Economic Diplomacy Division Ministry of External Affairs Indian Auto Industry Economic Diplomacy Division Ministry of External Affairs

Where does India stand? Largest TRACTOR manufacturer Largest TWO WHEELER manufacturer 2nd Largest BUS manufacturer 3rd Largest HEAVY TRUCK manufacturer 6th Largest CAR manufacturer 6th Largest COMMERCIAL VEHICLE manufacturer Source: SIAM

Low Vehicle Penetration Vehicle Market Share Segment Market Share Passenger Vehicles 14% Commercial Vehicles 3% Three Wheelers Two Wheelers 80% Low Vehicle Penetration Segment Vehicle per 1000 persons Passenger Vehicles 20 Two-wheelers 108 Buses 0.11

Auto Clusters North East West South Eicher Mahindra Escorts Mazda Hero Motor New Holland Honda Motorcycle Suzuki Motorcycles Honda Cars ICML Tata Motors JCB Yamaha Maruti Suzuki Cities: Delhi, Gurgaon, Noida, Ghaziabad, Ludhiana, Haridwar Illustrative list of manufacturing facilities of Indian and Global OEMs North Tata Cummins Tata Motors Cities: Kolkata East Cities: Baroda, Halol, Sanand, Mumbai, Pune, Nashik, Aurangabad. West Ashok Leyland Royal Enfield BMW Same Deutz Caterpillar TAFE Daimler Tata Motors Ford Toyota Kirloskar Hyundai TVS Nissan Volvo Buses Renault Cities: Chennai, Hosur, Bengaluru Bajaj Auto Mercedes Benz Fiat Skoda Force Motors Tata Hitachi GM Tata Motors John Deere Volkswagen Mahindra Volvo Eicher Suzuki Ford Honda Motorcycle South

Passenger Vehicles Production Units of vehicles expressed in ’000 units Figures for financial year – April to March Passenger Vehicles Production CAGR 2013-17: 4%

Construction Vehicles Other Vehicles Production Units of vehicles expressed in ’000 units Figures for financial year – April to March Commercial Vehicles Tractors CAGR 2013-17: -1% CAGR 2012-16: -3% Two & Three Wheelers Construction Vehicles CAGR 2013-17: 6% CAGR 2012-16: 3%

Top 5 players in Each Segment in 2016-17 Passenger Vehicles : +9.23% Commercial Vehicles : +4.16% Leading Players Maruti Suzuki (47%) Hyundai Motor (17%) Mahindra (8%) Tata Motors (6%) Honda Cars (5%) Leading Players Tata Motors (43%) Mahindra & Mahindra(25%) Ashok Leyland (19%) VECVs - Eicher (7%) Force Motors (3%) Two Wheelers : +6.89% Three Wheelers : -4.9% Leading Players Hero MotoCorp (37%) Honda MSI (27%) TVS Motor (14%) Bajaj Auto (11%) India Yamaha (5%) Leading Players Bajaj Auto (50%) Piaggio Vehicles(30%) Mahindra (10%) Atul Auto (7%) TVS Motor (2%) Note: FY means 12 month ending March

Auto Component Industry: 2015-2016 USD 39.0 billion Turnover 3.5% - 4% Contribution to GDP USD 10.81 billion Foreign Exchange Earnings/ Exports 4% Share of India’s Exports USD 6.8 billion Domestic Aftermarket 1.50 million Direct Employment

Auto Component Industry Turnover: 2015-16 CAGR: 6% 2556 (39.0) 2348 (38.5) 2160 (39.7) 2117 (35.1) 2046 (42.2) 1883 (41.3) Turnover in INR’ 00 Crore (USD Billion) Growth Rate in Rupee Terms (Turnover includes supplies to OEMs, aftermarket sales and exports)

Auto Components Supply to OEMs Small Commercial Vehicles (SCV) Less than 2 T Light Commercial Vehicle (LCV) 2 to 7.5 T Maneuver Combat Vehicle (MCV) 7.5 to 16 T Heavy Commercial Vehicle (HCV) More than 16 T OEMs consumption includes locally produced Components and Imports

Exports Destinations: Top 10 Countries in % Exports - Auto Component Industry: 2015-16 CAGR: 18% 685 (11.2) 709 (10.8) 615 (10.2) 527 (9.7) 427 (8.8) Turnover in INR’ 00 Crore (USD Billion) \ 303 (6.7) Exports Destinations: Top 10 Countries in % USA 25 Thailand 3.18 Germany 6.96 UAE 3.15 Turkey 6.22 France 2.99 UK 5.43 Brazil 2.62 Italy 3.86 Mexico 2.59

Indian Auto components already driving on international roads Increased Component Outsourcing (Illustrative List) Over 35 IPOs of Global OEMs & Tier 1 Procuring from India OEMs BMW Caterpillar Ford FIAT GM John Deere MAN Mercedes-Benz Nissan Peugeot Renault Toyota Volkswagen Tier 1 Component Manufacturers Bosch Continental Cummins DANA Delphi Denso Eaton Getrag GE Kohler Kolbenschmidt Magna Meritor TRW Valeo Indian Auto components already driving on international roads 12

Strengths & Challenges of Indian Component Suppliers

Indian Suppliers’ Focus – Global Best Practices Industry fast embracing modern shop-floor practices: 5-S; 7-W Kaizen TQM TPM 6 Sigma Lean Manufacturing Focus on Quality Deming Award – 16 Japan Quality Medal – 5 TPM Award – 15 Shingo Silver Medallion - 2 JIPM – 3 Largest no. of Deming Award winning companies outside Japan

Increasing focus on Innovation and Research Design & Research Centers of leading Global companies in India Bosch Caterpillar Continental Cummins Ford GM Honda Honeywell Hyundai Magna Mercedes Benz Renault Nissan Suzuki Valeo (Illustrative List)

Auto Components Industry Aspirations

Objectives of Automotive Mission Plan 2026 Achieve top-line of USD 260-300 billion Increase export intensity to 35 - 40% Attract investments of USD 70 - 90 billion over the next decade Automotive industry to be the engine of “Make in India” Provide incremental employment to 65 million persons Quality of employment a key feature of this industry Contribute significantly to “Skill India” Focus on promoting safe, efficient and comfortable mobility for every person in the society, with an eye on environmental protection through both public and personal transport option Focus on promoting Mobility

Define a Road map for Implementing policies and regulations Foster the promotion of “Brand India” by developing a sophisticated ecosystem of research, design, engineering and manufacturing that is conducive for a variety of players - both mass market and niche seekers. To rank within the top three of the world in engineering, manufacture and export of vehicles and components Promote India as a preferred destination for every segment of the automotive value chain India & EU norms from current 6-7 years Harmonisation: Clear roadmap to adhere to 1998 Agreement of UN Global Technical Regulations (WP.29) Fuel Efficiency: Define clear roadmap for all categories of vehicles Road Safety: Reduction in accidents and fatalities as per norms specified in Road Transport & Safety Bill. Define a Road map for Implementing policies and regulations

Automotive Mission Plan 2026: Aspirations for Vehicle Industry (million units) Segment 2004-2005 2016-2017 2025-2026 Passenger Vehicles 1.2 3.7 9.4 - 13.4 Commercial Vehicles 0.39 0.8 2.0 - 3.9 Two Wheelers 7.6 18.5 50.6 - 55.5 Three Wheelers 0.43 0.95 2.8 - 3.0 Tractors 0.25 0.6 1.5 - 1.7 Total 9.87 24.55 66.3 - 77.5 Source: Automotive Mission Plan: 2016-26 19

Tax Structure/Regimes in India

Current Excise Duty Structure Vehicle Category Excise Duty Small cars, Commercial Vehicles and Two/Three wheelers 12.5% Length >4m and engine capacity < 1500cc 24% Length >4m and engine capacity > 1500cc 27% SUVs/MUVs with Ground clearance >170mm 30% Hybrid cars Specified components of Hybrid vehicles 6% Electric cars, 2W & 3W and specified components

Completely Built Up (CBU) Completely Knocked Down (CKD) Import Duty Structure Basic Customs Duty Vehicles Completely Built Up (CBU) Completely Knocked Down (CKD) Passenger vehicles 100%*/60 10%/30%+ Two wheelers 75%**/60% Three wheelers 60% Commercial vehicles 20% 10% Components*** 7.5%-10% * With CIF value >US $ 40,000 or engine capacity >3000 cc for petrol and >2500 cc for diesel vehicles, or both. ** For motor cycles with engine capacity of 800 cc or more +CKD containing engine or gearbox or transmission mechanism in pre-assembled form but not mounted on a chassis or a body assembly *** Some components progress down to nil on FTAs

Other Domestic Taxes Tax Category Rate Infra Cess 1%, 2.5%, 4% R & D Cess 0.125% National Calamity Contingent Duty 1% Central Sales Tax (CST) for out of state sale 2% State Value Added Tax (VAT) 12.5% Octroi (in one state only) 4% State Road/Registration Tax 4-20% Infrastructure Cess: 1% on small petrol, LPG, CNG cars, 2.5% on small diesel cars of less than 1500 cc and 4% on other higher engine capacity vehicles and SUVs was levied last year.

Rates Proposed Under GST Vehicle Category GST Rate Passenger Vehicles (Petrol, Diesel, CNG)/Commercial Vehicles/Three-wheelers/Two-wheelers 28% Electric Vehicles 12% Vehicles that would attract GST plus Cess. Cess as provided below: Vehicle Category Cess >4m passenger vehicles (All) 15% <4m passenger vehicles (petrol) 1% <4m passenger vehicles (diesel) 3% >350cc two-wheelers 10 – 13 seater public transport vehicles

Thank You