for off-highway use |
U |
12.5% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight not exceeding 5 tonnes: |
|
|
|
|
Refrigerated |
U |
12.5% |
|
|
Three-wheeled motor vehicles |
U |
12.5% |
|
|
Other vehicles with gross vehicle weight not exceeding 5 tonnes |
U |
12.5% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes: |
|
|
|
|
Lorries and trucks refrigerated |
U |
12.5% |
|
|
Other lorries and trucks |
U |
12.5% |
|
|
Other vehicles with gross vehicle weight exceeding 5 tonnes but not exceeding 20 tonnes |
U |
12.5% |
|
|
Other, with compression-ignition internal combustion piston engine (diesel or semi-diesel), gross vehicle weight exceeding 20 tonnes: |
|
|
|
|
Lorries and trucks refrigerated |
U |
12.5% |
|
|
Other lorries and trucks |
U |
12.5% |
|
|
Other vehicles with gross vehicle weight exceeding 20 tonnes |
U |
12.5% |
|
|
Other, with spark-ignition internal combustion piston engine, gross vehicle weight not exceeding 5 tonnes |
|
|
|
|
Refrigerated |
U |
12.5% |
|
|
Three-wheeled motor vehicles |
U |
12.5% |
|
|
Other vehicles with gross vehicle weight not exceeding 5 tonnes |
U |
12.5% |
|
|
Other, with spark-ignition internal combustion piston engine, gross vehicle weight exceeding 5 tonnes |
|
|
|
|
Lorries and trucks refrigerated |
U |
12.5% |
|
|
Other lorries and trucks |
U |
12.5% |
|
|
Other vehicles with gross vehicle weight exceeding 5 tonnes |
U |
12.5% |
|
|
Electrically operated |
U |
12.5% |
|
|
|
|
|
|
5. |
SPECIAL PURPOSE MOTOR VEHICLES, OTHER THAN THOSE PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS OR GOODS |
||
|
|
Crane lorries |
U |
12.5% |
|
|
Mobile drilling derricks |
U |
12.5% |
|
|
Fire fighting vehicles |
U |
12.5% |
|
|
Concrete-mixer lorries |
U |
12.5% |
|
|
Other Special Purpose motor Vehicles |
U |
12.5% |
|
|
|
|
|
|
6. |
MOTORCYCLES (INCLUDING MOPEDS) AND CYCLES FITTED WITH AN AUXILIARY MOTOR, WITH OR WITHOUT SIDE-CARS |
||
|
|
With reciprocating internal combustion piston engine of a cylinder capacity not exceeding 50cc: |
|
|
|
|
Mopeds |
U |
100% |
|
|
Motorised cycles |
U |
100% |
|
|
Other motorcycles with cylinder capacity not exceeding 50cc |
U |
100% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc : |
|
|
|
|
Scooters |
U |
100% |
|
|
Motorcycles |
U |
100% |
|
|
Mopeds |
U |
100% |
|
|
Other |
U |
100% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 250 cc but not exceeding 500 cc : |
|
|
|
|
Scooters |
U |
100% |
|
|
Motorcycles |
U |
100% |
|
|
Other |
U |
100% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 500 cc but not exceeding 800 cc : |
|
|
|
|
Motorcycles |
U |
100% |
|
|
Other |
U |
100% |
|
|
With reciprocating internal combustion piston engine of a cylinder capacity exceeding 800 cc: |
|
|
|
|
Motorcycles |
U |
100% |
|
|
Other |
U |
100% |
|
|
Other Motorcycles: |
|
|
|
|
Side-cars |
U |
100% |
|
|
Electrically operated |
U |
100% |
|
|
|
|
|
|
7. |
CARRIAGES FOR DISABLED PERSONS, WHETHER OR NOT MOTORISED OR OTHERWISE MECHANICALLY PROPELLED |
||
|
|
Not mechanically propelled : |
|
|
|
|
Wheel chairs for invalid |
U |
12.5% |
|
|
Other Not mechanically propelled |
U |
12.5% |
|
|
Other Carriages for disabled persons |
|
|
|
|
Wheel chairs for invalid |
U |
12.5% |
|
|
Other |
U |
12.5% |
Source: Central Board of Excise and Customers – Government of India
Appendix 3: Detailed Market Share of Major Players
Source: Society of Indian Automotive Manufacturing (SIAM)
Source: Society of Indian Automotive Manufacturing (SIAM)
World Production – Cars
|
Country |
2006 |
2007 |
Percentage Change |
|
Japan |
9,756,515 |
9,944,637 |
1.93 |
|
China |
5,233,132 |
6,381,116 |
21.94 |
|
Germany |
5,398,508 |
5,709,139 |
5.75 |
|
USA |
4,366,220 |
3,924,268 |
-10.12 |
|
South Korea |
3,489,136 |
3,723,482 |
6.72 |
|
France |
2,723,196 |
2,550,869 |
-6.33 |
|
Brazil |
2,092,029 |
2,388,402 |
14.17 |
|
Spain |
2,078,639 |
2,195,780 |
5.64 |
|
India |
1,473,000 |
1,707,839 |
15.94 |
|
UK |
1,442,085 |
1,534,567 |
6.41 |
|
Canada |
1,389,536 |
1,342,133 |
-3.41 |
|
Russia |
1,177,918 |
1,288,652 |
9.40 |
|
Mexico |
1,097,619 |
1,209,097 |
10.16 |
|
Czech Rep. |
848,922 |
925,778 |
9.05 |
|
Italy |
892,502 |
910,860 |
2.06 |
|
Iran |
800,000 |
882,000 |
10.25 |
|
Belgium |
881,929 |
789,674 |
-10.46 |
|
Poland |
632,300 |
695,000 |
9.92 |
|
Turkey |
545,682 |
634,883 |
16.35 |
|
Slovakia |
295,391 |
571,071 |
93.33 |
|
Others |
376,110 |
429,430 |
14.18 |
|
Ukraine |
274,860 |
380,061 |
38.27 |
|
Argentina |
263120 |
350,735 |
33.30 |
|
Malaysia |
377,952 |
347,971 |
-7.93 |
|
Sweden |
288,583 |
316,850 |
9.80 |
|
Thailand |
298,819 |
315,444 |
5.56 |
|
Indonesia |
256,285 |
309,208 |
20.65 |
|
Hungary |
187,633 |
287,982 |
53.48 |
|
Australia |
270,000 |
283,348 |
4.94 |
|
South Africa |
334,482 |
276,018 |
-17.48 |
|
Romania |
201,663 |
234,103 |
16.09 |
|
Taiwan |
211,306 |
212,685 |
0.65 |
|
Austria |
248,059 |
199,969 |
-19.39 |
|
Slovenia |
115,000 |
174,209 |
51.49 |
|
Uzbekistan |
100,000 |
170,000 |
70.00 |
|
Portugal |
143,478 |
134,047 |
-6.57 |
|
Egypt |
59,462 |
67,149 |
12.93 |
|
Netherland |
87,332 |
61,912 |
-29.11 |
|
Finland |
32,417 |
24,000 |
-25.96 |
|
Serbia |
9,832 |
8,236 |
-16.23 |
|
Total |
49,918,578 |
53,049,391 |
6.27 |
Source: The International Organization of Motor Vehicle Manufacturers (OICA)
World Production – Commercial Vehicles
|
Country |
2006 |
2007 |
Percentage Change |
|
Japan |
6,897,766 |
6,856,461 |
1.93 |
|
China |
1,955,576 |
2,501,340 |
21.94 |
|
Germany |
1,727,718 |
1,651,690 |
5.75 |
|
USA |
1,182,756 |
1,236,105 |
-10.12 |
|
South Korea |
895,607 |
971,902 |
6.72 |
|
France |
947,899 |
886,148 |
-6.33 |
|
Brazil |
698,796 |
693,923 |
14.17 |
|
Spain |
546,808 |
598,929 |
5.64 |
|
India |
519,005 |
582,416 |
15.94 |
|
UK |
421,106 |
504,321 |
6.41 |
|
Canada |
446,023 |
464,985 |
-3.41 |
|
Russia |
442,098 |
464,531 |
9.40 |
|
Mexico |
319,092 |
373,452 |
10.16 |
|
Czech Rep. |
330,440 |
371,468 |
9.05 |
|
Italy |
350,966 |
362,826 |
2.06 |
|
Iran |
253,237 |
258,472 |
10.25 |
|
Belgium |
206,303 |
215,686 |
-10.46 |
|
Poland |
168,981 |
193,912 |
9.92 |
|
Turkey |
155,496 |
168,466 |
16.35 |
|
Slovakia |
104,500 |
115,240 |
93.33 |
|
Others |
40,777 |
103,580 |
14.18 |
|
Ukraine |
125,021 |
93,690 |
38.27 |
|
Argentina |
82,300 |
89,700 |
33.30 |
|
Malaysia |
72,122 |
76,656 |
-7.93 |
|
Sweden |
91,915 |
70,354 |
9.80 |
|
Thailand |
60,900 |
51,269 |
5.56 |
|
Indonesia |
44,585 |
49,170 |
20.65 |
|
Hungary |
36,127 |
44,729 |
53.48 |
|
Australia |
83,847 |
42,195 |
4.94 |
|
South Africa |
32,056 |
36,403 |
-17.48 |
|
Romania |
26,873 |
28,097 |
16.09 |
|
Taiwan |
35,320 |
24,193 |
0.65 |
|
Austria |
20,400 |
22,530 |
-19.39 |
|
Slovenia |
10,000 |
14,900 |
51.49 |
|
Uzbekistan |
5,985 |
12,749 |
70.00 |
|
Portugal |
11,934 |
7,609 |
-6.57 |
|
Egypt |
3,190 |
4,045 |
12.93 |
|
Netherland |
1,350 |
1,667 |
-29.11 |
|
Finland |
353 |
303 |
-25.96 |
|
Total |
19,304,397 |
20,103,305 |
4.14 |
Source: The International Organization of Motor Vehicle Manufacturers (OICA)
Two-Wheeler Production in Major Countries
|
Country |
2005 |
2006 |
Percentage Change |
|
China |
17,236,856 |
21,443,517 |
24.41 |
|
India |
7,600,801 |
8,384,707 |
10.31 |
|
Indonesia |
5,113,487 |
4,458,886 |
-12.80 |
|
Japan |
1,791,585 |
1,771,386 |
-1.13 |
|
Brazil |
1,213,517 |
1,413,268 |
16.46 |
|
Thailand |
1,478,296 |
1,334,970 |
-9.70 |
|
Vietnam |
624,664 |
790,500 |
26.55 |
|
Italy |
702,700 |
723,600 |
2.97 |
|
Malaysia |
400,084 |
432,399 |
8.08 |
|
Colombia |
235,000 |
425,987 |
81.27 |
Source: Society of Indian Automotive Manufacturing (SIAM)
References
Ashok Leyland
Automobile India
Bajaj Auto
Central Board of Excise and Customers – Government of India
Department of Heavy Industry
Department of Heavy Industry & Public Enterprises Government of India
Department of Road Transport & Highways
Hero Honda Motors
Inderscience Enterprises Ltd.
Mahindra & Mahindra
Maruti Suzuki
Ministry of Commerce and Industry
National Accounts Division
National Information Centre
Quantum Information Services Ltd.
Silicon India
Society of Indian Automotive Manufacturing (SIAM)
The Truth About Cars
The International Organization of Motor Vehicle Manufacturers (OICA)
United Nations Industrial Development Organisation
DISCLAMER
The product has been supplied by Imagin Mor Pty Ltd (“ImaginMor”) solely for use by its authorised licences. ImaginMor makes no representation to any person with regards to the completeness or accuracy of the information and data contained herein, and accepts no responsibility and disclaims all liability for loss or damage whatsoever suffered or incurred by other person resulting from the use of, or reliance upon, the information or data contained herein. Copyright in this publication is owned by Imagin Mor Pty Ltd. The publication is made available on the basis that the user agrees not to copy the material contained within it for other than the users own purpose. In the event of users use or quote from the material in this publication – in papers, reports, or opinions prepared for any other person – it is agreed that it will be sourced to: ImaginMor.
