India automotive-market-2020

MAGNETTI MARELLI

India Automotive Market 2020

MAGNETTI MARELLI

The key 5s

1. Going forward, India is a key pillar of global automotive market - policy, actions andstrategies of players in India will have a fundamental impact on the global auto landscape

2. By 2015, India will exceed every major European market inc. Germany, France and UK in4thautomotive sales - making India the largest automotive market by volume in the world

3. Over the next 20 years, India will be part of global automotive triumvirate - the global BIG 3

4. In fact, we expect the India automotive sales to exceed the US market by mid 2030s

5. The global automotive game will be pretty much decided by twin forces for China and India

1

MAGNETTI MARELLI

India is booming – and projected to maintain the trajectory

Real GDP Growth2005-2020

Regional: Percentage of World GDP

2004India

2%China4% 4.0

ChinaOther20%

Japan12%

3.5India

US28%

EU34% 3.0

2.52050 Estimate

Other10% India

17%2.0 Thailand

US26% 1.5 United Kingdom

Germany

China28%

EU15% 1.0

Japan4%

Source: Global Insights Database, Business Week, Booz & Company analysis

2

Gro

wth

Rat

e (B

ase=

2005

)

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

MAGNETTI MARELLI

1800 1850 1900 1950 2000 20500%

20%

40%

60%

80%

Emerging markets are transforming the economic landscape —could the future repeat the past ?

Percent Contribution of India & China,US, Western Europe and UK to World

Economy(1500–2050 AD)

India & ChinaIndia & China

Western Europe(excluding UK) US

Western Europe(excluding UK)UK

UK

Year

Note: UK, US and W. European countries do not include GDP from former British coloniesSource: The World Economy-Historical Statistics; Goldman Sachs BRIC Report; Booz & Company research and analysis

3

Perc

enta

ge C

ontr

ibut

ion

to W

orld

Eco

nom

y

60%

40%

20%

0%

1850 1900 1950 2000 20501500

80%

MAGNETTI MARELLI

An assessment of parallels with markets such as China strengthenour belief in tomorrow

GDP Growth GDP Per Capita Growth FDI Trends – India and China

$3,000 $3,000 $90,000

$80,000$2,500 $2,500

$70,000

$2,000 $2,000 $60,000

$50,000$1,500 $1,500

$40,000

$1,000 $1,000 $30,000

$20,000$500 $500

$10,000

$0 $0 $01 3 5 7 9 11 13 15 17 19 21 22 25 27 1 3 5 7 9 11 13 15 17 19 21 23 25 27 1 3 5 7 9 11 13 15 17 19 21 23 25 27

Years Since Liberalization Years Since Liberalization Years Since Liberalization

China – 1979 India – 1991

Source: Economic Intelligence Unit, Booz & Company analysis

4

In $

Bn

In $

In $

Mn

MAGNETTI MARELLI

The twin pillars of the global economy, India & China, will define theeconomic landscape for generations to come

GDP Trends2005 Constant Prices

($Trillion)

Real GDP Growth(Base = 2005)

Growth relativeto 2005$ Trillion

ChinaIndia

11

10

9

8

7

6

5

4

3

2

1

0

25 China

2015

10India

Pakistan

Russia Germany Japan

JapanGermany5

RussiaPakistan

02000 2010 2020 2030 2040 2000 2010 2020 2030 2040

Source: Global Insight Database, Booz & Company analysis

5

MAGNETTI MARELLI

Wealth is beingeconomy

generated via a positive structural shift in the

Shift in GDP composition by sector(1950 to 2020E)

100%

90%

80%

70%

60%

50%

40%

30% 42%56%

20%

10% 15% 11% 8%0%

1950 1990 2000 2007 2012 2020

Agriculture Industry Services

Source: Global Insights Database, Economic Intelligence Unit, Booz & Company analysis

6

% c

ontri

butio

n to

GD

P

30% 35%39%

48% 49%

50%

14%

36%38%

37% 40%

29%22%

MAGNETTI MARELLI

Industry is likely to benefit from the change in consumptionpattern of an increasingly

Private Consumer Spending1994-2015

prosperous society

Private Consumption GrowthBase - 1994

Index

100% 15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

0

Transport / Comm.

Food & Beverages

Recreation

Clothing & Footwear

Housing

Total ConsumptionHealth

Transport / Comm.

Food & BeveragesRecreation / Education

scellaneous

1990 1995 2000 2005 2010 20151994 2005 2015

Note: Miscellaneous includes personal care goods and other servicesSource: Central Statistics Organization (GOI), Booz & Company analysis

7

% c

onsu

mpt

ion

of to

tal 55%

40%29% F

H

Tr

Mi

8%

13%7%

16% 4%6%

23%15%

5%

20%3% 5%11%

19%3%3%

9%6%

MAGNETTI MARELLI

This rise in per capita GDP will lead to higher vehicle ownership

Cars / 1000 People Versus GDP / Capita1990 - 2013Cars / 1000 People

600

550

500

450

400

350

300

250

200

150

100

50

0

Germany

China

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000

GDP / CapitaSource: Economist Intelligence Unit; Booz & Company analysis

8

USA

Saturated penetration levels in developed economies

Russia

Rising per capita income leading to increased penetration; trend expected

India to continue given low current levels

MAGNETTI MARELLI

The result: India is an anchor of future growth in the auto industry

GDP Growth by Country2010 – 2020

> 5% projected GDP growth

3.5 % - 5% projected GDP growth

< 3.5% projected GDP growth


9

MAGNETTI MARELLI

Automotive sales are destined to resonate with global economicshift - India is the place to be for the global OEMs

Automotive Sales by Geography(Passenger Vehicles, Commercial Vehicles and Two Wheelers)

2009 20201980

Market size: 60 M unitsAsia & Japan: 7% Europe: 42% NA:

41%Market size: 205 M units

Asia & Japan: 65% Europe: 20% NA:

15%Shift in center of gravity

1) Includes passenger vehicles, commercial vehicles and two-wheelersSource: Global Insight Database, March 2009; Wards Auto; Booz & Company analysis

10

Market size: 102 M units Asia & Japan: 45%

Europe: 32%NA: 18%

MAGNETTI MARELLI

India’s car market has the potential to grow up to 6+ millions unitsannually by 2020

Passenger vehicle sales in India(2001 – 2020)

Million Units6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Aggressive

Base Case

ConsensusConservative

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etcNote: Aggressive scenario – 14% CAGR upto 2015, after which market stabilizes (based on similar growth seen in the Chinese markets under similar macroeconomic

conditions) Base Scenario – 8% CAGR over 2009-2020; based on historical growth trends of the Indian car marketConservative Scenario – 6% CAGR; car sales negatively impacted by economic downturn or unfavorable government policies (high interest rates, financing not easily accessible,

etc)Source: Global Insight database, Booz & Company Analysis

11

Germany Car Sales 2008 - 3.1 M Units

Italy Car Sales 2008 - 1.9 M Units

Spain Car Sales 2008 - 1.6 M Units

MAGNETTI MARELLI

India will soon be bigger than most other markets

Western Europe (1998) and India (1998)4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500174 147 141

0


Booz & CompanyDATE

India Auto Market.ppt Prepared for client name 12

Sal

es V

olum

e(in

thou

sand

s of

un

its)

GERMANYIT

ALY

UNITED KIN

GDOM

FRANCE

SPAI

NETH

AN S

BEIU

MN I

A

PT

AL

UST IA

TZERL EDN D

ERL LG I D

UG

OR

R

A

AND

SWI

EN

SW GREECE

DENMARK

IRELA

ND

NORWAY

FINLA

ND

3920

2,534 2,4882,289

1,446

640 538 530369 320 316 280 196 192

MAGNETTI MARELLI

India will soon be bigger than most other markets


4,000

3,500

3,000

2,500 2,262 2,216

2,000

1,500

1,000

500131 126 102 64

0


13

Sal

es V

olum

e(in

thou

sand

s of

un

its)

GERMANY OM

SPAIN

BELGIUM

NETHERLANDS

AUSTRIA

SWIT

ZERLAND

SWEDEN

GREEC

FRANCE

ITALY

INDIA

UNITED K

INGD

E

PORTUGAL

DENMARK

NORWAY

FINLA

ND

IRELA

ND

4,035

2,6782,360

1,071

581 4513

4

9

2

9

4

2

4

7

2

3

6

2

0

3

MAGNETTI MARELLI

Much earlier than 2020, India will exceed the major EU markets


4,500

3,500

2,500

1,500

500

-500

Note: Forecasts for 2015Source: Global Insight Database, Booz & Company analysis

Booz & CompanyDATE

India Auto Market.ppt Prepared for client name 14

Sal

es V

olum

e(in

thou

sand

s of

un

its)

INDIA

GERMANY

UNITED KIN

GDOM

FRANCEIT

ALY

SPAIN

NETHERLANDS

BELGIUM

SWEDEN

AUSTRIA

SWIT

ZERLAND

PORTUGAL

GREECE

DENMARK

NORWAY

FINLA

ND

IRELA

ND

5,070

3,693

2,598 2,566 2,434

1,624

617 6083

4

2

3

4

1

3

2

3

2

9

9

2

4

5

2

0

3

1

7

1

1

6

0

1

5

1

MAGNETTI MARELLI

India and China dwarf existing automotive markets such asGermany or UK

Automotive sales volume by country2030

PPootteennttiiaall ffoorr IInnddiiaann maarrkkeett ttoo rreeaacchh rreevveennuueess

ooff $$115500 -- $$220000 bbiilllliioonn

Note: 2030 sales and GDP projections are based on annual GDP growth rates projected by country per GS BRIC reportSource: Global Insight Database, March 2009; Goldman Sachs BRIC Report; Booz & Company

analyses15

Number of unit sales

> 10 M

3 M - 10 M

1 M - 3 M

< 1 M

MAGNETTI MARELLI

By 2030, India will be among the GLOBAL BIG 3

Light Passenger Vehicle Sales Projections - 2030Million Units

Million units42

16

14

12

10

8

6

42.4 2.4 1.9

2

0CHINA UNITED

STATESINDIA BRAZIL RUSSIA GERMANY FRANCE UNITED

KINGDOMITALY SPAIN

Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etcSource: Global Insight Database, Booz & Company analyses

16

40.7

17.6

11.7

7.8

5.2

3.72.9

MAGNETTI MARELLI

We expect not just a quantitative but also a qualitative change inthe market…

Indian household income & car sales distribution2008

% ofhouseh

olds

% of totalcar sales

60% 60%

50% 50%

40% 40%

30% 30%

20% 20%

10% 10%

0% 0%A B C D E&F MPV SUV PUP OtherCar Segments

Income distribution < $1K $1K - $3K $3K - $5K $5K - $10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K > $75K

Source: Global Insight 2009, Booz & Company Analysis

17

Household income distribution

Distribution of car sales by segment46%

15% 14%

8% 9%

4%4%0% 0%

MAGNETTI MARELLI

The marketnation

of tomorrow will reflect increased prosperity of the

Indian household income & car sales distribution2030

% ofhouseh

olds

% of totalcar sales

40% 60%

50%

30%

40%

20% 30%

20%

10%11%

10%

0%0% 0%

A B C D E&F MPV SUV PUP OtherCar SegmentsIncome

distribution < $1K $1K - $3K $3K - $5K $5K - $10K $10K - $15K $15K - $25K $25K - $35K $35K - $50K $50K - $75K > $75K

Source: Global Insight 2009, Booz & Company Analysis

18

Household income distribution

Distribution of car sales by segment

33%

20%

12% 12%

5%5%2%

MAGNETTI MARELLI

Interestingly, India’s market is expected to overtakesales by ~2035

Light Vehicle Sales Projections - US, China, India

the US auto

2004-2040, Thousand UnitsThousand Units60,000

CHINA55,000

50,000

45,000

40,000

35,000 India’s automotive sales isS30,000

25,000

INDIAUNITED STATES

20,000

15,000

10,000

5,000

02004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Note: Figures for passenger vehicles includes numbers for light commercial vehicles like TATA Ace, TATA Magik, Suzuki Omnivan, Toyota Dyna, Mitsubishi Canter, etcSource: Global Insight Database, Booz & Company analyses

19

India’s automotive Chinese automotive

expected to exceed U.

sales exceeds U.S

MAGNETTI MARELLI

• POWERTRAIN INDIA• Focus on Automated Manual Transmission (AMT)

• Best drivability performance in AMT technology

• Ability to offer a complete powertrain system control (engine + transmission)

• Most affordable two pedal transmission demonstrated with the success in India market

Oil tank

Power Unit

Mechatronic TCU

Hydraulic Control Module

Main Customers

MM is market leader in AMT (100% market share in 2015) with 8 applications for 2 clients). Volumes expected to increase from 88K units in 2016 to 296K in 2020 covering over 23 application for 3 clients

AMT Localized Manufacturing for Maruti Suzuki, Tata Motors and Mahindra.

* Maruti Suzuki sells its AMT to Suzuki Thailand and Suzuki Indonesia for Celerio and Wagon-R platforms.

CELERIO

S101, U321, S103 or S102

ZEST NANO

YJC/ YSD-HB/ YSD-NB

ALTO K10 WAGON-R

DZIRE

KITE4/5/OSPREY