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Unformatted text preview: 1.Executive summary: Introduction: Demographically and economically, Indias automotive industry is well-positioned for growth, servicing both domestic demand and, increasingly, export opportunities. A predicted increase in Indias working-age population is likely to help stimulate the burgeoning market for private vehicles. Rising prosperity, easier access to finance and increasing affordability is expected to see four-wheelers gaining volumes, although two wheelers will remain the primary choice for the majority of purchasers, buoyed by greater appetite from rural areas, the youth market and women. Domestically, some consolidation or alliances might be expected, driven by the need for access to better technology, manufacturing facilities, service and distribution networks. The components sector is in a strong position to cash-in on Indias cost-effectiveness, profitability and globally-recognized engineering capabilities. As the benefits of collaborations become more apparent, super-spets may emerge in which the automobile is treated as a system, with each spet focusing on a sub-system, akin to the IT industry. Though this approach is radical, it could prove an important step in reducing complexity and investment requirements, while promoting standardization and meeting customer demands. Manufacturers are already planning for the future: early advocates of technological and distribution alliances have yielded generally positive results, enabling domestic OEMs to access global technology and experience, and permitting them to grow their ranges with fewer financial risks. This exciting outlook for the industry is set against a backdrop of two potentially game- changing transportation trends the gradual legislative move towards greener, gas-based public transport vehicles, and a greater requirement for urban mass mobility schemes to service rapidly-expanding cities. Green Revolution : In a price-conscious economy such as Indias, the shift towards green vehicles will be slow unless spurred by government mandates. Although the major players are already equipped with the necessary capabilities to develop cleaner vehicles, they do not see much merit in commercializing these technologies until the green revolution gains momentum most likely through changes in political legislation and it achieves the market scale required for commercial viability. Manufacturers are placing greater faith in dual-fuel technologies than in battery-powered alternatives because the necessary support infrastructure, such as recharge stations, is not yet in place for the widespread adoption of the latter. The launch of electric motorcycles could have a significant impact on the market, given that motorcycles account for the...
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- Spring '11