A Project Report On An Overview of Automobile Industry in India

A
Project Report
On
An Overview of Automobile Industry in India
&
Financial Analysis of Automobile Company
In partial fulfillment of the requirements of
Master of Management Studies
Conducted by
University of Mumbai
Through
Rizvi Institute of Management Studies & Research
Under the guidance of
Prof. Umar Farooq
Submitted by:
Saifali Aslam Mirdhe
MMS
Batch: 2017 – 2019.

ACKNOWLEDGEMENT
Written words have tendency to convert genuine gratitude into unnatural formality.
However, I feel this is the best way to express my appreciation for everyone concerned.
Working on this project on has been an incredible experience for me. For this very
wonderful experience I would like to thank a lot of people without whose co-operation
and support working on this project would not have been so pleasurable and interesting.
Firstly, I would like to thank the University of Mumbai which has accepted me for
MMS program and I feel great pride and pleasure in putting on record a deep sense of
gratitude Dr. Kalim Khan, Director, Rizvi Institute of Management Studies and
Research, During my research if it was not his encouragement and support, this project
would never have been possible. I would have been deprived of a vast treasure of
knowledge. I would also like to thank to thank Professor Umar Farooq for guiding
throughout the project.
These acknowledgements are one way where I can say actually thanks to my relatives
and friends who have supported me in the making of this project. Without their help
and guidance it would be a very difficult task for me to try and plan this project and
actually prepare it.
Place: Mumbai Signature of Student
Date: Saifali Mirdhe

EXECUTIVE SUMMARY
The automotive industry is a pillar of the economy and a key driver of macroeconomic
growth and technological advancement. In India, the automotive industry contributes
7.1% to the total GDP and provides employment to about 32 million people, directly
and indirectly1. Strong domestic demand coupled with supportive Government policies
have led to the Indian automotive industry climbing up the ranks to be one of the global
leaders. India is the largest manufacturer of two-wheelers, three-wheelers and tractors
in the world, and the fifth largest vehicle manufacturer overall.
The Government of India and the Indian automotive industry articulated their objectives
for the future of the industry through the Automotive Mission Plan 2016-26 (AMP
2026). The plan envisions that by the year 2026, India will be among the top three in
the world in engineering, manufacturing and export of vehicles and auto components.
To achieve these objectives, the industry will have to ensure persistent growth over the
next decade and resolve the following key issues:
Policy instability and governance issues: The mandates for the automotive industry
in India are currently being decided or influenced by multiple stakeholders, which may,
at time, lead to unforeseen and abrupt changes for the industry. There is also an
opportunity to adopt a more transparent and robust basis for major regulatory and policy
changes which is backed by strong scientific or commercial analysis.
Absence of a long-term industry roadmap: Currently, the industry needs a long-term

visibility of automotive regulations in India and hence avoids any uncertainty on the
future requirement of technologies, testing and skills. Better alignment is needed
between the planning horizon required for automotive investments and announcements
and implementation timeline for regulatory changes, thereby facilitating investments in
the sector.
Potential for improvement in technology access and R&D expertise: Technological

progress of the automotive industry in India has been restricted by limited access to
emerging technologies and innovations. Also, the domestic research and development
eco-system has significant potential which can be tapped by increased levels of
investments in building domestic engineering capabilities and better collaboration
between industry and academia.
Shortage of skilled manpower: The automotive industry in India is in continuous need

of skilled manpower, given the limited training capacity and employability of the
trained workforce. Penetration of vocational education and training in India is also not
at par with other leading countries.
Issues with the supply chain infrastructure: Inadequate development of logistics and
supply chain infrastructure in India leads to inefficiencies, delays and high costs. This
is a critical bottleneck to the expansion and competitiveness of the automotive industry.
In addition to the above, there are specific issues that are hindering development of
different parts of the automotive value chain in India. Considering this situation, the
National Auto Policy is formulated to create an enabling environment for the
automotive industry and address the key issues impacting the industry. Through a
comprehensive policy framework, it envisions the growth of the automotive industry as
per the goals of AMP 2026.
CERTIFICATE
This is to certify that Mr. Saifali Aslam Mirdhe, a student of Rizvi Institute of
Management Studies and Research, of MMS bearing Roll No.082 and
specializing in Finance has successfully completed the project titled
An Overview of Automobile Industry in India
&
Financial Analysis of Automobile Company
Under the guidance of Prof. Umar Farooq in partial fulfillment of the

requirement of Masters of Management Studies by University of Mumbai for
the academic year 2017 – 2019.
_______________
Prof. Umar Farooq
Project Guide
_______________ ____________
Prof. Umar Farooq Dr. Kalim Khan
Academic Coordinator Director

AN OVERVIEW OF AUTOMOBILE SECTOR IN INDIA
AND
FIANANCIAL ANALYSIS OF AUTOMOBILE COMPANY
Table of Contents
INTRODUCTION ......................................................................................1
OVERVIEW ...............................................................................................4
PLAYERS .................................................................................................16
SEGMENTS .............................................................................................20
KEY DEVELOPMENTS .........................................................................24
PLANS AND PROGRAMMES ...............................................................26
ROAD MAP..............................................................................................30
KEY POLICIES ........................................................................................32
FINANCIAL ANALYSIS ........................................................................36
CONCLUSION .........................................................................................47
REFERENCES .........................................................................................48
ANNEXURE.............................................................................................49
INTRODUCTION
Automobile industry is the key driver of any growing economy and plays a pivotal role
in country's rapid economic and industrial development. It caters to the requirement of
equipment for basic industries like steel, non-ferrous metals, fertilizers, refineries,
petrochemicals, shipping, textiles, plastics, glass, rubber, capital equipments, logistics,
paper, cement, sugar, etc. It facilitates the improvement in various infrastructure
facilities like power, rail and road transport. Due to its deep forward and backward
linkages with several key segments of the economy, the automobile industry is having
a strong multiplier effect on the growth of a country and hence is capable of being the
driver of economic growth. It plays a major catalytic role in developing transport sector
in one hand and help industrial sector on the other to grow faster and thereby generate
a significant employment opportunities. In India, automobile is one of the largest
industries showing impressive growth over the years and has been significantly making
increasing contribution to overall industrial development in the country. Automobile
industry includes two wheelers, three wheelers, commercial vehicles and passenger
vehicles. The Indian automobile industry has made rapid strides since delicensing and
opening up of the sector in 1991. It has witnessed the entry of several new
manufacturers with the state-of-art technology, thus replacing the monopoly of few
manufacturers. There are 19 manufacturers of passenger cars & multi utility vehicles,
16 manufacturers of commercial vehicles, 10 manufacturers of two wheelers and 7
manufacturers of three wheelers in India. The norms for foreign investment and import
of technology have also been liberalized over the years for manufacture of vehicles. At
present, 100% foreign direct investment (FDI) is permissible under the automatic route
in this sector, including passenger car segment.
The Indian Automobile Industry has flourished like never before in the recent years.
This extraordinary growth that the Indian automobile industry has witnessed is a result
of a major factor namely, the improvement in the living standard of the middle class
and an increase in their disposable incomes. Moreover, the liberalization steps, such as,
relaxation of the foreign exchange and equity regulations, reduction of tariffs on
imports, and refining the banking policies initiated by the Government of India, have
played an equally important role in bringing the Indian Automobile Industry to great
1
heights. The increased demand for Indian automobiles has resulted in a large number
of multinational automobile companies, especially from Japan, the U.S.A., and Europe,
entering the Indian market and working in collaboration with the Indian firms. Also,
the institutionalization of automobile finance has further paved the way to sustain a
long term high growth for the industry. The rising competition and increasing global
trade are the major factors in improving the global distribution system and has forced
many auto-giants such as General Motors, Ford, Toyota, Honda, Volkswagen, and
Daimler Chrysler, to shift their production bases in different developing countries
which help them operate efficiently in a globally competitive marketplace. During the
second half of the 1990‟s, the globalization of the automotive industry has greatly
accelerated due to the construction of important overseas facilities and establishment
of mergers between giant multinational automobile manufacturers. Over the years, it is
being observed that India is emerging as a global automotive hub. India has growing
potential market for automobiles due to rise in demand. As a result, more and more
manufacturers are bringing in new forms of the existing product because diffusion of a
new product depends upon demand statistics. Automobile manufacturers, particularly
car manufacturers are attracting buyers with new model, shopping to tap growing
demand for automobiles. Utility vehicles also post significant growth. Further, two and
three wheeler industries, specially the motorcycle segments, have shown a steep jump,
while the volume growth of all the players has recorded pretty good market share.
2
Automobile
Sector
Two-wheelers Passenger Commercial Three-wheelers

vehicles Vehicles
Mopeds and Light

Passenger cars Passenger
electric scooters commercial carriers
vehicles
Scooters Medium & heavy

Utility Vehicles Goods carriers
commercial
vehicles
Multipurpose
Motorcycles
vehicles
3
OVERVIEW
Production
The industry produced a total 29,075,605 vehicles including Passenger Vehicles,
Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle in April-March
2018 as against 25,330,967 in April-March 2017, registering a growth of 14.78 percent
over the same period last year.
In India, car production has been greater than sales over the decade. The CAGR of sales
and production were 15.8 per cent and 17.6 per cent respectively during the last decade.
The domestic sales witnessed and reported a very strong volume growth over the last
few fiscal years, with as much as more than 20 per cent growth in 2013 and even higher
than 25 per cent in the year 2014. However, the domestic passenger vehicle industry
started observing a drastic slowdown since the beginning of the financial year 2015
with the year ending at only 4 per cent year on year growth. The society of Indian
Automobile Manufacturers revised and reduced the projected growth of the industry
several times for the year 2016 which finally concluded at just 2 per cent over the
previous year.
In the last two years, around 25 new models and 13 refreshed versions of ongoing
brands have been launched in the Indian market. This has been amongst the strongest
pace of new product introductions in India so far since the start of the industry.
However, this increased supply push has coincided with a period of slow industry
volume expansion making it difficult for the market to assimilate all new models.
Around half of these new product introductions have received a lukewarm market
response, exerting pressure on the profitability of OEMs as well as associated suppliers
and dealers. In December 2015, the demand for passenger vehicles declined by 1.1 per
cent YoY, despite steep discounts being offered across the board to push year-end sales.
While growth momentum slowed down in the passenger cars segment, the Utility
Vehicle (UV) segment continued to witness strong volume growth aided by increasing
demand for recently introduced models. M&M registered a YoY growth of 16.1 per
cent in volumes in December 2015, while Renault also continued to scale-up volumes
on the back of the successful launch of Duster. (Money control, 2016)
4
Category 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13
Passenger 4010373 38,01,670 34,65,045 32,21,419 30,87,973 32,31,058
Vehicles
Commercial 894551 8,10,253 7,86,692 6,98,298 6,99,035 8,32,649
Vehicles
Three 1021911 7,83,721 9,34,104 9,49,019 8,30,108 8,39,748
Wheelers
Two 23147057 1,99,33,739 1,88,30,227 1,84,89,311 1,68,83,049 1,57,44,156
Wheelers
Grand 2,90,73,892 2,53,29,383 2,40,16,068 2,33,58,047 2,15,00,165 2,06,47,611
Total
Domestic Sales
The sale of Passenger Vehicles grew by 7.89 percent in April-March 2018 over the
same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicle
and Vans grew by 3.33 percent, 20.97 percent and 5.78 percent respectively in April-
March 2018 over the same period last year.
The overall Commercial Vehicles segment grew by 19.94 percent in April-March 2018
as compared to the same period last year. Medium & Heavy Commercial Vehicles
(M&HCVs) grew by 12.48 percent and Light Commercial Vehicles grew by 25.42
percent in April-March 2018 over the same period last year.
Three Wheelers sales grew by 24.19 percent in April- March 2018 over the same period
last year. Within the Three Wheelers, Passenger Carrier & Goods Carrier sales
registered a growth of 28.65 percent and 7.83 percent respectively in April-March 2018
over April-March 2017.
Two Wheelers sales registered a growth at 14.80 percent in April-March 2018 over
April-March 2017. Within the Two Wheelers segment, Scooters and Motorcycles grew
5
by 19.90 percent and 13.69 percent respectively, while Mopeds declined by (-) 3.48
percent in April-March 2018 over April-March 2017.
Riding majorly on the domestic demand the production trends were very similar to the
sales trends. After seeing an exceptional growth of production at more than 25 per cent
for two consecutive years in 2013 and 2014, the economic slowdown paralyzed the
manufacturers specifically the major players to a point that the units had to be either
shut-down or work at half the capacity for several days with piling inventory in the year
2015 and 2016 with the year-on-year growth in production posted at just 4 per cent and
3 per cent respectively. (SIAM, 2016b; ICRA, 2014a; and ACMA, 2016)
Counter-balancing the declining domestic sales due to the subdued sentiments in the
domestic auto market, a concerted export push and has kept the country's biggest car
makers in good stead. Growing exports also offers a partial hedge on foreign exchange
exposures at a time when the rupee has been vacillating sharply.
Category 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13

Passenger 32,87,965 30,47,582 27,89,208 26,01,236 25,03,509 26,65,015
Vehicles
Commercial 8,56,453 7,14,082 6,85,704 6,14,948 6,32,851 7,93,211
Vehicles
Three 6,35,698 5,11,879 5,38,208 5,32,626 4,80,085 5,38,290
Wheelers
Two 2,01,92,672 1,75,89,738 1,64,55,851 1,59,75,561 1,48,06,778 1,37,97,185
Wheelers
Grand Total 2,49,72,788 2,18,62,128 2,04,68,971 1,97,24,371 1,84,23,223 1,77,93,701
Exports
In April-March 2018, overall automobile exports increased by 16.12 percent. Two and
Three Wheelers Segments registered a growth of 20.29 percent and 40.13 percent
respectively, while Passenger Vehicles and Commercial Vehicles declined by (-)1.51
percent and (-) 10.53 percent respectively in April-March 2018 over the same period
last year.
6
Maruti Suzuki and the other major players in the country took a conscious call in lieu
of the slowing European markets, which accounted for more than 70 per cent of their
exports and took a note of the need to develop alternate markets. Consequently new
market in Latin America, Africa and the ASEAN countries were targeted and as a result
now the dependence on European markets has come down to just 25 per cent and
currently 75 per cent of vehicle exports are going to Non-European markets.
Although the economy is adversely affected due to a falling rupee but it is proving
beneficial as far as the exports are concerned. This is being attributed as one of the
reasons for growing exports in the sector. The exports in the sector has seen a
continuous growth every year over the decade, except for the 0.4 per cent decline in
2014, which was majorly attributed to the dependence over the European markets which
entered an economic turmoil during the period. With the manufacturers realizing and
developing the new markets, the export has again seen respectable growth with 14
per cent in 2015 and 9 per cent in 2016 despite an overall slowdown even in the Asian
and non-European markets.
Category 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13

Passenger 7,47,287 7,58,727 6,53,053 6,21,341 5,96,142 5,59,414
Vehicles
Commercial 96,867 1,08,271 1,03,124 86,939 77,050 80,027
Vehicles
Three 3,81,002 2,71,894 4,04,441 4,07,600 3,53,392 3,03,088
Wheelers
Two Wheelers 28,15,016 23,40,277 24,82,876 24,57,466 20,84,000 19,56,378
Grand Total 40,40,172 34,79,169 36,43,494 35,73,346 31,10,584 28,98,907
7
Performance of two wheeler three wheeler Industry
Performance of the industry

The Indian automobile industry has seen a positive growth in April-December 2017.
Total production in April-December 2017 grew by 11.27 % to 21,415,719 vehicles as
against 19,247,352 in April-December 2016 vehicles including passenger vehicles,
commercial vehicles, three wheelers, two wheelers and quadricycle. Total domestic
sales of the industry registered a growth of 11.28% at 18,519,618 vehicles in April-
December 2017, as against 16,642,203 vehicles sold in April-December 2016.
Meanwhile, overall exports also surged by 13.01% to 2,978,060 vehicles in April-
December 2017, as against 2,635,225 vehicles exported in April-December 2016.
Domestic production
In April-December 2017, India’s production of Passenger Vehicles (PV) recorded
5.41% growth at 2,936,406 vehicles as against 2,785,679 vehicles in the same period
previous year. Under PV segment, Passenger Cars production was 2,019,562 units,
Utility Vehicles production was 785,614 units and Vans production was 131,230 units.
Besides, total Commercial Vehicle (CV) production increased by 3.42% to 602,745
vehicles as against 582,810 vehicles produced in same period last year. Within CV
segment, medium and heavy commercial vehicles (M&HCVs) production decreased by
6.83%, while light commercial vehicle (LCVs) improved by 10.74%.
Production of three wheelers in April-December 2017 registered a growth of 15.09%
at 718,043 vehicles as compared to 623,885 vehicles in the same period previous year.
8
Under the three wheeler segment in April-December 2017, Passenger Carrier
production advanced by 15.85% and Goods Carrier grew by 9.97%. Meanwhile, two
wheeler production surged by 12.48% in April-December 2017 to 17,157,262 vehicles
as against 15,253,491 vehicles in the corresponding period previous year. In the two
wheeler segment, production of Scooter/Scooterettee jumped by 17.02% and Motor
cycles/Step-Throughs grew by 11.81% but production of Mopeds dropped by 7.61%.
Domestic sales
The domestic sales of Passenger Vehicles (PV) grew by 8.13% in April-December 2017
to 2,425,911 units as against 2,243,522 units in the same period last year. Under the PV
segment, Passenger Cars sales was 1,618,940 units, Utility Vehicles sales was 664,230
units and Vans sales was 142,741 units in April-December 2017. Besides, the sales of
CV segment registered a growth of 15.19% in April-December 2017 to 574,337 units
as against 498,584 units in the same period last year. In the CV segment, sales of
M&HCVs and Light Commercial Vehicles increased by 9.27% and 19.29%
respectively, in April-December 2017 over the same period last year.
Three wheelers sales grew by 7.89% in April-December 2017 to 438,227 units as
against 406,178 units in the same period last year. Within the three wheelers segment,
Passenger Carrier sales soared by 8.25% and Goods Carrier sales grew by 6.39% in
April-December 2017 over April-December 2016. Meanwhile, two Wheelers sales
grew by 11.76% in April-December 2017 to 15,081,143 units as against 13,493,919
units in the same period last year. Under the Two Wheelers segment, Scooters sales
9
advanced by 18.52% and Motorcycles sales jumped by 9.77% but Mopeds sales
dropped by 6.15% in April-December 2017.
Exports
India’s overall exports have witnessed a positive growth but passenger and commercial
vehicles reported a fall for the April-December 2017 over same period of the last year.
In April-December 2017, country’s exports of Passenger Vehicles (PV) declined by
3.40 % to 556,421 units as against 576,034 units in corresponding period of the previous
year. In the PV segment, Passenger Cars exports was 433,441 units, Utility Vehicles
exports was 121,729 units and Vans exports was 1,251 units. Besides, exports of CV
segment registered a fall of 18.10% in April-December 2017 to 68,110 units as against
83,158 units in the same period last year. Under the CV segment, exports of M&HCVs
fell marginally by 0.43% and Light Commercial Vehicles dropped by 28.94% in April-
December 2017 over the same period of last year.
However, exports of three wheelers advanced by 30.27% in April-December 2017 to
282,901 units as against 217,166 units in corresponding period of previous year. Within
the three wheeler segment, Passenger Carrier and Goods Carrier grew by 29.92% and
65.72%, respectively in April-December 2017 over April-December 2016.
Furthermore, exports of two wheelers soared by 17.75 % in April-December 2017 to
2,069,400 units as against 1,757,391 units in corresponding period of the previous year.
Under the two wheeler segment, Scooters and Motorcycles reported a growth of 4.50
% and 20.21%, respectively but Mopeds recorded a fall of 28.56%
10
11
Performance of Passenger Vehicles
Performance of the industry

The Indian automobile industry has seen a positive growth in April-December 2017.
Total production in April-December 2017 grew by 11.27 % to 21,415,719 vehicles as
against 19,247,352 in April-December 2016 vehicles including passenger vehicles,
commercial vehicles, three wheelers, two wheelers and quadricycle. Total domestic
sales of the industry registered a growth of 11.28% at 18,519,618 vehicles in April-
December 2017, as against 16,642,203 vehicles sold in April-December 2016.
Meanwhile, overall exports also surged by 13.01% to 2,978,060 vehicles in April-
December 2017, as against 2,635,225 vehicles exported in April-December 2016.
Domestic production
In April-December 2017, India’s production of Passenger Vehicles (PV) recorded
5.41% growth at 2,936,406 vehicles as against 2,785,679 vehicles in the same period
previous year. Under PV segment, Passenger Cars production was 2,019,562 units,
Utility Vehicles production was 785,614 units and Vans production was 131,230 units.
Besides, total Commercial Vehicle (CV) production increased by 3.42% to 602,745
vehicles as against 582,810 vehicles produced in same period last year. Within CV
segment, medium and heavy commercial vehicles (M&HCVs) production decreased by
6.83%, while light commercial vehicle (LCVs) improved by 10.74%.
12
Production of three wheelers in April-December 2017 registered a growth of 15.09%
at 718,043 vehicles as compared to 623,885 vehicles in the same period previous year.
Under the three wheeler segment in April-December 2017, Passenger Carrier
production advanced by 15.85% and Goods Carrier grew by 9.97%. Meanwhile, two
wheeler productions surged by 12.48% in April-December 2017 to 17,157,262 vehicles
as against 15,253,491 vehicles in the corresponding period previous year. In the two
wheeler segment, production of Scooter/Scooterettee jumped by 17.02% and Motor
cycles/Step-Through grew by 11.81% but production of Mopeds dropped by 7.61%.
Domestic sales
The domestic sales of Passenger Vehicles (PV) grew by 8.13% in April-December 2017
to 2,425,911 units as against 2,243,522 units in the same period last year. Under the PV
segment, Passenger Cars sales was 1,618,940 units, Utility Vehicles sales was 664,230
units and Vans sales was 142,741 units in April-December 2017. Besides, the sales of
CV segment registered a growth of 15.19% in April-December 2017 to 574,337 units
as against 498,584 units in the same period last year. In the CV segment, sales of
M&HCVs and Light Commercial Vehicles increased by 9.27% and 19.29%
respectively, in April-December 2017 over the same period last year.
Three wheelers sales grew by 7.89% in April-December 2017 to 438,227 units as

against 406,178 units in the same period last year. Within the three wheelers segment,
Passenger Carrier sales soared by 8.25% and Goods Carrier sales grew by 6.39% in
13
April-December 2017 over April-December 2016. Meanwhile, two Wheelers sales
grew by 11.76% in April-December 2017 to 15,081,143 units as against 13,493,919
units in the same period last year. Under the Two Wheelers segment, Scooters sales
advanced by 18.52% and Motorcycles sales jumped by 9.77% but Mopeds sales
dropped by 6.15% in April-December 2017.
Exports
India’s overall exports have witnessed a positive growth but passenger and commercial
vehicles reported a fall for the April-December 2017 over same period of the last year.
In April-December 2017, country’s exports of Passenger Vehicles (PV) declined by
3.40 % to 556,421 units as against 576,034 units in corresponding period of the previous
year. In the PV segment, Passenger Cars exports was 433,441 units, Utility Vehicles
exports was 121,729 units and Vans exports was 1,251 units. Besides, exports of CV
segment registered a fall of 18.10% in April-December 2017 to 68,110 units as against
83,158 units in the same period last year. Under the CV segment, exports of M&HCVs
fell marginally by 0.43% and Light Commercial Vehicles dropped by 28.94% in April-
December 2017 over the same period of last year.
However, exports of three wheelers advanced by 30.27% in April-December 2017 to

282,901 units as against 217,166 units in corresponding period of previous year. Within
the three wheeler segment, Passenger Carrier and Goods Carrier grew by 29.92% and
65.72%, respectively in April-December 2017 over April-December 2016.
14
Furthermore, exports of two wheelers soared by 17.75 % in April-December 2017 to
2,069,400 units as against 1,757,391 units in corresponding period of the previous year.
Under the two wheeler segment, Scooters and Motorcycles reported a growth of 4.50
% and 20.21%, respectively but Mopeds recorded a fall of 28.56%.
15
PLAYERS
Maruti Suzuki
Country’s largest carmaker announced domestic market passenger vehicle sales of
139,189 units, which is a 4.1 percent growth over the previous year (January 2017:
133,768). Cumulative sales for the first 10 months of FY2018 are 1,195,347 units,
which marks 13.7 percent year-on-year growth. Having sold a total of 1,443,641 units
in FY2017, the company could be in line for the 1.5 million sales mark this fiscal. Right
now, it is 248,294 PVs short of the milestone. Given the sales trend, it should drive past
this number with ease in the next two months.
The entry level duo of the Alto and Wagon R hatchbacks sold a total of 33,316 units
last month, down 12.2 percent, indicating demand is shifting to other company models.
Acting as a strong buffer is the quintet of compact cars (Swift, Celerio, Ignis, Baleno
and Dzire) and utility vehicles (Gypsy, Ertiga, S-Cross and Vitara Brezza) which
continue to beef up overall numbers.
At 67,868 units sold (January 2016: 55,817), the five compact cars posted strong 21.6
percent. Now, with the new Swift soon to be launched, expect this segment to see a
surge in demand. Maruti UVs, due to the continuing demand for the Vitara Brezza, sold
20,693 units, up 26.8 percent (January 2017: 16,313).
Sales of the premium Ciaz sedan continue to see a decline and in January, the car sold
a total of 5,062 units, down 22.5 percent (January 2017: 6,530).
The two ubiquitous Maruti vans, the Omni and the Eeco together sold 12,250 units,
down 13.6 percent (January 2017: 14,179).
Market leader in the passenger vehicles segment and held around 50 per cent market
share in the segment in FY18. The company recorded its highest ever sales of 1,779,574
units during 2017-18, a year-on-year increase of 13.4 per cent.
16
Tata Motors
Tata Motors clocked domestic PV sales of 20,055 units (January 2017: 12,907), surging
ahead at a significant 55 percent growth rate. What boosted the company's sales is the
good demand for the recently introduced Nexon compact crossover, launched in
September 2017, which has emerged in the voluminous sub-10 lakh rupee UV price
segment. Driven primarily by the Nexon, Tata’s UV sales grew by a tremendous 188
percent, and the sales of its passenger cars, driven by the Tiago hatchback, registered a
27 percent growth in the month.
With an aim to become a permanent placeholder in the Top 3 players in the country,
the homegrown manufacturer is all set to showcase its new range of products - one in
the premium hatchback category, codenamed the X451, a new sedan, and a new full-
size SUV based on the Land Rover Discovery, as well. The new products target to
broaden Tata's footprint across various vehicle segments in the market in the near
future.
According to Mayank Pareek, president, Passenger Vehicles Business Unit, Tata

Motors, “We are happy to report that our strong sales performance continues in January
2018 and we have started 2018 with determination. This month, we have grown by 55
percent over last January, on the back of good demand for our new generation products
– Tiago, Tigor, Nexon and Hexa. While Tiago continues to lead the growth in cars at
27%, the Nexon and HEXA have attracted new set of SUV buyers, resulting in 188
percent growth in UVs. We continue to be optimistic and hope this growth momentum
continues.
17
Honda Cars India
Honda Cars India has sold 14,838 units in January 2018, down 5 percent (January 2017:
15,592). Between April 2017 to January 2018, the company has sold 144,802 units, up
17 percent against 124,114 units in the corresponding period last year.
In January 2018, the WR-V led the charge with 4,273, followed by the City (3,968),
Amaze (2,836), Jazz (2,257), BR-V (1,071), Brio (422) and CR-V (11).
Yoichiro Ueno, president and CEO, Honda Cars India, said, HCIL has witnessed strong
growth of 17 percent in the ongoing fiscal year and we expect the market to further pick
up after the anticipations regarding Union Budget are stabilized. HCIL will showcase
our strong line-up for the next fiscal at the upcoming Auto Expo which will further
strengthen our position in the Indian market.
With a major push given to the rural economy and significant investment in the
infrastructure development under the Union Budget 2018, the outlook for automotive
sector looks optimistic. This should further boost the sales volume marking a fruitful
year for the manufacturers.
18
Toyota Kirloskar Motor
Toyota Kirloskar Motor recorded robust sales growth in January 2018, selling 12,351
units which marks 19 percent year-on-year growth (January 2016: 10,336). The
company also exported 888 units of the Etios series last month, thus clocking a total of
13,239 units.
Commenting on the sales performance, N Raja, deputy managing director, Toyota

Kirloskar Motor, said, “It is a delight to usher in the new year with double-digit growth.
We are happy to have sustained the positive growth momentum post GST. The
customer demand has consistently been strong and we have catered to the growing
customer demand.”
The success story of Innova Crysta and Fortuner sales growth continues to the New
Year. Customers continue to highly appreciate both the products and we are pushing
our production capacity to fulfill the strong demand in the market. The Corolla retains
its position as the segment leader with overwhelming performance in the month of
January.
We are looking forward to the upcoming Auto Expo 2018 to showcase our premium
new launch, facelifts and concepts with a show-stopping reveal and many more
distinctive displays under the thematic banner of ‘Driven by a Better Future, he added.
We hope the Union Budget 2018 brings in more growth-oriented measures to promote
growth of the auto industry. The government should aim at a more long-term policy so
as to lower the effect of Budget tinkering and bring long-term stability. Considering
the critical issue of environment pollution, we hope the government relaxes the tax rate
in favour of clean and green technologies such as strong hybrids similar to the pre-GST
era.
With the Auto Expo getting started next week, the entire industry and the customers are
excited and anxious about the slew of new products and technologies, which would be
unveiled at the extravaganza. The product showcase and some new launches stay tuned
for more action in this space.
19
SEGMENTS
Two Wheelers
Two-wheelers which comprise of mopeds, scooters, motorcycles and electric two-

wheelers
Three Wheelers
Three Wheelers that are passenger carriers and goods carrier
Passenger Vehicles
Passenger Vehicles which include passenger cars, utility vehicles and multi-purpose
vehicle
Commercial Vehicles
Commercial Vehicles that are light and medium-heavy vehicle
Total passenger vehicles (PV) sales:
The Indian passenger vehicle industry’s sales for the month of March, 2018 recorded a
growth of 6.4% and stood at 300,722 units, as against 282,698 units in the same month
last year. On cumulative basis, a growth of 7.9% was recorded for the period April 2017
to March 2018 as compared to April 2016 to March 2017 for passenger vehicles.
Passenger cars segment recorded a growth of 0.4%, while Utility vehicles which remain
the new favorite of car buyers within the passenger vehicle space, posted a strong
growth of 17.7% during the month of March, 2018. Van sales posted a growth of 23.0%
during the month. On cumulative basis passenger cars, utility vehicles and vans
recorded a growth of 3.3%, 21.0% and 5.8% respectively.
20
April- April-
Segment March March
Growth Growth
2016-17 2017-18 2016-17 2017-18
(%) (%)
Passenger
190,236 191,082 0.4 2,103,847 2,173,950 3.3
Cars
Utility
77,697 91,483 17.7 761,998 921,780 21.0
Vehicles
Vans 14,765 18,157 23.0 181,737 192,235 5.8
Sub-Total 282,698 300,722 6.4 3,047,582 3,287,965 7.9
2-wheeler sales:
In March, 2018, the sales growth has been driven by strong growth in motorcycles in
addition to the continued momentum across the range of scooters. During the month of
March, 2018, 2-wheeler sales witnessed a growth of 18.3%, and on cumulative basis
the growth was 14.8%.
Scooter sales recorded a growth of 6.4% by selling 518,015 units. Motorcycles recorded
a growth of 25.1% in sales by selling 1,145,221 units while moped sales recorded a
growth of 12.4% by selling 78,413 units. On cumulative basis, scooter and motorcycles
sale recorded a growth of 19.9% and 13.7% respectively, while moped sales continued
to decline at -3.5%.
Increasing rural income, better road connectivity, new product launches and upgrades
of existing models along with expanding dealer network have contributed to the
increased sales of 2-wheelers.
The prediction of a near normal monsoon during 2018-19 along with low cost of
ownership would boost 2-wheeler sales in the next year also leading to sustained growth
in MS sales.
21
April- April-
March March
Segment
Growth Growth
2016-17 2017-18 2016-17 2017-18
(%) (%)
Scooter/
486,604 518,015 6.4 5,604,673 6,719,911 19.9
Scooterette
Motor
915,259 1,145,221 25.1 11,094,547 12,613,241 13.7
Cycles
Mopeds 69,773 78,413 12.4 890,518 859,520 -3.5
Sub Total 1,471,636 1,741,649 18.3 17,589,738 20,192,672 14.8
Commercial vehicles (CV) sales:
The growth in commercial vehicle sales was facilitated by infrastructure growth,

fresh tenders in car carriers and coal transportation. Further, increasing demand
from the construction, logistics, e- commerce and FMCG sectors gave a boost to
this market. Commercial vehicles were leading the automobile sales in the month
of March, 2018 and witnessed a growth of 24.6%. Overloading regulations and
replacement buying pushed demand for higher tonnage trucks and tippers that
boosted the growth in the M&HCV segment. M&HCV recorded a growth of
16.3% March, 2018 by selling 45,760 units as compared to 39,353 units in March,
2017. On cumulative basis, M&HCV recorded a growth of 12.4%.
Light Commercial Vehicle (LCV):
The LCV segment performed strongly, witnessing a 31.3% growth driven by

rising demand from e-commerce and logistics sectors. LCV sector contributed
sales of 62,921 units as against a historical of 47,905 units during the month. A
growth of 25.4% was recorded for the segment for the period April 2017 to March,
2018.
22
April-March April-March
Growth Growth
Segment 2016-17 2017-18 2016-17 2017-18
(%) (%)
M&HCV 39,353 45,760 16.3 302,567 340,313 12.4
LCV 47,905 62,921 31.3 411,515 516,140 25.4
Total
Commercial 87,258 108,681 24.6 714,082 856,453 19.9
Vehicles
Domestic Market Share for 2017-18
13% 3%
3%
Passenger Vehicles
Commercial Vehicles
Two Wheelers
Four Wheelers
81%
23
KEY DEVELOPMENTS
Luxury vehicles
 With sales of around 40,000 luxury cars in 2017, India became the 27th most
attractive luxury market in the world. The luxury car market in India is expected
to grow at 25 per cent CAGR till 2020.
 BMW Group India recorded its highest ever annual sales in 2017 at 9,800 units.
 Mercedes-Benz crossed 16,000 annual sales for the first time in India and sold
16,236 units in 2017-18, recording a 22.5 per growth during the year.
 Premium motorbike sales in India are expected to reach 20,000 units by 2020.
Electric vehicles
 Mahindra has launched its new electric car and Tesla motors is also set to enter
the Indian market. Suzuki Motors is setting up a battery plant in Gujarat. Electric
buses from Tata Motors are in testing phase.
 India's electric vehicle (EV) sales increased to 25,000 units during FY 2016-17
and are poised to rise further on the back of cheaper energy storage costs and
the Government of India’s vision to see 6 million electric and hybrid vehicles
in India by 2020.
 Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in
2017-18.
New financing option
 Car makers such as BMW, Audi, Toyota, Skoda, Volkswagen and Mercedes-
Benz have started providing customized finance to customers through NBFCs.
 Major MNC & Indian corporate houses are moving towards taking cars on
operating lease instead of buying them.
24
Regulations
 Government of India is focused on aggressive up gradation of standards to

expedite reaching global benchmarks, especially in safety, emissions and fuel
consumption.
 Regulatory announcements have taken place recently such as skipping of Bharat
Stage (BS)-V emission norms and earlier introduction of BS-VI from 2020,
requirement of corporate average fuel consumption standards for Passenger
Vehicles and approaching implementation of Bharat New Vehicle Safety
Assessment Program (BNVSAP).
25
PLANS AND PROGRAMMES
The automobile sector in India has immense potential for driving economic growth and
employment and also supporting a host of other manufacturing industries like auto-
components, machine tools, steel, aluminum, plastics, chemicals, electronics, etc. In
addition, the auto sector also supports the services sector which includes IT and
software, banking, insurance, repair and maintenance, transport and logistics including
public transport etc. The Government of India had not only simplified and streamlined
the regulatory policies framework for ease of doing business but also launched
Automotive Mission Plans for 2006-2016 in 2006 and AMP 2016-2026 in 2016. The
other major programmes/plans initiated by the Government include Faster Adoption
and Manufacturing of (hybrid &) Electric Vehicles (FAME) and National Electric
Mobility Mission Plan (NEMMP) 2020. These programmes/plans envisioned a robust
and faster growth of vehicles to attain the coveted place among the world leaders in
automobile sector like USA, Japan, Europe and China. The major programmes/plans
are outlined hereunder.
National Automotive Testing and R&D Infrastructure Project (NATRiP)
The Government has initiated a flagship National Automotive Testing and R&D
Infrastructure Project (NATRiP) which was approved by Cabinet Committee on
Economic Affairs (CCEA) in July 2005 to create a testing, validation and R&D
infrastructure, with the investment of Rs 1,718 crore for setting up of seven auto testing
facilities at seven locations across India by 2011. The purpose of the project was to
develop infrastructure for world class automotive testing and homologation with
objective of helping Indian automobile industry to adopt and implement world class
standards for safety, emissions and performance. To steer the implementation of the
project, a NATRIP.
26
The National Electric Mobility Mission Plan 2020 (NEMMP)
The National Electric Mobility Mission Plan (NEMMP) 2020 was conceived and
launched in 2013 to promote EVs and HEVs to enhance the domestic manufacturing
capabilities to ensure ecological and energy security. The NEMMP envisages strategies
to achieve the objective of efficient, environmentally friendly, affordable EVs by 2020.
The NEMMP 2020 aims for production of 6-7 million units per annum by 2020 with
full range of Electric Vehicles (xEVs) and fuel savings of 2.2 – 2.5 million tons by
2020. The implantation of NEMMP is expected to bring down the vehicular emissions
and reduce GHG like Carbon Dioxide (CO2) emissions by 1.3% to 1.5% by 2020.
Smart Cities Programme
The Government of India has launched the Smart Cities Mission on 25 June 2015 to
promote sustainable and inclusive cities that provide core infrastructure, clean
environment, low carbon transportation which is affordable and sustainable and give a
decent quality of life to its citizens. The Smart Cities Mission for development of 100
smart cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT)
of 500 cities provides for outlays of Rs. 48,000 crore and Rs. 50,000 crore respectively
with the objective of making our cities more livable, sustainable and inclusive besides
driving the economic growth.
The Automotive Mission Plan 2016-26 (AMP 2026)
After the successful completion of the AMP 2006-2016, the Government has
formulated another AMP 2 - 2016-2026, a curtain raiser for further consolidating the
automobile growth by setting targets and goals for the next ten years started from 2016.
The final version of AMP 2016-2026 is being readied by the MoHI&PE. Like previous
AMP, the present AMP 2016-2026 is focused on strategies for enhanced automotive
growth, contribution to GDP, minimizing carbon footprints, attaining high level of
technological competence & maturity. The AMP 2016-26 is being executed with better
27
planning, time targeted strategies in coordination with all stakeholders to meet the
growth and export targets.
The AMP-2026 is aiming for sustained automotive growth with revenue of USD 260
billion to 300 billion in 2026. The AMP-2026 focuses on the segmental growth in
passenger vehicles to be 9.4 - 13.4 million units, commercial vehicle between 2.0 - 3.9
million units, two-wheelers to 50.6 - 55.5 million, and tractors to 1.5 - 1.7 million units.
The overall objective is to bring India at par with the global giants of the automotive
sector of the world with contribution over 12% to GDP. The AMP-2026 strives to
achieve job creation for 65 million people by the end of 2026 and increasing the exports
to 35-40 percent of overall output. In addition, the AMP-2026 envisaged end of life
policy of vehicles, universalization of BS-IV norms and up-gradation to BS-V/VI
emission norms. Currently, the BS-IV norms are being implemented across the country
from 1st April 2017 and BS-VI norms (leapfrogging) are to be adopted by April 2020
as notified on 16thSeptember 2016 by the Ministry of Road Transport and Highways.
Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India

(FAME)
In April 2015, the Government launched a scheme for the Faster Adoption and
Manufacturing of (HEVs &) Electric Vehicles (FAME India) with a budget of Rs. 795
crore for the first phase (2015-16 & 2016-17) of the scheme. Under the scheme,
incentives are provided to electric and hybrid vehicles of up to Rs 29,000 for bike and
Rs 1.38 lakh for car. However, the Government had allocated Rs 795.00 crore for
FAME phase I but only Rs. 219.00 crore was utilized in phase-I of the scheme.
New Green Urban Transport Scheme (GUTS),
The Government has recently conceptualized a new scheme called ‘Green Urban
Transport’ for improving and upgrading the public transport in urban areas along the
low carbon pathway. The scheme envisages to reduce the carbon footprint and to
promote low carbon sustainable public transport system. The scheme will help provide
a sustainable framework for funding urban mobility projects with minimum recourse to
28
budgetary support by encouraging innovative financing of projects. Under the Green
Urban Transport Scheme (GUTS), the government would focus on creating non-
motorized transport infrastructure, adoption of intelligent transport systems (ITS),
increasing access to public transport, use of clean technologies and participation of
private sector would be encouraged. The scheme will be executed with the help of
private sector including assistance from the central and state governments under a
seven-year mission with a total cost of Rs 70,000 crore for which 103 cities have been
identified in the first phase. The financial arrangement envisages 10% of total outlay
will met by urban local bodies and 30% each by the Centre and States, and the rest
would be raised as loan by multi-lateral agencies. Initially, the scheme is proposed to
be executed in cities with a population of 5 lakh and above and all the capital cities. An
initial amount of about Rs.25, 000 crore as central assistance, is proposed to be made
available for the project.
FDI POLICY
100% Foreign Direct investment (FDI) is allowed under the automatic route in the auto
sector, subject to all the applicable regulations and laws.
The sector attracted US$ 18.43 Billion in foreign direct investment between April 2000
and December 2017. This stupendous growth is expected to continue as it is estimated
that sector would attract additional USD 8-10 billion in local and foreign investment by
2023.
29
ROAD MAP
The landscape of regulatory policies in automotive sector in India is highly dynamic

and rapidly evolving and changing fast. Like Information Technology and
Telecommunication sectors, the future of automobile industry is at cusp of a complete
transformation. So far, the policies and regulations under the automobile sector have
been incremental and gradual, however, the recent decisions like leapfrogging to BS-
VI emission norms, 100% electric vehicles by 2030 in public sector, methanol
economy, fuel efficiency norms etc. are metamorphic with highly compressed
transitional phases as compared to the transition time given to industry in other
countries, and will have profound impact on entire automotive ecosystem. Some of the
transformational regulatory policies that may have radical impact on the automotive
sector are outlined below:
Tightening of Emission Norms and Leapfrogging to BS-VI Norms
In view of improving the air quality of our cities and towns, Bharat Stage emission
standards were first introduced in 1991-1992. Thereafter progressively and steadily, the
stringent norms have been rolled out. In 2000 and 2001, BS-II norms were implemented
in Delhi, Kolkata, Mumbai and Chennai and BS-I norms were made mandatory in the
rest of the country. Since April 2010, Bharat Stage (BS) III norms have been enforced
across the country and Bharat Stage IV emission norms in 13 major cities. The BS-VI
emission norms have been notified on 16th September 2016 by the Ministry of Road
Transport and Highways in the CMVR, 1989.
The leapfrog to BS-VI norms by 2020 skipping BS-V emission norms will reduce 82%
in the emission of particulate matter and 68% in NOx emission in diesel cars. The
additional benefit is only in terms of NOx emissions, which is tightened by additional
40% over the BS V levels and HC + NOx is tightened by additional 20%. Around 50%
additional reduction in emission of particulate matter and an additional reduction of
30
44% in the emission of NOx is expected in heavy duty diesel vehicles. Therefore,
emission benefits by leapfrogging is maximum in the segment of heavy duty vehicles.
100% electric vehicles in Public and 40% in Private Sector by 2030
The National Institution for Transforming India or NITI Aayog, has launched a report
on ‘India Leaps Ahead: Transformational Mobility Solutions for All’ on 12th May 2017
for a complete transformation of mobility to 100% electric vehicles in public and 40%
in private sector by 2030. The report of the NITI Aayog envisioned a paradigm shift of
mobility by adopting new and sustainable model for clean, cost-effective, efficient that
is not only safe but job oriented, least energy intensive (reduced oil import bill) but also
have minimum adverse impact on environment and human health. The report envisages
three phased roadmaps for Electric Mobility up to 2032. The 1stphase (2017-2019) will
focus on institutional capacity building and aggregating Interoperable Transport Data
(ITD) with enabling mobility solutions. The 2nd phase (2020-2023) focuses on the
development of markets, infrastructure and production capabilities in tandem with
innovative business models. In the last phase (2024-2032), it is expected that the costs
of EVs would come down significantly and achieve economies of scale.
Fuel Efficiency Norms
The Government of India has recently notified the new fuel efficiency norms for
passenger vehicles in April 2015. The new fuel efficiency standards have come into
force in April, 2017. The fuel economy standards have notified for petrol, diesel,
liquefied petroleum gas (LPG) and compressed natural gas (CNG) passenger vehicles.
The standards are based on a Corporate Average Fuel Consumption (CAFC) system.
The regulations envisaged that between 2017 and 2022 cars should be 17% more fuel
efficient.
31
End-of-Life (ELV) of Vehicle Policy
The vehicle owners in India tend to continue to use their vehicles well beyond the
expected life of the vehicle. Such vehicles emit higher emission, have lower fuel
efficiency and lesser safety features. Therefore, there is a need for an incentive based
scheme to encourage vehicle owners to replace their older vehicles with new generation
products which are more efficient, safe and environmentally benign. At present, India
does not have a robust national policy on end-of-life of vehicles, though the
Government is working on it for quite some time. The Government had published a
draft policy two years ago for consultation with stakeholders and public.
32
KEY POLICIES
Roll out a comprehensive long-term roadmap for the automotive industry
Government of India has demonstrated its clear intention to curb vehicular pollution
through pivotal initiatives such as Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles (FAME) scheme, and regulatory measures such as early introduction
of Bharat Stage- VI in 2020.
While the industry prepares to meet the BS-VI timeline, it is important to provide
visibility on emission standards even beyond BS-VI, to enable the industry to plan it
technology and investment roadmap. The policy therefore proposes to roll out a
comprehensive long-term roadmap for the automotive industry.
This roadmap will in turn enable the industry and support agencies to define the
requirement of technologies, testing facilities, skill development and plan long-term
investments.
Implement reduction in CO2 emissions through Corporate Average Fuel

Economy (CAFE) regulations
Fuel consumption standards for Indian vehicles came into force in India in April 2017
for petrol, diesel, liquefied petroleum gas (LPG) and compressed natural gas (CNG)
passenger vehicles. These standards are based on a Corporate Average Fuel Efficiency
(CAFE) system and targets to bring about around improvement in fuel consumption of
passenger vehicles by 2022. The policy supports a continuous reduction in CO2
emissions through Corporate Average Fuel Economy (CAFE) regulations
Phase I:
Define corporate average fuel efficiency standards (CO2 g/km) for all passenger
vehicle manufacturers from 2020 onward.
Evaluate and notify difference between target and actual fuel efficiency in CO2 g/km
33
Define and levy penalties for manufacturers with average fuel efficiency above target
Phase II:
Develop provisions for banking of CO2 credits and trading of credits between
companies
Allow manufacturers to form a pool to jointly meet their CO2 emission targets
Introduce a composite length and emissions based criterion for vehicle taxation
Over the years, the industry has seen various parameters for classifying vehicles. A
number of these classification criteria is also used for taxation purposes. The policy
proposes to introduce a composite length and emissions based criterion for vehicle
taxation. Each dimension of the classification framework will be aligned to meet the
key objectives of reduction in congestion and CO2 emission.
Rationalize the GST structure for automobiles that is currently based on length, engine
displacement, engine type and ground clearance
Replace the current classification criteria with a composite criterion based on vehicle
length and CO2 emissions (refer annexure 1)
Implement measures to increase exports of vehicles and components
Conduct a detailed study of business environment, procedures, infrastructure etc. in

export dominant countries such as China and Japan to identify areas of improvement in
India.
Identify and initiate trade agreements with countries having attractive markets for
Indian automotive exports, in consultation with SIAM and ACMA.
Consider phased increase of duty credit scrips (from 2%) for export of vehicles and
auto components in line with comparable products to target countries under
Merchandise Export from India Scheme (MEIS).
34
Improve the skill development and training eco-system
Increase the accountability of Automotive Skills Development Council (ASDC)

through performance based funding linked to metrics such as incremental employment
generated, level of employment, curriculum coverage, industry feedback etc.
ASDC to implement a Labour Market Information System (LMIS) for aggregated

information of certified candidates and serve as a marketplace to match demand and
supply of skilled labour.
Conduct a detailed study to assess the logistics challenges being faced by the auto
industry
The auto policy emphasizes the need to assess the logistics challenges being faced by
the auto industry and based on the results of the study, support the development of a
world-class logistics infrastructure such as:
Develop Automotive Logistics Parks around existing automotive clusters with shared
warehousing infrastructure and integrated connectivity to roads, railways, ports and
coastal sea routes
Improve the modal mix of cargo transportation and improve the utilization of low-cost
modes such as railways, coastal shipping etc.
Improve port infrastructure to facilitate exports and ports of automobiles and

components, such as dedicated storage space in ports
35
FINANCIAL ANALYSIS
Industry Analysis
Current ratio
0.94 0.92
0.92
0.9
0.88
0.86 0.84
0.84 0.82
0.82
0.8
0.78
0.76
Current Ratio
2015 2016 2017
The current ratio for two wheeler and three wheeler industry is 0.84 as compared to
previous year is 0.92 which indicates inability to meet adequately its short-term
obligations.
The main reason for decrease in ratio is cash and bank balance. In the year 2017 the
cash balance is 756.536 to that of base year 2016 is 1,193.799 which indicate there is
substantially decrease in the liquidity less cash is available in current year to service the
short term obligation so the industry is not able to meet its current obligations.
Quick Ratio
0.12 0.11
0.1
0.079
0.08 0.066
0.06
0.04
0.02
0
Quick Ratio
2015 2016 2017
36
The quick ratio for two wheeler and three wheeler industry is 0.066 as compared to
previous year is 0.12 which indicates that industry ability to service short-term
obligations is unfavorable.
The reason being decrease in cash and bank balances for the current year. In year 2017
the cash balance is 756.536 to that of base year 2016 is 1,193.799 there is decrease in
cash by 437.536 which affects the ratio of the industry.
Sales to Net Fixed Asset

0.15 0.14
0.12
0.11
0.1
0.05
0
Sales to Fixed Assets
2015 2016 2017
The sales to fixed assets ratio for two wheeler and three wheeler industry is 0.14 as
compared to previous year is 0.12 which indicates the industry is making good use of
its fixed assets to effectively Generate sales.
As there is an increase in the assets of the industry, In year 2017 the assets is 9463.239
to that of year 2016 is 8438.622, as there is increase in assets which indicates that assets
are properly utilized for generating the sales.
Return on Assets
40 38.15
38
36 34.6
34 32.37
32
30
28
Return on Assets
2015 2016 2017
37
The percent rate of return on assets for two wheeler and three wheeler industry is 32.37
as compared to previous year is 38.15 which indicates there is a need for improvement
in this area to ensure industry can remain continue to operate successfully.
The industry need to increase the sales to increase the earning. As there is slow growth
in sales which affect the profit of the Industry, these effect gives decrease in ROA.
Return on Equity
50 44.39 47.37
39.16
40
30
20
10
0
Return on Equity
2015 2016 2017
The percent rate of return on equity for two wheeler and three wheeler industry in year
2018 is 39.16 as compared to previous year 2017 is 47.37 which indicates management
may not be effectively managing the profits earned based on the owners investment.
There is increase in capital of Industry but the profit of the Industry is not growing at
that Rate, The reason being slow growth in the volume of sales. The Industry need to
boost up its sales for the better Profits of the industry.
38
Company profile
Maruti Suzuki
Maruti Suzuki India Limited (MSIL), formerly known as Maruti Udyog Limited, a
subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car
company, accounting for over 50 per cent of the domestic car market. Maruti Udyog
Limited was incorporated in 1981 under the provisions of Indian Companies Act 1956
and the government of India selected Suzuki Motor Corporation as the joint venture
partner for the company. In 1982 a JV was signed between Government of India and
Suzuki Motor Corporation.
It was in 1983 that the India’s first affordable car, Maruti 800, a 796 cc hatch back was
launched as the company went into production in a record time of 13 month.
More than half the number of cars sold in India wear a Maruti Suzuki badge. They are
a subsidiary of Suzuki Motor Corporation Japan. The company offer full range of cars-
from entry level Maruti 800 & Alto to stylish hatchback Ritz, A star, Swift, Wagon R,
Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara.
Since inception, the company has produced and sold over 7.5 million vehicles in India
and exported over 500,000 units to Europe and other countries.
Product range of the company includes:
It offer full range of cars- from entry level Maruti 800 & Alto to stylish hatchback Ritz,
A star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand
Vitara.
 Maruti Alto 800

 Omni
 Gypsy
 Zen Estilo
 Wagon R
 Versa
 A- Star
 Ritz
 SX4
 Dzire
 Grand Vitara
39
Maruti Suzuki Company Analysis
Current Ratio
0.8 0.711
0.664
0.7
0.6 0.513
0.5
0.4
0.3
0.2
0.1
0
Current Ratio
2016 2017 2018
The current ratio for Maruti Suzuki in year 2018 is 0.513, which compared to the
baseline in the year 2017 is 0.664 which indicates that inefficient use of working capital.
As decrease in liquid assets (current investment) was 12173 in 2018 as compared to
previous year 21788 that is 2017 and also increase in short term borrowing in year 2018
is 1108 as compared to previous year 2017 was 4836. So the company is not in a
position to meet its current obligations.
Quick Ratio
0.5 0.429 0.42
0.4 0.309
0.3
0.2
0.1
0
Quick Ratio
2016 2017 2018
The quick ratio for Maruti Suzuki in year 2018 is 0.309, which compared to the baseline
in year 2017 is 0.420 which indicates the company's ability to service short-term
obligations is not favorable. As decrease in current investment for the year 2018 was
12173 as compared to previous year 2017 is 21788.
40
Sales to Net Fixed Assets
5 4.548
4.091
4
3.114
3
2
1
0
2016 2017 2018
Sales to net fixed assets for Maruti Suzuki for the year 2018 is 4.091, which compared
to the baseline for the year 2017 is 4.548 indicates the company is not making use of
its fixed assets to effectively generate sales.
Return on Assets
20
15.775
13.961
15 12.695
10
0
Return on Assets
2016 2017 2018
The percent rate of return on assets for Maruti Suzuki in year 2018 is 13.96%, which
compared to the baseline in year 2017 is 15.77% which indicates there is a need for
improvement in this area to ensure the company can remain competitive and continue
to operate successfully.
41
Return on Equity
23 22.167
22
21
20.02 19.752
20
19
18
Return on Equity
2016 2017 2018
The percent rate of return on equity for Maruti Suzuki in year 2018 is 19.75%, which
compared to the baseline in year 2017 is 22.16% which indicates management may not
be effectively managing the profits earned based on the owners investment in the
company.
Debt to Equity
0.014 0.013
0.012
0.01
0.008
0.008
0.006
0.004 0.003
0.002
0
Debt to Equity
2016 2017 2018
The debt to equity ratio for Maruti Suzuki in year 2018 is 0.003, which compared to the
baseline in year 2017 is 0.013 which indicates there is an efficient use of equity and
debt with the way the company is financed
42
Company Profile
Tata Motors
Tata Motors was established in 1945 as Tata Engineering and Locomotive Co. Ltd. to
manufacture locomotives and other engineering products. It is India's largest
automobile company, with standalone revenues of Rs. 25,660.79 crores (USD 5.5
billion) in 2008-09. It is the leader in commercial vehicles in each segment, and among
the top three in passenger vehicles with winning products in the compact, midsize car
and utility vehicle segments. The company is the world's fourth largest truck
manufacturer, and the world's second largest bus manufacturer.
The company's 23,000 employees are guided by the vision to be 'best in the manner in
which they operate best in the products they deliver and best in their value system and
ethics.
Product range of the company includes:

Passenger Cars:
 Indica Vista, Indica V2, Indica V2 Turbo, Indica V2 Xeta, Indica V2 Dicor.,
Aria, Zest and Bolt (upcoming)
 Indigo XL, Indigo, Indigo Marina Indigo CS.
 Nano.
Trucks:
 Medium & Heavy Comm. Vehicles, Tata Novus.

 Intermediate Comm. Vehicles.
 Light Commercial Vehicles, TL 4×4, Small Commercial Vehicles.
Commercial Passenger Carriers:
 Buses.
 Winger.
 Magic
43
Tata Motors Company Analysis
Current Ratio
0.64 0.634
0.618
0.62
0.6 0.592
0.58
0.56
Current ratio
2016 2017 2018
The current ratio for Tata Motors in year 2018 is 0.618 which compared to the baseline
in the year 2017 is 0.592, which indicates the company's ability to service short-term
obligations is satisfactory.
As the reason for increase in Trade Receivables (net of allowance for doubtful debts)
were 3,479.81 crores as at March 31, 2018, representing an increase of 63.5% compared
to `2,128.00 crores as at March 31, 2017.
The allowances for doubtful debts is 543.50 crores as at March 31, 2018 compared to
693.17 crores as at March 31, 2017. The increase in Trade receivable is due to year end
billings both at Tata Motors Ltd and Fiat India Automobiles Private Ltd.
Quick Ratio
0.4
0.384
0.38
0.361
0.36
0.34 0.334
0.32
0.3
Quick Ratio
2016 2017 2018
The quick ratio for Tata Motors in year 2018 is 0.384, which compared to the baseline
in year 2017 is 0.334.which indicates the company's ability to service short-term
obligations are favorable. As increase in cash and bank balance it indicates that
company is more liquid to meet its current obligations.
44
As the reason for increase in cash and bank balance is 7954.20 crores, as at March 31,
2018, compared to 3266.10 crores as at March 31, 2017. The increase was mainly
attributable to balances with banks and cheques on hand, offset by deposit with banks.

1.5 1.436
1.4 1.333
1.3 1.239
1.2
1.1
2016 2017 2018
Sales to net fixed assets for Tata Motors in year 2018 is 1.43, which compared to the
baseline for the year 2017 is 1.23 indicates the company is making use of its fixed assets
to effectively generate sales.
As the Reason increase in Revenue from operations of the Company for 2018 59,624.69
crores as compared to previous year 49,054.49 crores, increased by 21.5%. Total
numbers of vehicles sold were 636,968 units in year 2018.
Debt to Equity Ratio

1 0.915 0.915
0.8 0.708
0.6
0.4
0.2
0
Debt to Equity
2016 2017 2018
The debt to equity ratio for Tata Motors in year 2018 is 0.915, which compared to the
baseline in year 2017 is 0.915, there is no change in the equity.
45
Inventory Turnover Ratio
11 10.625
10.5
10
9.553
9.5 9.194
9
8.5
8
Inventory Turnover Ratio
2016 2017 2018
The inventory turnover ratio for Tata Motors in year 2018 is 10.625, which compared
to the baseline in year 2017 is 9.914 which indicates that there is no efficient inventory
management due to slow moving, obsolete or poor quality goods which the company
may not be able to sell.
As increase in inventory, 2018 is 5,670.13 crores as compared to 5,553.01 crores in

year 2017, an increase of 2.1%. In terms of number of days of sales, finished goods
represented 13 inventory days in Fiscal 2018 as compared to 23 days in year 2017.
Debtor Turnover Ratio

35
29.989
30
23.507
25 21.625
20
15
10
5
0
Debtor Turnover Ratio
2016 2017 2018
The debtor turnover ratio for Tata Motors in year 2018 is 21.26, which compared to the
baseline in year 2017 is 23.50 and average collection period in year 2018 is 17.16 to
that of base line for year 2017 is 15.52 which indicates implies liberal credit and
collection policy, the company is able to recover its receivables.
46
CONCLUSION
The Indian Automobile sector is growing massively every passing year and holds good
growth potential for long term owing to steady economic growth, technological, cost
and manpower advantage. The changing market trends and rising consumer demand
have always been key driving forces for the industry. The country’s automobile sector
is dominated by two-wheelers and passenger vehicles. With increasing population there
would be huge demand for passenger cars and electric vehicles. The Indian government
is taking initiatives to support the growth of electric cars in order to meet the emission
reduction targets. Furthermore, implementation of Goods and Service tax (GST) has a
positive effect on the sector and increase in custom duties on automobile and
automobile parts that was announced in the Union budget is likely to boost the domestic
automobile industry as it will increase prices of imported items related to the sector
which will ultimately provide adequate protection to domestic industry
Finally to conclude the Indian automobile market seems to be the strongest Growing
market among all those automobile market present across the globe at Present. The
important factors for steady and rapid growth of automobile sector in India includes,
Foreign Direct Investment (FDI) in Automobile Industry (to Complement), purchasing
powder capacity, Government support and auto-finance Facility on liberal terms.
However, Vision 2020 – requires more capital investment, Increase in installed
capacity, technology improvements, trained manpower, and increase In international
market share for export and increasing the organized sector (from the Present
unorganized) in ACMA (OEM’s) with its capacity to cater to the Requirement of the
automobile manufacturers in all segments. The challenges, if Tackled well by the
Government, the Indian Automobile Industry will achieve the said Amp 2016 and will
be the third largest market by 2020 and will be the world’s largest market by
2050.Automobile industry plays a vital role in the fabric of Indian economy. This sector
of industry has made a rapid & steady growth in India, particularly after 90s due to
delicensing, favorable Government policy and whole hearted support of the
Government, opening up of the automobile industries for 100% FDI, increase in
purchasing power capacity of middle class and easy and cheap auto-finance facility.
47
REFERENCES
 Export-Import Bank of India,

https://www.eximbankindia.in/Assets/Dynamic/PDF/.../Research
Papers/49file.pdf, accessed February 2017
 International Journal of Emerging Research in Management &Technology
ISSN: 2278-9359 (Volume-6, Issue-5),
https://www.researchgate.net/publication/319371998_Growth_of_Indian_Aut
omobile_Industry/Research Article, accessed may 2017
 Info shine,http://info.shine.com/industry/automobiles-auto-ancillaries/3.html
 KPMG (2018), Indian Automotive Supply Chain– A Discussion paper
Available: http://www.in.kpmg.com.
 Automotive (2006), “Automotive Mission Plan 2006-2016 – A Mission for
Development of Indian Automotive Industry”, Ministry of Heavy Industries
& Public Enterprises, Government of India. http://dhi.nic.in.
 Automotive Component Manufacturers Association of India, ACMA
Presentation, PDF Report, 17-26,
http://www.acma.in/docmgr/ACMA_Presentation/ACMA_Presentation.pdf,
accessed September 2017
 India Brand Equity Foundation, http://www.ibef.org/industry/india-
automobiles.aspx, accessed September 2017
 Make in India, http://www.makeinindia.com/sector/automobile-components,
accessed September 2017
 Society of Indian Automobile Manufacturers,
http://www.siamindia.com/statistics.aspx?mpgid=8&pgidtrail=9, accessed
September 2017
48
ANNEXURE
Industry Balance Sheet
Particulars 2017 2016 2015

No Of Companies 9 9 9
SOURCES OF FUNDS
Share Capital 3,520.017 3,180.017 2,616.017
Share warrants & Outstanding 3.900 1.290 0.670
Total Reserve 26,993.457 21,752.839 17,092.267

Shareholder's Funds 30,517.374 24,934.146 19,708.953
Secured Loans 369.558 382.649 350.450
Unsecured Loans 1,767.311 1,694.702 1,867.604
Total Debts 2,136.869 2,077.351 2,218.054
Total Liabilities 32,654.243 27,011.497 21,927.008
APPLICATION OF FUNDS :
Fixed Assets 20,916.839 19,196.362 17,059.784
Less: Accumulated Depreciation 11,453.420 10,731.962 9,724.112
Less: Impairment of Assets 0.180 25.779 0.180

Net Block 9,463.239 8,438.622 7,335.492
Lease Adjustment A/c 0.000 0.000 0.000
Capital Work in Progress 602.283 757.353 1,148.372
Pre-operative Expenses pending 0.000 0.000 1.370
Assets in transit 0.000 0.000 0.000

Investments 25,243.116 19,210.820 15,827.668
Current Assets, Loans & Advances
Inventories 2,620.430 2,513.553 2,883.214

Sundry Debtors 3,552.264 2,924.901 2,865.634
Cash and Bank 756.536 1,193.799 952.649
Other Current Assets 1,903.260 1,605.860 2,288.550
Loans and Advances 701.142 966.848 929.696
Total Current Assets 9,533.632 9,204.961 9,919.743
Less : Current Liabilities and

Provisions
Current Liabilities 11,022.062 9,697.246 9,212.308
Provisions 271.821 294.002 2,821.047
49
Total Current Liabilities 11,293.883 9,991.248 12,033.354
Net Current Assets -1,760.251 -786.287 -2,113.611
Miscellaneous Expenses not written
0.000 0.000 0.000
off
Deferred Tax Assets / Liabilities -894.145 -609.012 -272.284
Total Assets 32,654.243 27,011.497 21,927.008

Contingent Liabilities 2,291.149 2,103.785 2,148.470
50
Income Statement

No Of Companies 9 9 9
Gross Sales 71,712.916 71,745.359 67,609.903
Less :Inter divisional transfers 0.000 0.000 0.000
Less: Sales Returns 0.000 0.000 0.000

Less: Excise 5,168.859 4,989.025 3,694.263
Net Sales 66,544.057 66,756.333 63,915.641
EXPENDITURE :
Increase/Decrease in Stock 122.456 117.120 -214.338
Raw Materials Consumed 45,506.658 45,669.302 45,756.399

Power & Fuel Cost 335.070 382.239 428.055
Employee Cost 3,510.269 3,217.376 2,986.153
Other Manufacturing Expenses 1,098.021 1,271.557 1,395.394
General and Administration Expenses 1,033.341 1,355.993 1,719.142
Selling and Distribution Expenses 2,840.284 2,807.279 2,044.266
Miscellaneous Expenses 2,137.714 1,953.860 1,717.585

Less: Pre-operative Expenses
22.303 17.109 60.221
Capitalised
Total Expenditure 56,561.511 56,757.616 55,772.435
Operating Profit (Excl OI) 9,982.546 9,998.717 8,143.205
Other Income 1,952.384 1,628.304 1,230.733
Operating Profit 11,934.930 11,627.021 9,373.938
Interest 114.227 144.919 149.224
PBDT 11,820.703 11,482.102 9,224.714
Depreciation 1,250.177 1,177.029 1,143.302
Profit Before Taxation & Exceptional
10,570.526 10,305.073 8,081.411
Items
Exceptional Income / Expenses 0.000 0.000 -493.685
Profit Before Tax 10,570.526 10,305.073 7,587.727

Provision for Tax 3,048.041 3,131.510 2,399.616
Profits After Tax 7,522.485 7,173.563 5,188.111
Adj to Profit After Tax 0.623 0.000 -1.711
Profit Balance B/F 14,217.331 13,143.984 8,837.668
Appropriations 21,740.438 20,317.547 14,024.068
Equity Dividend % 5,135.000 4,735.000 4,070.000
Earnings Per Share 386.632 369.646 275.125
Book Value 1,389.180 1,116.293 872.864
51
Cash Flow Statement

Cash Flow after changes in
Working Capital 11,200.46 11,343.92 6,855.82
Cash From Operating Activities 8,248.36 8,174.59 4,353.00
Cash Flow from Investing Activities -6,380.13 -2,954.88 -1,249.33
Cash from Financing Activities -2,369.40 -5,022.81 -3,103.32

Net Cash Inflow / Outflow -501.17 196.896 0.352
Opening Cash & Cash Equivalents 840.784 655.282 815.893

Cash & Cash Equivalent on
Amalgamation / Take over / Merger 0 0 0
Cash & Cash Equivalent of
Subsidiaries under liquidations 0 0 0
Translation adjustment on reserves /

op cash balances frgn subsidiaries 0 0 0
Effect of Foreign Exchange
Fluctuations 1.556 -11.394 0.007
Closing Cash & Cash Equivalent 341.17 840.784 816.253
52
Maruti Suzuki
Balance Sheet
Currency Rate 1.00 1.00 1.00

EQUITY AND LIABILITIES NA NA NA
Share Capital 1510.00 1510.00 1510.00
Share Warrants & Outstanding 0.00 0.00 0.00
Total Reserves 416063.00 362801.00 297332.00

Shareholder's Funds 417573.00 364311.00 298842.00
Long-Term Borrowings NA NA NA
Secured Loans NA NA NA
Unsecured Loans NA NA NA
Deferred Tax Assets / Liabilities 5589.00 4662.00 1943.00
Other Long Term Liabilities 15853.00 11050.00 8075.00
Long Term Trade Payables NA NA NA
Long Term Provisions 265.00 219.00 148.00
Total Non-Current Liabilities 21707.00 15931.00 10166.00
Current Liabilities NA NA NA
Trade Payables 104970.00 83673.00 74073.00
Other Current Liabilities 34202.00 31278.00 23600.00
Short Term Borrowings 1108.00 4836.00 774.00
Short Term Provisions 14141.00 12477.00 11945.00
Total Current Liabilities 154421.00 132264.00 110392.00
Total Liabilities 593701.00 512506.00 419400.00
ASSETS NA NA NA
Non-Current Assets NA NA NA
Gross Block 214239.00 186595.00 153218.00
Less: Accumulated Depreciation 80649.00 53668.00 28118.00
Less: Impairment of Assets NA NA NA
Net Block 133590.00 132927.00 125100.00

Lease Adjustment A/c NA NA NA
Capital Work in Progress 21259.00 12523.00 10069.00
Intangible assets under development NA NA NA
Pre-operative Expenses pending NA NA NA
Assets in transit NA NA NA
53
Non-Current Investments 340729.00 263022.00 188754.00
Long Term Loans & Advances 6899.00 4284.00 5349.00
Other Non-Current Assets 12010.00 11988.00 11668.00
Total Non-Current Assets 514487.00 424744.00 340940.00
Current Assets Loans & Advances NA NA NA
Currents Investments 12173.00 21788.00 10568.00

Inventories 31608.00 32622.00 31321.00
Sundry Debtors 14618.00 11992.00 13222.00
Cash and Bank 711.00 138.00 391.00
Other Current Assets 1791.00 1757.00 2349.00
Short Term Loans and Advances 18313.00 19465.00 20609.00
Total Current Assets 79214.00 87762.00 78460.00
Net Current Assets (Including Current

-75207.00 -44502.00 -31932.00
Investments)
Total Current Assets Excluding

67041.00 65974.00 67892.00
Current Investments

NA NA NA
off
Total Assets 593701.00 512506.00 419400.00
Contingent Liabilities 96838.00 98555.00 85138.00
Total Debt 1108.00 4836.00 2309.00
Book Value 1382.69 1206.33 989.54
Adjusted Book Value 1382.69 1206.33 989.54
54
Income Statement
Gross Sales 81,994.400 77,266.200 65,054.600
Profit on sale of assets/investments 0.00 0.00 0.00
Manufacturing Sales 73,630.000 70,008.300 58,742.200

Trading Sales 7,205.100 6,515.500 5,571.900
Services Sales 1,159.300 742.400 740.500

Less: Excise 2,231.700 9,231.400 7,516.500
Net Sales 79,762.700 68,034.800 57,538.100
EXPENDITURE :
Increase/Decrease in Stock 40.700 -380.100 6.900

Power & Fuel Cost 671.900 517.200 692.600
Employee Cost 2,833.800 2,331.000 1,978.800
General and Administration Expenses 386.200 291.600 222.298
Audit Work 1.600 1.800 1.430

Taxation work 0.800 0.500 0.00
Certification Work 0.400 0.300 0.228
Reimbursement of Expenses 0.100 0.100 0.040
Other Audit Exp 0.00 0.00 0.00
Miscellaneous Expenses 2,005.600 1,611.200 1,574.402

Loss on buy-back of
0.00 0.00 0.00
shares/debentures
0.00 0.00 0.00
Capitalised
Other Income 2,144.600 2,403.700 1,521.200
Claim Received 0.00 0.00 0.00
Sale of Power 0.00 0.00 0.00
Other 99.100 103.600 60.200
55
Interest 345.700 89.400 81.500
Interest on Working Capital Loans 0.00 0.00 0.00
Bank Charges etc 0.00 0.100 0.300

Others 254.800 0.00 0.00
Interest Capitalised 0.00 0.00 0.00
PBDT 13,761.300 12,562.400 10,263.900
Depreciation 2,757.900 2,602.100 2,820.200
11,003.400 9,960.300 7,443.700
Items
Exceptional Income / Expenses 0.00 0.00 0.00

Provision for Tax 3,281.600 2,610.100 2,079.400
MAT credit entitlement 0.00 0.00 0.00
Profits After Tax 7,721.800 7,350.200 5,364.300
Extra items 0.00 0.00 0.00
Adj to Profit After Tax 0.00 0.00 0.00
Profit Balance B/F 31,318.900 25,003.700 21,011.600
Appropriations 39,040.700 32,353.900 26,375.900
Equity Dividend % 1,600.000 1,500.000 700.000
Earnings Per Share 255.689 243.384 177.626
Adjusted EPS 255.689 243.384 177.626
56
Cash Flow Statement

Adjustment 1,030.80 446.4 1,487.60
Changes In working Capital 2,805.80 2,194.00 1,463.10

Decrease / (Increase) in LT loans &
Advances 0 0 0
(Increase) / Decrease in Other non-
current Assets -10.7 -32.6 70
Increase / (Decrease) in Other non-
current Liabilities 480.3 297.5 182.9
Increase / (Decrease) in LT
Provisions 4.6 7.1 -5.5
Working Capital 14,840.00 12,600.70 10,394.40
Cash Flow from Investing Activities -8,282.10 -9,177.90 -7,227.40
Cash from Financing Activities -3,446.00 -1,129.30 -1,236.40

Net Cash Inflow / Outflow 56.9 -27.9 20.7
Opening Cash & Cash Equivalents 13 38.4 17.7

Amalgamation / Take over / Merger 0 2.5 0

Subsidiaries under liquidations 0 0 0

op cash balances frgn subsidiaries 0 0 0
Fluctuations 0 0 0
Closing Cash & Cash Equivalent 69.9 13 38.4
57
Ratio Analysis
Operational & Financial Ratios
Earnings Per Share (Rs) 255.689 243.384 177.626
CEPS(Rs) 347.010 329.546 271.010

Adjusted EPS (Rs.) 255.689 243.384 177.626
Book NAV/Share(Rs) 1382.692 1206.328 989.543
Adjusted Book Value (Rs) 1382.692 1206.328 989.543
Tax Rate (%) 29.824 26.205 27.935
Dividend Pay Out Ratio (%) 31.288 30.815 19.704
Margin Ratios
Core EBITDA Margin (%) 14.589 13.263 13.564
EBIT Margin (%) 13.841 13.007 11.568
Cash Profit Margin (%) 12.781 12.881 12.581
Performance Ratios
ROA (%) 13.961 15.775 12.695
ROE (%) 19.752 22.167 20.020
ROCE (%) 28.811 29.986 27.699
Asset Turnover(x) 1.482 1.658 1.540
Inventory Turnover(x) 25.531 24.167 22.363
Debtors Turnover(x) 61.627 61.288 54.393
Sales/Fixed Asset(x) 4.091 4.548 3.114
Working Capital/Sales(x) 0.000 0.000 0.000
Efficiency Ratios
Fixed Capital/Sales(x) 0.244 0.220 0.321
Receivable days 5.923 5.955 6.710
Inventory Days 14.296 15.103 16.321
Payable days 50.540 48.885 47.091
Growth Ratio
Net Sales Growth (%) 17.238 18.243 15.144
Core EBITDA Growth (%) 11.502 22.294 37.125
EBIT Growth (%) 12.930 33.547 48.303
PAT Growth (%) 5.056 37.021 44.544
EPS Growth (%) 5.056 37.021 44.544
Financial Stability Ratios
Total Debt/Equity(x) 0.003 0.013 0.008
Current Ratio(x) 0.513 0.664 0.711
Quick Ratio(x) 0.309 0.420 0.429
Interest cover(x) 32.829 112.413 92.334
58
Tata Motors
Balance sheet
EQUITY AND LIABILITIES NA NA NA
Share Capital 6792.20 6792.20 6791.80
Share Warrants & Outstanding 0.00 0.00 0.00
Total Reserves 194917.60 204833.90 225829.30
Shareholder's Funds 201709.80 211626.10 232621.10
Long-Term Borrowings NA NA NA
Secured Loans 9902.50 14611.70 12137.70
Unsecured Loans 121656.60 122249.20 93861.90
Deferred Tax Assets / Liabilities 1546.10 1475.80 713.90
Other Long Term Liabilities 5023.70 14514.70 32899.10
Long Term Trade Payables NA NA NA
Long Term Provisions 10094.80 8921.80 7508.90

Total Non-Current Liabilities 148223.70 161773.20 147121.50
Current Liabilities NA NA NA
Trade Payables 142256.30 114622.40 90284.50
Other Current Liabilities 60087.60 43567.40 54890.30
Short Term Borrowings 30998.70 51585.20 36547.20
Short Term Provisions 8846.90 5608.50 5295.40
Total Current Liabilities 242189.50 215383.50 187017.40
Total Liabilities 592123.00 588782.80 566760.00
ASSETS NA NA NA
Non-Current Assets NA NA NA
Gross Block 431657.10 398859.60 393054.20
Less: Accumulated Depreciation 215619.60 191130.40 182296.10
Less: Impairment of Assets NA NA NA

Net Block 216037.50 207729.20 210758.10
Lease Adjustment A/c NA NA NA
59
Capital Work in Progress 13714.50 19026.10 15579.50
Intangible assets under development 38251.50 53683.80 41285.80
Pre-operative Expenses pending NA NA NA
Assets in transit NA NA NA
Non-Current Investments 142607.90 148583.90 152174.80
Long Term Loans & Advances 11252.50 17251.40 15060.30
Other Non-Current Assets 20542.50 14937.60 13284.60

Total Non-Current Assets 442406.40 461212.00 448143.10
Current Assets Loans & Advances NA NA NA
Currents Investments 25027.80 24374.20 17458.40

Inventories 56701.30 55530.10 51179.20
Sundry Debtors 34798.10 21280.00 20455.80
Cash and Bank 7954.20 3266.10 7884.20
Other Current Assets 20747.20 16838.60 15149.40
Short Term Loans and Advances 4488.00 6281.80 6489.90
Total Current Assets 149716.60 127570.80 118616.90
Net Current Assets (Including Current

-92472.90 -87812.70 -68400.50
Investments)
Total Current Assets Excluding

124688.80 103196.60 101158.50
Current Investments

NA NA NA
off
Total Assets 592123.00 588782.80 566760.00
Contingent Liabilities 48841.70 44995.80 50431.20
Total Debt 184638.40 193569.80 164733.40
Book Value 59.40 62.32 68.51
Adjusted Book Value 59.40 62.32 68.51
60
Income Statement
Gross Sales 59,624.690 49,054.490 47,383.610
Profit on sale of assets/investments 0.00 0.00 0.00
Manufacturing Sales 57,868.040 47,709.390 46,527.840

Trading Sales 0.00 0.00 0.00
Services Sales 1,756.650 1,345.100 855.770

Less: Excise 793.280 4,738.150 4,538.140
Net Sales 58,831.410 44,316.340 42,845.470
EXPENDITURE :
Increase/Decrease in Stock 842.050 -252.140 10.050
Power & Fuel Cost 545.120 483.480 430.770
Employee Cost 3,966.730 3,764.350 3,188.970
General and Administration Expenses 1,878.050 2,099.130 2,127.280
Audit Work 11.060 11.750 11.860

Taxation work 1.340 0.830 0.930
Certification Work 0.00 0.00 0.00
Reimbursement of Expenses 0.860 0.880 0.630
Other Audit Exp 4.470 1.510 0.910
Miscellaneous Expenses 903.420 276.450 361.700
Loss on buy-back of shares/debentures 0.00 0.00 0.00

0.00 0.00 0.00
Capitalised
Other Income 1,557.600 1,235.120 1,402.310
Claim Received 0.00 0.00 0.00
Sale of Power 0.00 0.00 0.00
Other 0.00 0.00 0.00
61
Interest 1,744.430 1,569.010 1,592.000
Interest on Working Capital Loans 0.00 0.00 0.00
Bank Charges etc 483.950 370.330 372.870

Others 1,656.590 1,649.680 1,648.820
Interest Capitalised 396.110 451.000 429.690
PBDT 3,121.630 1,022.560 2,533.960
Depreciation 3,101.890 3,037.120 2,329.220
19.740 -2,014.560 204.740
Items
Exceptional Income / Expenses -966.660 -338.710 -271.840
Profit Before Tax -946.920 -2,353.270 -67.100

Provision for Tax 87.930 76.330 -4.800
MAT credit entitlement 0.00 0.00 0.00
Profits After Tax -1,034.850 -2,429.600 -62.300
Extra items 0.00 0.00 0.00
Adj to Profit After Tax 0.00 0.00 0.00
Profit Balance B/F 531.020 3,072.290 1,734.630
Appropriations -503.830 642.690 1,672.330
Equity Dividend % 0.00 0.00 10.000
Earnings Per Share -3.047 -7.155 -0.183
Adjusted EPS -3.047 -7.155 -0.184
62
Cash Flow Statement

Profit Before Tax -1,034.85 -2,429.60 -62.3
Adjustment 5,125.70 4,091.24 3,564.72
Changes In working Capital 51.5 -93.09 -775.94

Decrease / (Increase) in LT loans &
0 0 0
Advances
(Increase) / Decrease in Other non-
0 0 0
current Assets
Increase / (Decrease) in Other non-
0 0 0
current Liabilities
Increase / (Decrease) in LT
0 0 0
Provisions
4,142.35 1,568.55 2,726.48
Working Capital
Cash Flow from Investing Activities -710.27 -2,859.00 -3,264.22
Cash from Financing Activities -3,105.63 1,208.80 -78.87

Net Cash Inflow / Outflow 318.04 -196.75 -640.11
Opening Cash & Cash Equivalents 228.94 427.07 1,066.47

0 0 0
Amalgamation / Take over / Merger

0 0 0
Subsidiaries under liquidations

0 0 0
op cash balances frgn subsidiaries

-0.16 -1.38 0.71
Fluctuations
Closing Cash & Cash Equivalent 546.82 228.94 427.07
63
Ratio Analysis

Operational & Financial Ratios
Earnings Per Share (Rs) 0.000 0.000 0.000
CEPS(Rs) 6.087 1.789 6.676
Adjusted EPS (Rs.) 0.000 0.000 0.000
DPS(Rs) 0.000 0.000 0.200
Adjusted DPS(Rs) 0.000 0.000 0.200
Book NAV/Share(Rs) 59.399 62.319 68.505
Adjusted Book Value (Rs) 59.399 62.319 68.506
Tax Rate (%) 0.000 0.000 7.154
Dividend Pay Out Ratio (%) 0.000 0.000 0.000
Margin Ratios
Core EBITDA Margin (%) 5.549 2.765 5.748
EBIT Margin (%) 1.338 0.000 3.218
Pre Tax Margin (%) 0.000 0.000 0.000
PAT Margin (%) 0.000 0.000 0.000
Cash Profit Margin (%) 3.467 1.238 4.784
Performance Ratios
ROA (%) 0.000 0.000 0.000
ROE (%) 0.000 0.000 0.000
ROCE (%) 2.015 0.000 4.028
Asset Turnover(x) 1.010 0.849 0.889
Inventory Turnover(x) 10.625 9.194 9.553
Debtors Turnover(x) 21.265 23.507 29.989
Sales/Fixed Asset(x) 1.436 1.239 1.333
Working Capital/Sales(x) 0.000 0.000 0.000
Efficiency Ratios
Fixed Capital/Sales(x) 0.696 0.807 0.750
64
Receivable days 17.164 15.527 12.171
Inventory Days 34.352 39.700 38.207
Payable days 54.690 51.242 44.362
Growth Ratio
Net Sales Growth (%) 32.753 3.433 18.026
Core EBITDA Growth (%) 87.765 0.000 540.747
EBIT Growth (%) 201.689 0.000 164.531
PAT Growth (%) 57.407 0.000 98.685

EPS Growth (%) 57.406 0.000 98.754
Financial Stability Ratios
Total Debt/Equity(x) 0.915 0.915 0.708
Current Ratio(x) 0.618 0.592 0.634
Quick Ratio(x) 0.384 0.334 0.361
Interest Cover(x) 0.457 0.000 0.958
65

A Project Report On An Overview of Automobile Industry in India

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A

An Overview of Automobile Industry in India

Financial Analysis of Automobile Company

In partial fulfillment of the requirements of

Master of Management Studies

Rizvi Institute of Management Studies & Research

Under the guidance of

Prof. Umar Farooq

Saifali Aslam Mirdhe

Batch: 2017 – 2019.

Place: Mumbai Signature of Student

Date: Saifali Mirdhe

Absence of a long-term industry roadmap: Currently, the industry needs a long-term

Potential for improvement in technology access and R&D expertise: Technological

Shortage of skilled manpower: The automotive industry in India is in continuous need

An Overview of Automobile Industry in India

Financial Analysis of Automobile Company

Under the guidance of Prof. Umar Farooq in partial fulfillment of the

Prof. Umar Farooq

Prof. Umar Farooq Dr. Kalim Khan

Academic Coordinator Director

FIANANCIAL ANALYSIS OF AUTOMOBILE COMPANY

KEY DEVELOPMENTS .........................................................................24

PLANS AND PROGRAMMES ...............................................................26

KEY POLICIES ........................................................................................32

FINANCIAL ANALYSIS ........................................................................36

Two-wheelers Passenger Commercial Three-wheelers

Mopeds and Light

Scooters Medium & heavy

Category 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13

Category 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13

Grand Total 40,40,172 34,79,169 36,43,494 35,73,346 31,10,584 28,98,907

Performance of the industry

Performance of the industry

Three wheelers sales grew by 7.89% in April-December 2017 to 438,227 units as

However, exports of three wheelers advanced by 30.27% in April-December 2017 to

According to Mayank Pareek, president, Passenger Vehicles Business Unit, Tata

Commenting on the sales performance, N Raja, deputy managing director, Toyota

Two-wheelers which comprise of mopeds, scooters, motorcycles and electric two-

Three Wheelers that are passenger carriers and goods carrier

Commercial Vehicles that are light and medium-heavy vehicle

Total passenger vehicles (PV) sales:

Mopeds 69,773 78,413 12.4 890,518 859,520 -3.5

Sub Total 1,471,636 1,741,649 18.3 17,589,738 20,192,672 14.8

Commercial vehicles (CV) sales:

The growth in commercial vehicle sales was facilitated by infrastructure growth,

Light Commercial Vehicle (LCV):

The LCV segment performed strongly, witnessing a 31.3% growth driven by

M&HCV 39,353 45,760 16.3 302,567 340,313 12.4

LCV 47,905 62,921 31.3 411,515 516,140 25.4

Domestic Market Share for 2017-18

New financing option

 Government of India is focused on aggressive up gradation of standards to

National Automotive Testing and R&D Infrastructure Project (NATRiP)

Smart Cities Programme

The Automotive Mission Plan 2016-26 (AMP 2026)

Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India

New Green Urban Transport Scheme (GUTS),

The landscape of regulatory policies in automotive sector in India is highly dynamic

Tightening of Emission Norms and Leapfrogging to BS-VI Norms

100% electric vehicles in Public and 40% in Private Sector by 2030

Fuel Efficiency Norms

Roll out a comprehensive long-term roadmap for the automotive industry