ValueNotes Connect
Welcome to the April issue of ValueNotes Connect.

Driven by strong GDP growth, a growing middle class and a lack of public transport, the Indian market is one of the sweet spots in the global automobile sector. The Indian government recently articulated The Automotive Mission Plan 2026 (AMP 2026), which aims to make the Indian automotive industry the engine for growth of the ‘Make in India’ programme. To quote from their vision statement – “By 2026, the Indian automotive industry will be among the top three of the world in engineering, manufacture and export of vehicles and auto components… growing in value to over 12% of India’s GDP, and generating an additional 65 million jobs”.

This assumes annual industry growth of between 12% and 13.5% (optimistic) till 2026. While the targets are ambitious, they’re not far from estimates rolled out by industry associations, analysts and auto OEMs. Though we (ValueNotes) are a tad more cautious, double-digit average growth (including exports) is very likely – especially given that we’re coming off a down-cycle.

But the road ahead will not be all rosy. Several regulatory changes around environment and safety will mean substantial additional Capex from both ancillaries and OEMs, even as competition becomes more intense. Already diesel vehicles are feeling the heat, both from a narrowing price differential between petrol and diesel, as well as recent Supreme Court rulings. New safety norms will become mandatory in India in October 2017 resulting in a price increase across car segments. Manufacturers of ABS, airbags and other safety accessories will benefit, no doubt – but this may impact near term demand in FY18.

Do read about how we helped an auto component manufacturer redesign their product strategy through a user perception study.

As always, we hope you enjoy reading our newsletter, and we look forward to your comments.

Best regards.

Diesel OEMs and ancillaries face challenging times
by Rohan Shevate
medical-equipment Petrol cars are cheaper to manufacture than diesel cars. A diesel engine requires additional components such as turbo chargers and dedicated fuel injection systems to improve its performance and control exhaust emissions. On average, an entry-level diesel car is ~22% more expensive than its petrol version. Besides, with the price gap between petrol and diesel narrowing, diesel cars no longer make as much economic sense as before.
more>>
Car prices to rise due to upcoming 2017 safety norms
by Rohan Shevate
CarPrices Globally, safety is one of the top three parameters considered by buyers while purchasing cars. In India, we still lack stringent regulations related to the basic use of safety features in vehicles. The government is working towards covering this important aspect. New car crash standards will become mandatory from October 2017 under the Bharat New Vehicle Safety Assessment Programme (BNVSAP) where all new cars will have to undergo mandatory ratings.
more>>

Insights
  • Case study : User perception study helps auto component manufacturer redesign their product strategy
Commissioned research
Some client problems we have solved:
  • Market study on braking systems in India
  • Offshoring automotive design & engineering services to India
  • Study on oil change intervals for international car models in SE Asia
  • CI study for an automotive components manufacturer
  • Customer perception survey of EFI systems in two-wheelers in India
Insights
Do get in touch with us on email – research@valuenotes.co.in
Or leave us a message using our online form
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