ACTIA – Long term business plan

Impetus on Growth

Rammesh Aluru
 Actia’s current market in India :
◦ Market currently serviced are OEM HCV manufacturers and after Market.
◦ Current Products in India
 OEM Supply ( On board systems, Connected vehicle , DC-DC Converters, EOL Testing )
 Garage Equipment ( HCV Wheel alignment, Automotive diagnostics , A/C gas chargers. )
 Actia’s Current operations In India :
 Plant in Noida for manufacture of EOL systems for HCV and Off road Manufacturers
 Key customers: Tata Motors, Ashok Leyland, Force Motors
 People < 100, Turn over < 50 crs.
 Assumptions
 Automotive CV Market growth assumed as per SIAM projections
 For after market projections are assumed as per ACMA Projections.
 Executive Summary
EXECUTIVE Auto -OEM Market
SUMMARY

Fifth Largest  Presence of established domestic and international original equipment manufacturers (OEMs)
 7th largest manufacturer of commercial vehicles
automobile industry
 Automobile exports to grow at a CAGR of 3.05 per cent during 2016-2026.

 Automobile sector split into four segments , each having few market leaders.
Segmented Market  Two-wheelers account for 80 per cent of domestic demand.
 Commercial vehicle segment expected to grow at 11.07 per cent between 2016-26.

Positive growth  Exports grew at 4.3 per cent CAGR between FY12-17.
 Domestic sales of PV expected to increase at a CAGR of 12.87 per cent between 2017-26
prospects
 Strong policy support from government.

Sources: SIAM
Market Trend – Auto OEM

3,500,000 3,046,727
2,789,208
3,000,000 2,629,839 2,665,015 2,601,236
2,503,509
2,500,000

2,000,000 PV

1,500,000 CV
809,499 793,211 714,232
1,000,000 632,851 614,948 685,704

500,000

-
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

 CV – Market poised to Grow 11% between 2016- 2026

 PV- Market is set grow by 12.87% during the same period
 Garage equipment market is estimated at 750 crores and
growing in double digits.
India – Potential Market for Auto Electronics
 Automotive electronics market in India has growth potential due to the low penetration in the vehicles
currently sold in the country and driven by the three major requirements –regulatory norms, e-mobility
and environment issues, and connectivity

 Increasing electronic content per car: Cost of Auto Electronics content as % of total automobile cost in
India is expected to double from 23% to 45% over the period 2010-2030 as per the latest McKinsey
ACMA Report 2015.

 Increasing Premium/ Luxury cars sales in India: Higher-end car models feature more auto electronics
with larger and more complex electrical systems.

 Emerging technologies: Satellite navigation systems, remote security systems, traffic control systems
etc are some of the emerging electronic accessories in the Indian Auto electronics space.

 Huge potential in the aftermarket segment: India has close to 20 million passenger vehicles on the
road. More and more consumers are looking for electronic features in their cars.
CV telematics market in India is expected to grow at 25% p.a.,
mainly led by after market segment and entry level solutions
Telematics installed base ['000 units] Split of installed base

Type of fitment Type of solution

1,383 High
OEM
Mid end
1%
+25% 16%
tier 31%

68%
84%
Aftermarket Entry level
293
Split by industry Split by region
Other West
Tourism s Cold chain
11% 27% 13% North
3% 32%
2015 2022F Retail
East 27%
21% 26%
Pharma 28%
Courier
South
Source: Secondary research, Roland Berger
 There are ~20 players in the domestic market, top 3 account
for 60% of the total market.
CV telematics market share in India [2014] Comments
> The Indian telematics industry is highly
competitive
Others
> The competitive environment is further expected
17% Trimble to intensify with increasing product extensions,
30% more advanced offerings, technological
Mahindra
4% innovations and M&A
Ashok 5%
Leyland > Trimble is the market leader with 30% market
Telematics share. The top three players (Trimble, Arya
7% Omnitalk and CMC Technology) account for
Dhanus
Technologies ~60% of the total market share
10% 16%
e-Logistics Arya Omnitalk
> To remain competitive in the market, vendors not
only have to develop new technologies but also
CMC Technology keep abreast of global developments and
emerging technologies that could potentially
impact their product portfolio
 DC-DC Converters / Multiplexes – CV & Bus Market
 Hella India ( Leader in Market ) - SWOT: Controls > 50% of the market. Major customer –
Maruthi, Tata, Mahindra and Renault and Honda
 Nelso Technology - Mostly Imports from Parent company.
 Imports ( Leading Brands ) – Covers balance market.
 Instrumentation clusters / Dash panels / Telematics
 Pricol - SWOT - Cost competitive, Low end, two wheeler focused, Trying to establish in
Telematics Market
 Visteon- SWOT – Global player with a strong connect with Ford, Hyundai and Tata. High cost
and
 Magneti Marelli – Global Player with strong pockets in OEM supplies.
 Denso – Global Player – Follow through to Japanese OEMS
 Garage Equipments
 Manatec: Indian Manufacturer. Controls 40% market share in Wheel balancers in CV segment .
 Madhu’s garage equipments: Indian Manufacturer.
 Threat of Substitutes

 Low – As public transportation is

underdeveloped even in most cities

 Rapid growth in Indian economy is

Changing travel patterns

Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers

 High – As government has already  Low – High demand from manufacturers

 Moderate – As there are a large
deregulated the sector give them lesser bargaining power
number of key raw material
manufacturers .  Increasing number of foreign firms
are increasing their presence  Product differentiation is low
 Easy access to east Asia where
electronic components can be sourced with  Cheaper imports of components from
cost advantage China is increasing
Threat of New Entrants

Positive Impact  Moderate – Given the concentration

of industry clusters in specific
Neutral Impact
strategic centres
Negative Impact
 Foreign firms are increasing their
footprints in India
 Current product profile and customer base is Highly concentrated on few major players in
the CV Market.

 Opportunity in following areas as envisaged

 Current Product profile:
 Expand the Market to Off road vehicles and other market applications. Deepen penetration among current OEM’S

 OEM – segment : Leverage ACTIA’s Relationship with European customer who have set up base in India – Daimler, PSA
and Renault.

 After Market: Establish strong distribution network, Brand Promotion, strengthen Product portfolio and Pricing policy

 New Products:
 Bring in Actia’s global product offerings into Auto / Aerospace and Defense Sector

 Leverage the demographic opportunities India offers as a LCC to use this as a export base.
ACTIA Business Plan In crores

Year 2017 ~18 2018~19 2019~20 2020~21 Remarks

Current products growing at projected CV Market rate of 11%. Find new customers and
OEM - Current product 36 40 48 57.6 penetrate 2 more OEM's. Leverage Actia's OEM relationship in other market. Assumed 20
% growth from 2019~21
Intoriduce other global products like telematics, Driver Information systems etc. Market
OEM - New Products 0 1 25 100
size >10,000 cr. 1% - market share assumed
Capture 15% of the garage euipement market of Wheel balancers, Gas chargers etc.
Garage Equipment 4 5 25 30
Assumed 30% of 750 crores as Addressable market for Actia
Export Production
10 25 Use LCC Country advantage to export and leverage cost economics of India.
base

TOTAL 40 46 108 212.6

Investment
Capacity expansion
New products
infrastructure # No additional investment assumed Land and Machinery
Brand promotion/ 10 30 40 40 # Asset turnover of 1~1.5 assumed initially. Low from auto parts industry standard due
Dealer Dev to initial product launch and Infrastructure spend.
R& D-Concurrent # Current turinover ratio is not assumed.
engineering
TOTAL 10 30 40 40
Thank you