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Management discussion and analysis: Automobiles sector: Motorcycle & Mopeds industry Domestic Economic Performance As per various government sources it is seen that india's resilient Economy growth will be range between 7.5~8% by driven by strong domestic demand,moderate inflation,and investment in infrastructure. Global Economic Overview As per IMF global economic remain sluggish in this financial year range between 3~3.5% (2023) which is better than its previous year growth which is around 2.2% (2022) driven by geopolitical tension,hogher interest rates,supply chain disruption and red sea crisis in 2023. Growth Drivers • Stable urban discretionary consumption demand,particularly in services like travel, tourism,and hospitality • Improved consumer sentiment, as evidenced by the RBI's Consumer Confidence survey • Increased disposable income among the mid-income group due to previous fiscal year’s tax reforms • Enhanced investment climate supported by well-regulated banking and financial practices • Record capex outlay of H 11.11 lakh crore in the Central Government budget for FY 2024-25. • Moderate global crude oil and commodity prices. Company Financial Metrics: TVS Motor Company Revenue: ₹31,776 crores in FY 2023-24, up from ₹26,378 crores. Net Profit: ₹2,083 crores, representing strong growth across product categories . Hero MotoCorp Revenue: ₹37,456 crores in FY 2023-24, up from ₹33,806 crores. Profit: 36% increase in profits, driven by strong domestic sales . Eicher Motors Limited Revenue: Eicher Motors recorded its highest-ever revenue at ₹16,536 crores, a 14.5% growth Net Profit: Profit after tax (PAT) increased by 36.4% to ₹4,001 crores #finance #manaementdiscussionanalysis #growth #automobiles #eichermotors #tvsmotors #heromotocorp

The Indian Automotive sector contributes to almost 7% of India’s GDP while employing almost 4 crore people. Even at this percentage, if we do achieve $ 5 Trillion economies, the figure is huge. However, how does the govt harness it’s potential, what all can be expected in this year’s budget and finally, how should govt incentivize EV & other future technologies? Let us explore a few ways: 1.      Relief in GST (at least for EV’s for all Classes-Cars, Buses, 2W,3W, Hybrids) 2.      GST reduction for Entry level two wheelers 3.      Relief in GST for Auto Ancillaries (otherwise we will become mere assemblers) 4.      Focus on PLI’s & FAME incentives 5.      Loan benefits for EV’s and Hybrids 6.      Incentive on local R&D. With strong infra push, esp. in rural India, the demand for automotive market will only grow. The challenge is prevention of sudden norms and striking a balance between safety, sustainability & affordability Note: Views are personal. (Image of Times Now) #budget #automotiveindustry

Auto Components Industry in India The Government aims to double its exports of Auto Components to US$ 30 billion by 2026.( IBEF Release –Feb’2024, www.ibef.org) Robust Demand ·      Growing working population and expanding middle class are expected to remain key demand drivers. ·      By 2025, 4 million of EV’s could be sold each year and 10 million by 2030. ·      The Indian Auto Component Industry is set to become the 3rd largest globally by 2025. Export Opportunities ·      India is emerging as a global hub for auto component sourcing and the industry exports over 25% of its production annually. ·      Auto component exports are expected to grow and reach US$ 30 billion in FY26. ·      India has a competitive advantage in auto components categories such as shafts, bearings and fasteners due to large number of players. This factor is likely to result into higher exports in coming years. Policy Support ·      100% FDI is allowed under the automatic route for auto components sector. ·      Production Linked Incentive (PLI) schemes on automobile and auto components are expected to bring a CAPEX of Rs.74,850 Crores (US$ 9.58 billion) in the next five years. ·      The Bharat New Car Assessment Program (BNCAP) will not only strengthen the value chain of the auto component sector, but it will also drive the manufacturing of cutting-edge components, encourage innovation, and foster global excellence.

>𝐓𝐞𝐩𝐢𝐝 𝐆𝐫𝐨𝐰𝐭𝐡 𝐎𝐮𝐭𝐥𝐨𝐨𝐤 𝐟𝐨𝐫 𝐀𝐮𝐭𝐨 𝐂𝐨𝐦𝐩𝐨𝐧𝐞𝐧𝐭 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐞𝐫? Indian auto component industry grew by 33% in FY23 and in FY24 the growth was in mid-teens. ICRA projects the growth for FY25 to be between 5-7%. Although, the overall growth may be tepid for the recent future, the longer horizon (next five years) looks positive. Growth from longer horizon's perspective depends on India becoming the global hub for auto components as the focus from China and Europe gradually is shifting due to reasons like pandemic induced chip shortages, US-China trade war, Russia-Ukraine war and now the Israel-Palestine conflict. The idea of India becoming the global hub has been around for more than a decade but due to abovementioned reasons, it gradually is becoming a reality. India's auto component manufacturers have larger than ever export orders than ever and they are also increasing their capacity for the same. In a recent conference call for Q4FY2024 Joint Managing Director of Bharat Forge noted that there is a great deal of orders flowing in from geographies like China, Europe and others to India. Analysts at Motilal Oswal believe that the auto component industry will invest around $6.5 billion to $7 billion in the next 5 years, compared to $3.5 billion to $4 billion in the last 5 years. Although, the growth trajectory also depends on the auto component companies' ability to increase their capacity coupled with lower wage rates. What are your thought on this? Do comment below. P.S. - This is my 5th day of covering auto sector. I try to stick with core auto sector but this seemed like an interesting development to share from the auto ancillary industry. #india #finance #equitymarkets

🚗 The Booming Opportunity in the Indian Automotive Sector🚗 India's automotive market is on the verge of significant growth, fueled by rising incomes and low vehicle penetration. Key highlights include: - Massive Market Potential: Despite being the 4th largest automobile market, India has just 34 cars per 1,000 people. - Thriving Ancillary Sector: A robust ecosystem from auto parts to batteries supports the industry. - Electric Vehicles Surge: Government incentives and growing EV adoption offer new avenues for growth. - Export Powerhouse: Two-wheeler exports have grown at 13% CAGR over the past decade. Explore the potential of this dynamic market and how the SBI Automotive Opportunities Fund is tapping into this growth. 👉https://lnkd.in/dJ8bFFS6 Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.

ACMA Report: Driving Growth in India's Auto Components and Aftermarket Segments Did you know that…. India’s auto component industry achieved a turnover of INR 6.14 trillion (US$73.1 billion) between April 2023 to March 2024. In the recent report released by ACMA (Automotive Component Manufacturers Association), the auto component industry represents a 9.8 percent increase in turnover from the previous year. The domestic Original Equipment Manufacturing (OEM) component supply grew by 8.9 percent to INR 5.18 trillion (US$61.7 billion) and the EV manufacturing sector contributed 6 percent to total component production in the country. India’s auto components exports rose by 5.5 percent to US$21.2 billion in FY 2023-24, while imports increased by 3 percent to US$20.9 billion, resulting in a US$300 million trade surplus. India’s aftermarket segment, valued at INR 938.86 billion (US$11.1 billion), saw a 10 percent increase. The rise in e-commerce helping in transitioning the aftermarket from an unorganized sector to a more organized one with consistent standards. As per the reports, the first quarter of FY 2024-25 saw slower vehicle sales, especially in passenger vehicle and commercial vehicle segments. It is believed that the reason behind this dip is climatic conditions and elections. The reason behind such a growth is ongoing vehicles’ production in the country, a robust aftermarket, growth in exports and higher value addition from the component sector. Looking ahead, with favorable economic indicators, supportive government policies, and projected 7 percent GDP growth, India expects its auto components industry to perform well in FY25. Also, I’ve shared an article on Shriram Pistons & Rings Limited—find the link in the comments below. SPRL is a leading manufacturer of Pistons, Piston Pins, Piston Rings, and Engine Valves in India, and belongs to the Shriram Group. Its products are marketed to renowned OEMs and in aftermarket under the brands SPR and USHA, catering to domestic and international markets. Disclaimer: This article is only for an educational purpose and not any financial advice. Also, I’d love to hear your perspectives on the current trends in the automobile industry. Please share your thoughts in the comments. Source: ACMA #finance #linkedIn #india

#autoindustry #2024outlook #policy #india ET Prime After two years of double-digit volume growth, retail sales of vehicles are set to be near 24 million units in 2023 (when the final numbers come), close to the all-time high of 25.5 million seen in 2018. Vehicle prices have gone up steeply over the years and with that industry revenues and profits have zoomed past previous all-time highs. The stock market captured this. The Nifty Auto index rose 47.6% in 2023, compared with 19.2% by the broader Nifty 50 index. Over the last five years, Nifty Auto is up 110% against a 101% rise clocked by Nifty 50. Industry volumes are expected to grow at mid-single digits in 2024 on account of a high base effect. Two-wheelers and buses, the two segments that have lagged for long, are set to outperform in 2024 as both benefit from pent-up demand and the general elections helping demand at lower economic spectrums. On the policy front, the coming year will be important. The government has started the preliminary work on BS 7 emission regulations, and we could see some clarity on the implementation timeline in 2024. Companies could start getting production linked incentives in their bank accounts in the new year, a key support that the industry is waiting for with bated breath. The government could announce a new FAME (Faster Adoption and Manufacturing Electric Vehicles) policy being directed towards commercial vehicles and EV charging infrastructure. That could mean further waning of support for electric two-wheelers and three-wheelers. Tesla committing to build in India is also likely to give a boost to India’s EV ecosystem.

🚗 Auto Sector's Massive GST Contribution & Growth Potential 🚀 Did you know? The Indian auto sector contributes nearly 15% of the total GST collected by the government! That's no small feat, as highlighted by the SIAM President after the industry crossed the ₹20 lakh crore mark. This milestone showcases the sector’s immense role in India's economic fabric. 💡 But here's an exciting thought: What if there's a reduction in GST? A lower GST rate on vehicles would make them more affordable, increasing consumer demand. A study by experts predicts that a 5% reduction in GST could lead to a 10-15% boost in sales, especially in the small car and two-wheeler segments. This increased demand could accelerate the industry to hit ₹30 lakh crore by 2028. The ripple effect? More jobs, higher production, and an even bigger contribution to GDP. 📊 Future Trend Watch: EV segment: With more incentives, electric vehicles could contribute up to 20% of total vehicle sales by 2030. Luxury cars: A GST cut might drive a surge in premium car sales, with an estimated 20% growth in the next 5 years. 🎉 Fact: India's auto sector employs over 35 million people directly and indirectly – that's almost the entire population of Canada! A thriving automotive industry doesn’t just mean more cars on the road – it means a thriving workforce and stronger communities. 🚀 Interesting Story: Once, a small auto manufacturer in Maharashtra witnessed a 300% growth in sales during the post-GST regime after a minor tax reduction on its products. A small change had a massive impact! Imagine what could happen if the entire sector gets this boost. 🔮 With a GST reduction on the horizon, the Indian auto sector could gear up for another monumental growth phase, driving India toward becoming a global automotive powerhouse. 🌍 #AutoIndustry #GST #IndiaGrowth #ElectricVehicles #FutureOfMobility #EconomyBoost #SIAM #FM #Sudheermenta

The emerging changes in the global supply chain in the automobile business have witnessed a shift in the aftermath of COVID-19. India has a new opportunity to cash in on becoming a global auto ancillary hub. However, the ambition comes with a reminder of how Research and Development still holds the key to this dream. Utkarsh Tripathi has more on it: https://shorturl.at/hvyTW #PolicyMatters #AutomobileIndustry #Geoeconomics #IndianAutoComponentIndustry #AutoExports

https://lnkd.in/gD7mAh3K Indian Auto Component Industry clocks Rs. 6.14 lakh crore (USD 74.1 billion) in turnover, grows 9.8% in FY 2023-24.   Supply to OEMs grows 9% on back of robust growth in vehicles’ production. Exports, with trade surplus, remain steady despite geopolitical challenges. Auto component Aftermarket grows 10% to Rs. 93,886 crore (USD 11.3 billion). Supply to EVs account for 6% of Auto Components Industry turnover. Industry optimistic as economy exhibits robustness. ACMA India Vinnie Mehta Bhumika Kohli Dewanshu Jain #ACMA #IndianAutocomponentIndustry #ComponentAftermarket #Vehicleproductiongrowth