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  1. 1. UNION BUDGET 2013 effect on Indian automotive sector Parvez Onkar Mithilesh Chandani Binod
  2. 2. 2 Layout of presentation Automobile evolution Current scenario conclusion SWOT analysis Budget impact Future growth Key players
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  4. 4. 4 Jeep CJ-3A
  5. 5. 5 Indian automobile history Before independence car were imported in India In 1942 Hindustan Motors Ltd incorporated In 1944 Premier Automobiles Ltd incorporated In 1983 Maruti Udyog ltd was started in collaboration with Suzuki
  6. 6. 6 Post globalization In 1991 new industrial policy was announced radical changes being made bearing on trade, foreign investment, exchange rate, industry, fiscal affairs death of the License Raj and the Automobile Industry was allowed to expand Mass Emission standard National Highway policy
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  8. 8. 8 Current market situation The Indian automotive industry has emerged as a 'sunrise sector' in the Indian economy India is the second fastest growing automobile market in the world after China Car segment is growing @ 19% annually but is now seeing flat or negative growth rate Stands 1 in two-wheeler sector
  9. 9. 9 Key Indian companies Company name Product manufactured Manufacturing location Total turnover In blln USD $ TATA Cars, CVs Pune, Jamshedpur, Ahmedabad 27.6 Maruti suzuki cars Gurgaon 7.5 M&M CVs Nasik, Zahirabad, chennai 7.4 Hero moto corp motorcycles Gurgaon 3.9 Bajaj auto motorcycles Pune, Pantnagar, Aurangabad 3.39 Ashok Leyland CVs Hosur, Pantnagar,Alwar 2.5
  10. 10. 10 Foreign AM companies in INDIA Nearly all OEMs are present in INDIA with substantial investment
  11. 11. 11 MAIN SEGMENTS IN THE INDIAN AUTOMOTIVE INDUSTRY 1. Passenger vehicles: I. Cars and buses 2. Commercial vehicles: I. Light commercial vehicles Goods carrier II. Multi Utility Vehicles, Sports Utility and mini vans III. Heavy commercial vehicles Trucks, Tempo, IV. Tractor and Tipper/Dumper 3. Three wheelers: I. Rickshaws, Trolleys, Delivery Vans and Tipper 4. Two wheelers: I. Scooters, Motorcycles and Mopeds
  12. 12. 12 Market share
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  16. 16. 16 Strengths Weakness Investments by foreign car manufacturers Increase in the export levels Low cost and cheap labor Rise in the working and middle class income Increasing demand for European quality Large pool of engineers Low quality compared to other automotive countries Low labor productivity High interest rate and overhead level Production cost are generally higher than some other Asian states, such as China Low investment in R&D area
  17. 17. 17 Opportunities Threats Growing population in the country Focus from the government in improving the road infrastructure Rising living standards Increase in income level Better car technology is demanded Rising rural demand Less skilled labor Lack of technologies for Indian companies Increase in the import tariff and technology cost Imports of two wheelers from the Chinese market in India Smaller players that do not fulfill international standards Increased congestion in the urban areas
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  19. 19. 19 Budget expectation Overall, we expect the Budget to be broadly Neutral for the Automobile sector
  20. 20. 20 Budget impact 13-14
  21. 21. 21 Budget impact - negative I. Budget 201314 disappointed automobile sector. II. It was clearly ignored by the policy makers. III. It was expecting some relief in terms of:- a) Export soaps. b) Reduction in excise duty. c) Higher depreciation allowance. d) Deduction for R&D expenses. IV. Automobile sector is a job multiplier sector. V. Apart from OEMs, auto component industry, motor insurance industry and other related industries provide millions of job. VI. Opportunities:-important sector to focus and give incentive in domestic market but also to be competitive from export point of view.
  22. 22. 22 BUDGET 2012-13 OVER ALL POSITIVE FOR GROWTH No levy of additional specific excise duty on diesel vehicles, contrary to the expectations. Basic excise duty hiked from 10% to 12%. Excise duty on large cars (SUVs & MUVS ) increased by 2% to 24%. Removal of specific duty of Rs.15000, set off with an additional duty of 3%, taking the total duty for large cars at 27%. Hike on imported duty from 60% - 75% for assembled SUVs and MUV costing more than Rs 20 lakhs. Increase in custom duty from 10% - 30% on bicycles and from 10% - 20% on bicycle parts.
  23. 23. 23 UNION BUDGET 2012-13: Impact Analysis
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  25. 25. 25 CONCLUSION: The industry has recorded phenomenon growth during the last decade. Contributing 4.5% to GDP Third largest exporter of automobile resource availability , skilled manpower huge pool of middle class are major drivers Employing more than 10 million people
  26. 26. 26 CONCLUSION: Challenges -petrol price hikes -regulatory policies -infrastructure Stands 128 on doing business index In 2020 India will produce 40000 vehicle, & become worlds largest manufacturer Renewable resources can be used
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