The document provides an overview of macroeconomic factors affecting the Indian auto industry. It notes that the Indian auto industry is among the top 10 in the world, contributing significantly to GDP and exports. It then examines several key macroeconomic factors influencing the auto sector, including interest rates, rising incomes, demographics, urbanization, raw material prices, and the USD fluctuation. Specifically, it finds that lower interest rates and fuel prices encourage auto purchases by making vehicles more affordable. It also finds that India's growing and youthful population as well as rapid urbanization present opportunities for increased auto sales as transportation needs rise.

1. Study of Macro Economic Factors affecting
“Indian Auto Industry”
Prepared by
Sanjiv Narula .
06 Feb 2016

2. 2
Indian Auto Industry- Among Top 10 in World
Source SIAM
 Annual Sales 23,960,940 vehicles
 Contribute to
 7.1 % of the country's GDP , 49% of Mfg GDP , 26% of Industry GDP
 4.3% of overall exports
 Employment of 19 million
 Generate Revenues of Rs 2.34 Lakh crore
 Attracted FDI worth US$ 13.48 billion (April 2000 to June 2015)
2

3. 2
Macro Economic Factors affecting
Indian Auto Industry
Indian Auto
Industry
Interest
Rates
Rising
Income
Level &
Demography
Urbanization
Raw
Material
Prices
USD
Fluctuation
Global
Environment
(China
Meltdown)
Factors Evaluated

4. 4
-8
-6
-4
-2
0
2
4
6
8
FY 14-15 FY 15-16 Outlook FY 16
% Growth
Car Motorcycle
Interest Rates and Petrol Prices and Auto Sector
 Interest Rates reduced from 10.1 % to 9.70 % and expected to drop
Encourages spending on investment
Increase the Quantity of goods (Automobile ) Purchased
 Global crude prices have fallen
 Cheaper fuel brings down running costs.
 Lower running costs imply low cost of ownership.
 Lower cost of ownership drives sales.
 Cars become more affordable to run.
 Also, cheaper fuel implies other commodities are cheaper and disposable
income increases
The Interest
Rate Effect
The Wealth Effect
Source SIAM
3

5. Demography
5
Indian Pockets growing Deeper
Source India’s macro-economic outlook 2020
15-19 age band (one tenth of the population) will be a significant segment
Almost half of the population will continue to remain in the age band of 15—44
in the next decade.
2000 2005 2015 2020
Indian Car Buyer Getting Younger
Favourable Demographics will boost Auto Sector Growth
4

6. 6
Passenger car penetration
Still Lot of scope of Growth in Indian Car Market
5

7. 7
Auto Sector Growth by Women
Scoter Market will witness High Growth due
to High demand by Women
6

8. 8
Urbanization Trend of India
 Bigger the city, longer the distances per trip
 Opportunities for Personal vehicles where public transport is inadequate

9. 9
13.86
17.29 17.29 19.91
23.34 25.72 27.78
33.00
36.00
43.00
46.00
10.84
11.99
11.1810.29
0
20
40
60
80
100
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2010 2015 2025 2030
Urbanization and Auto Sector Growth
 Bigger the city, longer the distances per trip
 Longer Distance Trip drives need of Transportation
 Opportunities for Personal vehicles where public transport is inadequate
7

10. 10
Indian Metro Rail rides on Hero MotoCorp
New Delhi: Jaipal Reddy
has hailed Hero Moto
Limited for introducing
special bike service which
would provide last mile
transportation solution for
Metro rail commuters.
“Metro feeder system
buses and autos are
inadequate and do not
provide the last mile
solution to people. But
this bike service would be
revolutionary in meeting
this gap.” said Jaipal
Reddy.
Rampant urbanisation,
migration of people and
cross movement to
downtown areas has put a lot
of pressure on already
choking infrastructure.
These bikes are parked at the
station, any person with the
UID (Unique identity) that
verifies license and mobile
commerce account can take
the bike and reach his
destination. GPS tracker in
the bike would let the
logistics company to get the
bike back to the nearest
parking bay which are
located all across the city. 8

11. Focus on the journey,
not the destination.
Joy is found not in finishing an activity
but in doing it

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Seeking for your valuable Inputs