Company Car Market in India 2009: Market Size and Competitive Landscape

Overview 1
Catalyst 1
Executive Summary 2
Table of Contents 3
Table of figures 3
Table of tables 4
1. The Indian Company Car Market: An overview 5
1.1 Market Genesis 5
1.2 Market Size 8
2. Factors Influencing the Company Car Market in India 13
2.1 Factors Driving the Company Car Market in India 13
2.1.1 High and Sustained Economic Growth 13
2.1.2 Company Cars as an Aid to Curb Attrition 14
2.1.3 Company Cars are seen as a Status Symbol 15
2.1.4 Corporate Focus on Health, Safety and Environment 16
2.1.5 Demand Migration from Two-wheelers to Cars 16
2.2 Factors Driving the Operational Leasing Market in India 17
2.2.1 Tax Benefits to Employees 17
2.2.2 General Trend towards Outsourcing of Non-Core Activities 18
2.2.3 Leasing Companies Offer Good Residual Values 18
2.2.4 Corporate Mindset is changing from Ownership to Leasing 18
2.2.5 Economic Growth 18
2.2.6 Anticipated or Forthcoming Changes in Tax Legislation 18
2.2.7 Favourable Interest Rates 18
2.3 Market Deterrents 19
2.3.1 Low Residual Values Owing to an Unorganized Used Car Market 19
2.3.2 Quality and Reliability of Service Providers 20
2.3.3 Economic Uncertainty 21
2.3.4 Registration Taxes 22
2.3.5 Poor Road Infrastructure 22
2.3.6 Accounting Treatment of Operational Leasing vs. Other Financing Methods 22
3. Competitive Landscape: Industry Analysis 23
3.1 Market Competition 23
3.1.1 Competition at the Strategic Level 23
3.1.2 Competition Intensity at Various Levels of Indian Company Car Ecosystem 25
Competition at Generic Level 25
Competition at Form Level 26
Competition at Industry Level 26
Competition at Brand Level 26
3.2 Porter's Five Forces Analysis 27
3.2.1 Bargaining Power of Suppliers 28
3.2.2 Bargaining Power of Buyers 29
3.2.3 Threat of New Entrants 30
3.2.4 Threat of Substitutes 31
3.2.5 Industry Rivalry 32
4. Future Outlook 33
4.1 Impact of Global Credit Crunch on India's Car Leasing Market 35
4.2 Operational Leasing to Benefit from Positive Indian Employment Outlook 36
4.3 Developing Used Car Market to Fuel Growth in Car Leasing 37
4.4 Car Leasing to Grow in Tandem with the Automobile Market in India 38
5. What Needs To Be Done 40
5.1 Educate the Customer 40
5.2 Forge Alliances for Remarketing of Vehicles 41
5.3 Invest in and Integrate Aftermarket Channels 41
5.4 Focus on a Customer Segment 41
6. Conclusion 43
APPENDIX 45
Definitions 45
Fleet Sales 45
Company Cars 45
Operational Leasing 45
Finance Leasing 45
Further reading 45
Ask the analyst 46
Datamonitor consulting 46
Disclaimer 46
List of Tables
Table 1: Major Car Leasing Companies in India and their approximate Fleet Sizes (2007) 7
Table 2: Used Car Market in India - Major Players (VM Initiated) 20
Table 3: Recent Car Launches in India - January 2009 to July 2009 23
Table 4: Awaited Car Launches in India 38
List of Figures
Figure 1: Market Share of Leasing Companies in Operational Leasing Market in India (2007); Total Estimated Fleet: 21,500 8
Figure 2: Penetration of Company Car Parc in Total Car Parc in India vs. Europe and Russia (2008) 9
Figure 3: Penetration of Company Car Sales in Total Passenger Car Sales in India vs. Europe and Russia (2008) 10
Figure 4: Penetration of Operational Leasing in Company Car Parc - India vs Europe and Russia (2008) 11
Figure 5: Penetration of Company Cars in Number of Employees in India vs. Western Europe vs. Russia (2008) 12
Figure 6: Factors helping the growth of Company Car Market in India 13
Figure 7: Distribution of Contracts of Company Cars in Various Sectors in India (2008) 14
Figure 8: Attrition Rates in India across different Industry Sectors (2007) 15
Figure 9: Factors helping the growth Operational Leasing Market in India 17
Figure 10: Factors acting as deterrents to the Operational Leasing Market in India 19
Figure 11: Satisfaction Level with the Quality of Service Received from Service Providers 21
Figure 12: Entry Modes Opted by Various Leasing Companies in India 24
Figure 13: Competition Intensity at Various Levels of Indian Company Car Ecosystem 25
Figure 14: Competitive Positioning of Leasing Companies w.r.t their Market Presence (2007) 27
Figure 15: Bargaining Power of Suppliers 28
Figure 16: Bargaining Power of Buyers 29
Figure 17: Threat of New Entrants 30
Figure 18: Threat of Substitutes 31
Figure 19: Industry Rivalry 32
Figure 20: Evolution of Company Car Market in India 33
Figure 21: Current State of Operational Leasing in India 34
Figure 22: Employment Scenario in India by Economic Sector 36
Figure 23: Four Pronged Approach for Operational Leasing Companies in India 40
Figure 24: Popular Car Segments amongst Indian Employees 42
Figure 25: Growth of Company Car Market in India 43