minum Banking Cement Commercial Vehicle Cotton & Cotton Ya

Component Business Process Management (BPM) Construction Educat

parel Industry Chlor-Alkali CRAMS Industry
Crude Oil Gems & J
Coal Natural Gas Pesticides Power Generation
Steel Pa
Manganese Ore Shipping Sugar Tractor Refining & Marke
eight Transport Commercial Vehicle Telecom Tow
Two Wheeler Tyre Power Crude Oil Man Made Fibre
able Energy Sources Pipe Telecom-Wireless Seed Industry
an Made Fibre Paper Housing Finance Passenger Vehicl
Hospital Industry Roads & Highways Zinc & L
Hotel Shipbuilding
Aluminum Cotton & Cotton Yarn Tracto
anking Express Service
Steel Two
The Wheeler Pesticide
oads Freight Transport Gems & Jewellery
Indian Express Service Cr
eed Industry Passenger Vehicle CRAMS Industry
October
Commercial Natural Gas
2013 Vehicle Industry
The GC segment, which dominates the CV sales in domestic market, is highly sensitive to
economic scenario prevailing in the country. Healthy economic environment which GC demand has been
ensured strong growth in freight demand, coupled with stability in fuel prices and rise in
investments towards infrastructure and construction activities fuelled strong rise in GC
worst hit by
demand post economic crises of FY09. Hence, during FY10-FY12 period, GC was able to macro-economic
register a strong rise of around 25 per cent on CAGR basis. However, slowing economic headwinds
growth since the start of FY13 pulled down the demand for GCs as it observed a drop of
around 1 per cent. CARE Research foresees with no significant revival expected in the
economic activities, FY14 would continue to exert pressure on demand for both
M&HCV GC and LCV GC sub-segments.

CARE Research observed that the proportion of LCV GC sales in overall GC market in
India being a these selected countries is more than 80 per cent. High urbanization levels has led the
predominant M&HCV organized retail sector to flourish in these economies much earlier than it has been in
India, which in turn developed the concept of hub and spoke model for transportation
market; LCVs gradually and better logistics infrastructure for improving efficiency. Increasing usage of hub and
gaining ground as India spoke model also created demand for more LCV GCs per HCVs in order to effectively
is slowly but surely redistribute freight from the nodal points to different end users. Furthermore, better cost
economics in redistribution freight, greater maneuverability in cities, and regulatory
catching up with the restrictions over the entry of HCVs in cities has fuelled the growth of LCV GCs in these
global trend countries.

M&HCV GCs has been the backbone of the road freight transport industry. Although
this sub-segment constitutes around 1/3rd in volume terms, it contributes around M&HCV GC demand to
3/4th in terms of tonnage. The M&HCV industry is more cyclical in nature as compared decline in near term as
to the LCV and this cycle is mainly influenced by macroeconomic scenario. Hence, with gloomy economic
the slowdown in economic activities (viz. industrial, agriculture, construction and
environment not
mining) post second half of FY12, the demand for M&HCV GC segment started
shrinking. CARE Research foresees, even after taking into consideration the festive
expected to ease
demand, no major revival is expected in the near term and M&HCV GC domestic sales
to observe a drop.

Government initiatives to improve public transport infrastructure under JNNURM

Investments in transport coupled with rise in institutional buying (i.e. corporate and educational institutions) and
infrastructure would demand from private fleet operators fuelled the growth in bus demand during last 4-5

push the demand for years. The demand for LCV PCs has been driven by its increasing usage as stage carriers
in rural areas and emerging cities. CARE Research believes rising demand from STUs
PC segment in medium under government initiatives like JNNURM II combined with increasing usage of public
term transport vehicles by working population in medium term will fuel demand for PCs.
CARE Research foresees not much relief is expected for bus demand this fiscal citing
delay in government allocation of funds towards purchase of 10,000 new buses under
JNNURM II as announced in Union Budget of FY14.

The Indian
Commercial
Vehicle
Industry
 Table
of
Contents
Section- I CARE Research's Outlook
Outlook on Indian CV industry
Domestic
market expected to grow at a CAGR of 6-7 per cent till FY18
GC demand has been worst hit by macro-economic headwinds

Slowdown in redistribution to adversely affect LCV GC demand in FY14

M&HCV GC demand to decline in near term as gloomy economic environment not expected to ease

India being a predominant M&HCV market; LCVs gradually gaining grounds...

Growth of organized retail along with increasing urbanization levels would drive LCV demand in near to medium

term
Rising urbanization has fuelled growth in passenger mobility during last one decade

Growing popularity of road travel has enhanced the buying of buses from private fleet operators as well as State

Transport Undertakings (STUs) in last one decade
Initiatives like JNNURM provided great fillip to bus demand in last 4-5 years

Export too would remain under pressure in short term

Outlook on Profitability
Industry
top line to witness a straight second year drop in FY14
Volatile rupee
to constrain domestic OEMs from reaping the benefits of global softening in metals prices
Domestic
steel prices to remain firm on the back of sharp rupee depreciation
Similar to
steel, aluminum prices too expected to remain firm on the back of sharp rupee depreciation
Natural
rubber prices to soften, as supply constrains ease and demand pressure continues
Sluggish
demand would continue to strain on utilization levels of the industry

Section- II Industry Section

Evolution
Regulatory
Phase
Developmental
Phase
Liberalization
Phase
Modernization
Phase

Regulations
Motor Vehicle Act

Emission
Norms
Permits

Goods
Carrier Permit
National
Permit
Carriage
of Goods Act, 2007
Custom
Duty
Excise Duty

Age Norms

Foreign
Direct Investment

Domestic Market
After three consecutive years of growth, CV industry witnesses decline in FY13

Weak economic conditions led to tardy demand for GC segment

LCV GC continues to remain the mainstay.

The Indian
M&HCV GC sales plunge on low industrial and mining activity
Commercial
Vehicle
Industry
 Table
of
Contents
Investments in urban infrastructure spur the PC segment

Demand Drivers

Exports
CV exports
plunged in FY13
GC continues
to dominate the CV exports
PC exports
witness a decline in FY13
Singapore
continues to remain key export destinations for CV in FY13

Industry Segments and Competition

GC segment continue to dominate CV demand

SCVs continued to dominate LCV GC market since its introduction in FY05

Competition intensifies in the SCV segment

HCVs were worst hit in M&HCV segment due to economic slowdown and mining ban in some key mining states.

ICVs continue to gain share on the back of better operating economics

MCVs share continues to drop

Increasing application of hub and spoke concept led to rise in the demand for HCVs

Increasing need for public transport infrastructure fuelled growth in PC segment

Rise in demand from inter and intra city stage carrier operator as well as corporate have led to spurt in the

demand for LCV PC
Buying from STUs under Government initiatives to improve public transport infrastructure was the major driver

for M&HCV PC demand recently

Cost Analysis
Raw Material
Cost
Steel

Rubber

Selling and
Distribution costs
Employee
Cost

Credit Profile
Operating
Margins
Net Margins

Return on
Capital Employed
Fixed Asset Turnover
Ratio
Debt-Equity

Working
Capital Management

SECTION- III Company Section

Tata Motors Limited
Ashok Leyland Limited
Mahindra and Mahindra Limited

Section- IV Annexures
Segment
wise domestic sales and exports of the GC Industry
Player wise
GC domestic sales in sub-segment
Segment
wise domestic sales and exports of PC industry The Indian
Player wise
PC domestic sales in sub-segment Commercial
Vehicle
Industry
 Table
of
Contents
List of Tables
SECTION- I CARE Research's Outlook
Outlook on Indian Commercial Vehicle Industry
LCV GC
sub segment wise domestic sales forecast
M&HCV
GC sub segment wise domestic sales forecast

Outlook on Profitability
Key financial
indicators

SECTION- II INDUSTRY SECTION

Regulations
Trend in
emission norms

Domestic Market
Sub-segment
wise domestic sales (LCV GC)
Sub-segment
wise domestic sales (M&HCV GC)
Sub-segment
wise domestic sales (LCV PC & M&HCV PC)

Cost Analysis
Trend in
Raw materials cost as a percentage to net sales (%)
Trend in
Selling and Distribution cost as a percentage to net sales (%)
Trend in
Employee cost as a percentage to net sales (%)

Credit Profile
Trend in
operating margins (%)
Trend in
net margins (%)
Trend in
Return on Capital Employed (%)
Trend in
Debt-Equity
Key Financial
indicators

SECTION- III Company Section

Ashok Leyland Limited
Key performance
indicators
First Half
Update

Mahindra and Mahindra Limited

Key performance
indicators
First Half
Update

Tata Motors Limited

Key performance
indicators
First Half
Update

The Indian
Commercial
Vehicle
Industry
 Table
of
Contents
List of Graphs
SECTION- I CARE Research's OUTLOOK
Outlook on Indian Commercial Vehicle Industry
Outlook
on domestic CV industry
Outlook
on domestic GC segment
Country
wise HCV/LCV proportion in GC sales in CY 2012
Share of
LCV in GC sales
Outlook
on retail industry
Trend in
growth levels in IIP Consumer durables
Growth
in sector wise GDP
Estimates
of utilization levels of M&HCV GC in primary freight distribution
Passenger
mobility through roads
Trend of
road projects awarded and targets by NHAI
Outlook
on domestic PC industry
Outlook
on CV exports

Outlook on Profitability
Outlook
on Sales,Volume and Realization
Outlook
on domestic HR coil prices (Rs/tonne)
Outlook
on domestic aluminum prices (Rs/tonne)
Outlook
on domestic natural rubber prices
Trend in
capacity utilization

SECTION- II Industry Section

Evolution
Evolution
of CV industry
Industry
structure of CV industry

Regulations
Regulatory
Framework

Domestic Market
Trend in
domestic CV industry
Trend in
domestic GC industry
Trend in
domestic PC industry
Demand
Drivers

Exports
Trend in
CV exports
Trend in
GC exports
Trend in
PC exports
GC exports
Destination wise export share (Value) in FY12 & FY13

Industry Segments and Competition

Break up
of GC and PC industry in FY13
Break up
of GC industry (FY13)
The Indian
Trend in
share of different sub segments in LCV GC segment
Trend in
share of key players in less than 3.5 tonne segment Commercial
Vehicle
Industry
 Table
of
Contents
Trend in
share of different sub segments in M&HCV segment
Trend in
share of key players in ICV's segment
Trend in
share of key players in MCV's segment
Trend in
share of key players in HCV segment
Breakup
of PC industry (FY13)
Trend in
share of key players in LCV PC segment
Trend in
share of key players in M&HCV PC segment

Cost Analysis
Annual and
monthly trend in steel prices
Annual and
monthly trend in rubber prices

Credit Profile
Trend in
Fixed Asset turnover

The Indian
Commercial
Vehicle
Industry
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