TRACTION Automotive Tyre Manufacturers’ Association Vol.-IX , Issue-2, Mar-Apr 2019 A Newsletter of Editorial Rajiv Budhraja Director General Inside This Issue l Industry Trends mTyre (Pg…2) mAuto (Pg…3) mNatural Rubber (Pg…4) mNR Global (Pg…5) l Country Focus (Pg…6-8) l Focus (Pg…9-11) l Events (Pg…12-13) l India Stats (Pg…14-15) l Quotable Quotes (Pg…16-17) l China Column (Pg... 18-20) l Globe Watch (Pg... 21) l Stat-o-Sphere (Pg…22-23) fter a grueling elections A exercise spanning more than a month, a full majority stable Government is again poised to take centre stage in India, the largest democracy in the world. Amidst celebrations, the new Government has its task cutout on the economic front. It is no-brainer that Indian economy is slowing down. In the third quarter, the economy grew at a six quarter low of 6.6%. While we will need to wait till May 31 when the Government will release GDP gures for the 4th quarter, International Monetary Fund (IMF) has estimated growth in FY19 at 7.3% down from 7.5% projected earlier. World Bank has put it at 7.5% while Finance Ministry estimates have put the entire year’s growth at 7% only. India will continue to be the fastest growing major economy but the pace is slackening. The performance of Auto sector, the bellwether of Indian economy provides insights in the economy which is losing momentum. A glance at the graphical presentation on Page 3 proves the point. There are other worries too including, but not limited to, rise in food ination and crude oil prices. Food ination based on Wholesale price index (WPI) stood at over 7% in April Rural stress following weaker monsoon last year is weighing upon the economy. The demand growth for two wheelers fell below 5% in FY19 against almost 15% in the previous scal. Uncertainty over the outcome of the elections cast a shadow on investments and consumption was hit by tight nancial conditions including high interest rates and stress amongst banks. While there could be several factors for slowing economy, the new Government needs to continue with the reform agenda. India's Chief Economic Advisor has emphatically stated that the new Government should bring down the cost of land, labour and capital for Indian companies and enhance their ability to compete globally. Union Budget making process has begun in right earnest which will be presented in July. All eyes will be on the Budget and the direction that it provides. Happy Reading!! Page 13 IOCL Drivers Training on Tyre Safety
Transcript
TRACTION
Automotive Tyre Manufacturers’ Association
Vol.-IX , Issue-2, Mar-Apr 2019
A Newsletter of
Editorial
Rajiv BudhrajaDirector General
Inside This Issue
l Industry Trends
mTyre (Pg…2)
mAuto (Pg…3)
mNatural Rubber (Pg…4)
mNR Global (Pg…5)
l Country Focus (Pg…6-8)
l Focus (Pg…9-11)
l Events (Pg…12-13)
l India Stats (Pg…14-15)
l Quotable Quotes (Pg…16-17)
l China Column (Pg... 18-20)
l Globe Watch (Pg... 21)
l Stat-o-Sphere (Pg…22-23)
fter a grueling elections Aexercise spanning more than a month, a full majority stable
Government is again poised to take centre stage in India, the largest democracy in the world.
Amidst celebrations, the new Government has its task cutout on the economic front. It is no-brainer that Indian economy is slowing down. In the third quarter, the economy grew at a six quarter low of 6.6%. While we will need to wait till May 31 when the Government will release GDP �gures for the 4th quarter, International Monetary Fund (IMF) has estimated growth in FY19 at 7.3% down from 7.5% projected earlier. World Bank has put it at 7.5% while Finance Ministry estimates have put the entire year’s growth at 7% only. India will continue to be the fastest growing major economy but the pace is slackening.
The performance of Auto sector, the bellwether of Indian economy provides insights in the economy which is losing momentum. A glance at the graphical presentation on Page 3 proves the point.
There are other worries too including, but not limited to, rise in food in�ation and crude oil prices. Food in�ation based on Wholesale price
index (WPI) stood at over 7% in April
Rural stress following weaker monsoon last year is weighing upon the economy. The demand growth for two wheelers fell below 5% in FY19 against almost 15% in the previous �scal. Uncertainty over the outcome of the elections cast a shadow on investments and consumption was hit by tight �nancial conditions including high interest rates and stress amongst banks.
While there could be several factors for slowing economy, the new Government needs to continue with the reform agenda. India's Chief Economic Advisor has emphatically stated that the new Government should bring down the cost of land, labour and capital for Indian companies and enhance their ability to compete globally.
Union Budget making process has begun in right earnest which will be presented in July. All eyes will be on the Budget and the direction that it provides.
Happy Reading!!
Page 13
IOCL Drivers Training on Tyre Safety
1
Industry Trends - Tyre
2
Tyre Production - India
Tyre Exports - India
Truck & Bus tyre production which has been growing in double digits witnessed the growth dwindling in the �rst two months
of Q4.
Passenger Car tyre production contracted in Nov'18 and has continued to remain in the negative territory till Feb'19.
Motorcycle tyre production has weathered the slowdown and has
continued to be ahead of the previous year's curve.
Overall tyre production has remained in the positive zone, though the
growth has dwindled lately.
All Figs in Lakh Nos
FY18 FY19
Truck & Bus tyre exports shot up signi�cantly in Feb'19 having dropped in the previous month.
Continuing its declining trend, tyre exports nosedived Passenger Carin Feb'19 and stood lower by 20%.
In number terms, tyre overall exports went up marginally in the Apr-Feb FY19 Period.
Note: Figs in brackets indicate % change YoY
Apr'18-Feb'19 & YoY Comparison
163.33
190.89(17%)
2018-19
389.06
394.70(1%)
96.16
96.87(1%)
27.8626.81(-4%)
20.84
21.25(2%)
2017-18
Apr-Dec’19 & YoY Comparison
2018-192017-18
2018-192017-18
2018-192017-18
2018-192017-18
15.72
15.81(1%)
10
13
16
19
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
35.43
31.30(-12%)
20
30
40
50
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
53.88
55.56(3%)
40
50
60
70
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
144.59
145.60(1%)
120
140
160
180
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
1.51
2.01(33%)
1.0
1.5
2.0
2.5
3.0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2.54
2.02(-20%)
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
(Apr-Feb) (Apr-Feb)
(Apr-Feb) (Apr-Feb)
(Apr-Feb) (Apr-Feb)
(Apr-Feb) (Apr-Feb)
(Apr-Feb) (Apr-Feb)
Industry Trends - Auto
3
Vehicle Production - India
All Figs in Lakh Nos.
FY 18 FY 19
Note: Figs in brackets indicate % change YoY
Apr-Mar FY19 & YoY Comparison
+ Including P. CAR, MUV/SUV/VANS.
Having grown in high double digits in the �rst half, M&HCV production growth slackened in the second half of FY19 in part due to the base effect.
Passenger Vehicles growth remained in negative territory in 4 out of the last 6 months in the second half of �scal year 2018-19.
LCV production has mirrored the growth pattern in M&HCVs.
Motorcycle production, which has maintained a steady growth over previous year witnessed a sharp contraction in March'19.
Contraction in Scooter segment that began in Dec'18
deepened in Mar'19 with 38 fall in production.
Tractor segment that has grown in double digits all through the year marched in negative territory in Feb and ended the
NR Stock at the end of Mar’19 stood lower at 287000 tonnes.
Export
NR Consumption remained steady and reverted to one lakh tonne �gure in March.
Stock NR (RSS-4) Price
NR Imports stood lower than previous year in the last quarter of FY19. NR Exports continue to be modest.
Apr'18-Mar'19 & YoY Comparison
Sharp contraction of 33% in the month of March'19 deepened the de-growth in NR production to 7% in FY 2018-19.
FY18 FY19
-7%
9%
All Figs in MT
FY 18 FY 19
20000
40000
60000
80000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
0
1000
2000
3000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
200000
250000
300000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY18 FY1970000
80000
90000
100000
110000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Import
20000
30000
40000
50000
60000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
70000
45000
30000(-33%)
103000
100000(-3%)
48699
37191(-24%)
19
605(3084%)
292000
287000(-2%)
694000 642000
11122101211940
(2%)
125.57
128.02
100
120
140
160
80
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Industry Trends - NR Global
Global NR Overview (ANRPC* Countries)
5
Jan-Feb’19 & YoY Comparison
Figs in brackets '()' indicates % change (YoY).
*ANRPC - Association of Natural Rubber Producing Countries
(Member countries : Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand & Vietnam)
NR Production in ANRPC countries stood lower than previous year in the �rst two months of 2019 calendar.
India
NR Consumption YoY (INDIA vs. CHINA)
China
NR Consumption stood at the same level as previous year with two curves overlapping in the �rst two months.
NR consumption in went up marginally while the same Indiaremained unchanged in in the �rst two months.China
All Figs in ‘000 Tonnes
2018 2019
22692138
Jan-Feb'18
2176 2173
195197
834836
-6%
-0.1%
1%0.2%
1067
1051(-1%)
700
900
1100
1300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
('000 T)
2018 2019
1040
1028(-1%)
700
900
1100
1300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
('000 T)
2018 2019
Jan-Feb'19
Jan-Feb'18 Jan-Feb'19
Jan-Feb'18 Jan-Feb'18Jan-Feb'19 Jan-Feb'19
6
CountryFocus
Country Focus: Indonesia
Indonesia Automotive Industry
The investors are from:
andEurope
Asia
1.34Million Units
Production(2018)
Installed Capacity(2018)
Number of Employees
1.5 Million People
2.25Million Units/Year
Car Ratio
87Cars per
1000 people
Investment (2014-2017)
27.3 Trillion IDR
Indonesia's Automotive Industrial Areas in:
BekasiKarawang Purwakarta
$900 million
investment to enter Indonesian automotive
industry
Production of Vehicles
Car Commercial Vehicles
Domestic Sales of Vehicles
7
CountryFocus
49
7 56
2
74
5
92
5
1,0
13
82
4
96
8
98
2
1,0
56
20
6 27
6
30
8
28
2
28
5
27
4
20
9
23
4 28
8
2010 2011 2012 2013 2014 2015 2016 2017 2018
76
4
89
4
11
16
12
29
12
08
10
13
10
61
10
79
11
51
73
98 8
04
3
71
41 7
77
1
78
67
64
80
59
31
58
86 63
83
2010 2011 2012 2013 2014 2015 2016 2017 2018
Motor Vehicle Motorcycle
Country Focus: Indonesia
000’ units
000’ units
CountryFocus
8
Focus on Exports
l According to the Association of Indonesian Automotive Manufacturers, the export of completely
built units in 2018 was recorded at , a increase from the export number in 264,553 cars 14.4 %2017, while the export of completely knocked-down cars grew to 6.6% 86.6 million.
l In 2019, Indonesia targets export. 450,000 car
l Government expects that CBU can hold by the easing of automotive export procedures. While 95%
last year, Indonesian vehicles export was , which consists of CBU and 346,000 units 76% 24%completely knock down (CKD).
l Indonesian export destinations are Philippines, Saudi Arabia, Cambodia, Vietnam, and some Latin American countries.
l Indonesian government’s steps in easing automotive export procedures is expected to speed up the growth of the industry.
l By the procedure simpli�cation for completely built-up (CBU) vehicles export, the country aims to
get almost of CBU export increased this year.20%
Car Exports
3460002018
4500002019 (Target)
Outlook 2019
Posi�ves
l Strengthening private consumption, helped by government election-related spending, to help drive growth in Indonesia's new car market in 2019
l Improvements in Indonesia's key export markets
l The development of Indonesia's electric vehicle (EV) and SUV production sub-segments will accelerate as the global demand for these vehicles continue to expand.
l Automotive industry to experience stagnant growth amid high loan interest rates, and docile in�ation and stagnant purchasing power
Concerns
l Global economic uncertainty with the ongoing United States-China trade war
l Rupiah volatility, and �uctuating oil prices.
9
Focus
J.D Power 2018 India
Two-Wheeler Initial Quality Study (2WIQS) Study
Top 3 Two-Wheelers per Segment in 2019 Initial Quality Study
The 2019 India Two-Wheeler Initial Quality Study (2WIQS) is based on evaluations from 8,905 owners who purchased a new two-wheeler vehicle between March 2018 and October 2018. The study includes 85 two-wheeler models from nine makes. The study was �elded from September 2018 to December 2018 in 45 cities across India.
The study measures problems owners experienced with their new two-wheeler during the �rst two to six months of ownership. It examines 147 problem symptoms in seven categories (listed in order of frequency of reported problems): engine; brakes; �t and �nish; lights/ electricals; ride and handling; transmission; and gauges and controls.
Younger two-wheeler buyers experience more initial quality problems: Almost one-third (32%) of recent two-wheeler buyers are 25 years of age or younger. These buyers cite a higher number of problems than those in the mature age group of 31 years of age or older (132 PP100 vs. 125 PP100, respectively). The difference is largely in�uenced by problems experienced in the brake category.
Design quality improvement lags manufacturing quality: While problems related to manufacturing quality have declined by 29 PP100 between 2015 and 2019, problems related to two-wheeler design have only declined by 12 PP100 in the same period.
Overall two-wheeler quality in�uences advocacy: Owners who experience fewer problems than expected are more than two times more likely to recommend their two-wheeler model to family and friends, compared with those owners who experience more problems than expected (63% vs. 25%, respectively).
Increasing internet usage elevates instances of shopping around before �nal purchase:Internet usage as a pre-shopping tool has increased to 20% in 2019 from 16% in 2018. Cross-shopping rates among buyers who used the internet as a pre-shopping tool were more than two times higher than among those who did not (31% vs. 13%, respectively).
J.D Power 2018 India Two-Wheeler Initial Quality Study (2WIQS) Study
Deteriorating product quality can detract from customer satisfaction and con�dence in the two-wheeler model across the entire ownership period. As the industry will soon be going through a paradigm shift in technology in order to meet the BS-VI emission norms as set by the Government, OEMs can also focus on addressing concerns around sustained product quality to gain from improved word-of-mouth recommendations.”
- Rajat Agarwal, Two-Wheeler Industry Expert, J.D. Power
“
J.D Power 2018 India Two-Wheeler Initial Quality Study (2WIQS) Study
Key Findings
Manufacturing/Supplier related Quality problems higher if distance travelled is >3,500km: Manufacturing/ supplier quality-related problems are higher by 30 PP100 among owners who reported having travelled more than 3,500 kilometers as compared to owners who travelled less than 3,500 kilometers. Whereas this difference is less (13 PP100) when it comes to design-related problems. A lower PP100 score re�ects better quality performance.
Initial Quality problems higher if distance travelled is >3,500km: Instances of initial quality problems are 40% higher (an increase of 45 problems per 100 vehicles, or PP100) among owners who reported having travelled more than 3,500 kilometers on their newly purchased two-wheeler compared to owners who travelled 3,500 kilometers or less.
!!
IOCL Drivers Training on Tyre Safety
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A-ITTM AT CA
icking off the Tyre Safety calendar Kfor FY 2019-20, Automotive tyre Manufacturers Association (ATMA)
held tyre safety training for Commercial Drivers linked to Indian Oil Corporation Tikri Kalan Terminal.
Drivers and helpers (cleaners) linked to IOCL supply chain participated in the training programme.
Training was conducted in two sessions and total participation was 250 (1st session 150 and 2nd session 100).
Especially in a commercial vehicle, tyres account for signi�cant amount of cost of ownership. Vehicles getting stranded due to worn out tyres retard the competitiveness of transport sector. It is therefore very important to sensitize commercial drivers on Tyre Care & Safety.
Event
12
13
Event
Automotive TyreManufacturers’ Association
Tyre Safety Pledge Station for senior citizens 18th April 2019
Over 200 members belonging to Dignity Foundation, an NGO helping senior citizens live a life of dignity, took a pledge to spread the message of Road & Tyre Safety. Senior citizens from Delhi NCR region assembled at Bipin Chandra Pal Auditorium New Delhi showed their commitment by holding placards on tyre/ road safety and enlisting themselves as ambassadors of road and tyre safety.
“The movement for road safety needs to be escalated for perceptible drop in road mishaps so as to bring down the number of causalities. We are targetting age groups from 8 to 80 for spreading awareness on Tyre care & safety. Having started school connect program for sensitizing children on road safety , we have reached out to Dignity Foundation, urging elderly in the society to be ambassadors for tyre safety”, said Mr Rajiv Budhraja, Director General, ATMA.
“We are happy to associate with a worthy cause of Tyre care & road safety. What better mission than to spread the message of safety in the society and build a safer, happier India”, said Mr Vijay Pahwa, Gurugram Advisory Council of Dignity Foundation
India Stats
14
India Stats
India’s carbon dioxide (CO₂) emissions are growing at a faster rate than in any other major energy-consuming nation. In 2018, CO₂ emissions in the country rose 4.8% from the previous year. But despite this growth, per capita emissions in India remain low at only 40% of the global average. Even in absolute terms, the rise in India’s CO₂ emissions trails that of the US and China. Emissions from India accounted for 7% of the global CO₂ burden in 2018, compared with the US’s 14%
Solar power generation in India has increased substantially over the past few years. According to the data released by the Central Electricity Authority (CEA), solar power accounted for over 11.4 BUs of electricity produced in Q1 2019. This marks a growth of 34% year-over-year (YoY) from the 8.5 BUs generated in the Q1 2018. Even though renewable capacity additions are growing at a rapid pace, due to its lower capacity factor, the actual electricity generation tends to be much lower compared to nuclear, coal or a gas power plant.
Even with all the new solar and wind installations, renewables still barely make up 10% of the total energy generation in the country showing how far the country has to go before renewables start making a dent in the carbon emissions
CO₂ Emissions(2018 YoY% increase in CO₂ emissions)
India registers highest CO₂ emissions
Solar Electricity generation up
4.8%
3.1%
2.5%
-1.5%India USA China EU
Solar Electricity genera�on up 34% YoY in Q1, 2019
(Solar Electricity generated in Billion Units)
8.5
11.4(34%)
Q1, 2018 Q1, 2019
India Stats
15
India Stats
India's internet users are expected to register double digit growth to reach 627 million in 2019, driven by rapid internet growth in rural areas, as per market research agency Kantar IMRB. Internet usage in the country has exceeded half a billion people for �rst time, pegged at 566 million in 2018, driven by rural internet growth and usage.
While internet users grew by 7 percent in urban India, reaching 315 million users in 2018, digital adoption is now being propelled by rural India, registering a 35 percent growth in internet users over the past year.
It is now estimated that there are 251 million internet users in rural India, and this is expected to reach 290 million by the end of 2019. The share of Rural Internet users in India has increased from 39% in 2017 to an estimated 46% in 2019.
Internet Users in India to touch ~630 million in 2019
% Share of Rural internet users to increase to ~46% in 2019
(million no.)
Internet Users
185251
(35%)
290(16%)
294
315(7%)
337(7%)
2017 2018 2019(P)
Rural Urban
Rural Urban
39% 44% 46%
61% 56% 54%
2017 2018 2019(P)
480
566627
Quotable Quotes
16
Quotable Quotes
It is absolutely impossible to say that seven per cent of growth happened without any job creation or increase in employment opportunities. If one looks at our analysis, the number of schemes launched, and keeping all the other factors in mind, there has been a continuous process of job creation. Our country`s ambition should be of achieving 10 per cent growth when we will reach this level we will be able to lift up a maximum number of people above the poverty line.
The auto industry is going through tremendous changes and therefore the bonds between auto OEMs and the tyre industry become all the more important. There are new concepts such as electric vehicles, connected vehicles, shared vehicles and autonomous vehicles, all being talked about and being visible in different parts of the world. Against this backdrop it is more important for us to partner even closer, develop technologies closely and work and think together as to how we can convert these changes into strong opportunities for the entire value chain
-Amitabh Kant
-Anant Goenka
-Vikram S. Kirloskar
-Rahul Mishra
CEO, NITI Aayog
MD, Ceat (& Immediate Past Chairman, ATMA)
President, Automotive Research Association of India (ARAI),
and Vice Chairman, Toyota Kirloskar Motor
Principal, A.T. Kearney
If the economy grows mobility will increase and if mobility increases, the economy will grow. There is large headroom for growth in India. However there are three major challenges facing the auto and tyre industry – energy security of the country, environment issues and the challenge of the 'Make in India' campaign. The auto & tyre sectors need to collaborate in meeting all the three challenges.
Slowing demand and the ability to keep the cars connected, even when it is with the user, opens up options for selling, leasing or other ways of allowing customers to experience the car. E-SIM enabled connectivity also allows to remotely monitor the vehicle usage pattern and accordingly optimise �nancing and insurance expenses. With 5G technologies coming in, pushing more digital content and content monetisation will become game changers.
17
Quotable Quotes
Quotable Quotes
Entry level car buyers are very price conscious and due to narrowing fuel price gap between diesel and petrol vehicle, break even level for owning a diesel car has already increased over last two years and it will increase further post BS-VI transition. Intra-city taxi segment which traditionally runs on diesel is also gradually moving towards CNG vehicle due to lower running cost, thereby further accentuating decline in share of diesel powered small cars.
The ongoing elections has subdued the purchase sentiment during April. This, according to us, is a temporary phenomenon. We believe, following the elections the auto industry will see a revival in consumer demand. Supported by a normal monsoon, we are con�dent of seeing higher sales in FY20.
While the past few years' average growth of around 7.5 percent was impressive, the expectation is India can be better. India is expected to post real economic growth of 7.2 percent in the 2019-2020 �scal year, and is seeing below-target in�ation even as rising oil prices add an upside risk. If there is a temporary spike of oil prices and again it comes down, then obviously the impact gets moderated. Sustained increase in crude prices will de�nitely have an impact on in�ation, but we have to see how sustained it is. Our priority is to remain watchful and take coordinated action to revive growth, and maintain macroeconomic, �nancial and price stability.
-Ashish Modani
-Rajan Wadhera
-Shaktikanta Das
Vice President and Co-Head, Corporate Ratings, ICRA
Organization for Economic Cooperation and Development (OECD)
President - Automotive, M&M
RBI Governor
India has the fastest growth among G20 economies…Accommodative monetary policy and additional �scal support will boost economic growth despite subdued demand from partner countries. This contrasts with the Chinese economy, which faces the double whammy of a trade war with the US, and waning economic stimuli. There are signs of a slowdown including the weakening of private investment, in particular, real estate investment.
Across the Great Wall
China Column
China's foreign trade up 4.3% in �rst four months of 2019
18
60% of Chinese companies see Net Pro�t growth in 2018
China's foreign trade of goods climbed 4.3 percent year-on-year in the �rst four months of this year to 9.51 trillion yuan.
Exports increased by 5.7 percent year-on-year to 5.06 trillion yuan during this period, while imports went up by 2.9 percent to 4.45 trillion yuan, as per the General Administration of Customs (GAC).
Trade surplus rose by 31.8 percent to 618.17 billion yuan during this period.
April trade expanded by 6.5 percent to reach 2.51 trillion yuan. Exports grew by 3.1 percent in yuan terms last month, while imports jumped by 10.3 percent.
Trade surplus stood at 93.57 billion yuan in April, shrinking by 43.8 percent year-on-year.
General trade grew faster than processing trade during the Jan-April period, which also saw an increasing share in China's total trade volume.
Exports of mechanical and electrical products, as well as labor-intensive products such as textile and furniture, maintained growth in the �rst four months of this year.
The European Union was China's largest trading partner during this period, followed by the ASEAN, the United States and Japan.
Trade with Belt and Road countries totaled 2.73 trillion yuan, up 9.1 percent year-on-year, more than doubling the overall pace.
China's private �rms reported faster trade growth, expanding at 11 percent year-on-year to reach 3.9 trillion yuan during this period, as per GAC.
Nearly 60 percent of Chinese companies saw net pro�t growth last year, and about 11.29 percent of them achieved a more than 100 percent increase, as per the China Securities Journal.
About 1,988 companies' net pro�t attributable to shareholders of the parent company increased on a yearly basis in 2018, according to annual reports from 3,400 companies listed on the Shanghai and Shenzhen stock markets.
Around 976 companies' net pro�t growth rate surpassed 30 percent, and about 384 companies' net pro�ts increased more than 100 percent in 2018, as per statistics.
Total operating revenue of the 3,400 companies reached 43.91 trillion yuan ($6.52 trillion) in 2018, up 12.79 percent year-on-year. Net pro�t attributable to shareholders of the parent company increased 2.67 percent year-on-year to 3.45
trillion yuan in the same period.
The net pro�t increase rate of industries including construction materials, petroleum, petrochemicals, steel, iron, food, beverage and retail, increased more than 15 percent last year.
The Bank industry's net pro�t increased 5.5 percent to 1.47 trillion yuan in total volume in 2018, accounting for about 40 percent of A-share companies' total net pro�t.
China's Forein Trade, Jan - Apr 2019(trillion Yuan)
4.795.06
(5.7%)
4.324.45
(2.9%)
Jan-Apr, 2018 Jan-Apr, 2019
ExportsImports
~60% of Chinese cos. registered a YoY inc. in Net Pro�t in 2018.
(no. of companies)
YoY inc. in Net Profit
1998
59%
YoY decline in Net Profit
1402
41%
3,400 companies listed on the Shanghai and Shenzhen stock markets.
9.119.51
(4.3%)
19
China Column
Companies that doubled their net pro�t in Q1 this year were mainly in segmented industries including mechanical equipment, �ne chemicals, computers, electronics, aquaculture and brokers.
The performance of the breeding and consumption sectors will improve this year; bene�ting from 5G commercialization, the pro�tability of the electronics sector will increase and the new energy automobile industry will have more room for development, as per experts.
About 3,627 companies are currently listed on the Shanghai and Shenzhen stock exchanges, with 1,468 on the former and 2,159 on the latter, according the exchanges' official websites.
The growth of manufacturing activity in China eased in April but remained within expansion territory, adding to the con�dence that the country's economy is stabilizing.
The purchasing managers index for the country's manufacturing sector came in at 50.1 in April, slightly down from 50.5 in March, as per the National Bureau of Statistics.
A reading above 50 indicates expansion, while one below it re�ects contraction.
Factory activity continued a steady expansion in April, with the subindexes for production and for new orders standing respectively at 52.1 and 51.4. The readings are slightly lower than those in March, but they are higher than the average performance of the �rst quarter.
Market demand is driving a stable growth in production adding strong growth in emerging industries, such as high-tech and equipment manufacturing, also contributed to the steady performance.
The performance of big companies was good but some small and medium-sized companies didn't fare very well due to downward economic pressure in 2018. However, with the implementation of policies to cut taxes and fees, the overall performance of small and medium-sized companies is expected to improve in 2019”
- Yang Delong, Chief Economist, Shenzhen-based First Seafront Fund
“
China's Manufacturing remains in expansion territory
China's Manufacturing PMI
46
48
50
52
54
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
2018 2019
20% Cos. registered >100% inc. in NP, 50% >30% inc. YoY
(no. of companies)
YoY inc. in NP >30%, 976
49%
YoY inc. in NP >100%, 384
19%
YoY inc. in NP <30%, 638
32%
20
China Column
China is set to be the engine of global luxury spending, with young consumers powering the strong growth, according to a report y by global consultancy McKinsey & Company.
China delivered more than half the global growth in luxury spending from 2012 to 2018 and is expected to deliver 65 percent of the world's additional spending by 2025, according to the 2019 McKinsey China Luxury Report.
Chinese consumers are forecast to almost double their current luxury spending to 1.2 trillion yuan ($178 billion) by 2025, accounting for 40 percent of the world's spending, the report said.
It noted that young Chinese consumers are reshaping global luxury.
China has 16.9 million luxury consumers born in the 1980s and 1990s. They make up 71 percent of the country's total luxury consumers and account for 79 percent of the total luxury spending in
2018, according to the report.
The majority of these young consumers are fresh to the market, presenting both a tantalizing opportunity and an implicit imperative for brands to stay current, the report said.
Consequently, opportunity abounds as brands seek to engage the attention of consumers in the world's most lucrative and fastest-growing luxury market.
China set to be engine of global luxury spending: McKinsey report
Luxury Spending by Chinese consumers
89
178
2018 2025F
2X
Increase
(US$bn)
Quickly...
Chinese mergers, acquisitions contracted in 2018
The outbound pace of Chinese companies slowed down last year, with total value of their overseas mergers and acquisitions contracting 23 percent year-on-year to reach 738 billion yuan ($110 billion) in 2018, according to the Hurun China Cross-border M&A Report /
The report was jointly released by Shanghai-based Hurun Research Institute and the cross-border investment
specialist DealGlobe. It is the third year in a row the two have made the report.
A total of 323 overseas M&A cases were registered last year, while the number was 400 in 2017. The value of the 50 largest M&As decreased 30 percent year-on-year to 560 billion yuan, a 53 percent drop from 2016.
The largest M&A case came from China Three Gorges Corporation, which spent 180 billion yuan to acquire a 100 percent stake in the Portuguese power company Energias de Portugal.
Overeas M&A by Chinese cos
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110
0
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40
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21
Highways England starts live test to reduce CV Tyre failures
Highways England is undertaking live tests of a technology that could help reduce commercial vehicle tyre failures by 75% on UK's strategic road network (SRN). The technology is a drive over tyre pressure, tyre tread and vehicle weighing system. As drivers approach the sensors, an ANPR (automatic number plate recognition) camera reads and records the vehicle registration and a second camera photographs the vehicle.
The purpose of the equipment is to provide information to the driver or the �eet or transport manager, and not to say whether the vehicle is or is not roadworthy. Having �rst assessed a pilot installation of WheelRight's drive-over tyre management system at Keele Services (M6 southbound), Highways England is now running year-long tests of the technology at three locations in the UK.
“These three pilots put the UK at the forefront of the transport industry, setting new safety standards that other road management bodies and transport planners across the globe will be keen to adopt.” - John Catling, CEO, WheelRight
The WheelRight system comprises a set of high-intensity strobe lights, all-weather cameras and drive-over pressure instruments installed at the transport depot – all collecting data within seconds. This information is then analysed to provide actionable results instantly to the driver and/or �eet manager. Daily and weekly reports include data on:
l Tyre pressures (pass or fail based on predetermined levels)l Tread depths (pass or fail based on speci�ed levels)l Tyre temperatures (early identi�cation of problem tyres or wheels)l Tyre condition (via a 360 degree photographic image of the tread)l Weigh in Motion data / axle weights
Globe Watch
Globe Watch
Mitcham, Australia sustainably improving road conditions with end of life Tyres
A South Australian council is working on an innovative new road surface to deliver a highly sustainable solution for developing its infrastructure.
The Australian transport industry is likely to see substantial bene�ts from an increase in the use of crumbed rubber in local roads according to Tyre Stewardship Australia.
The City of Mitcham, in South Australia, is working with Tyre Stewardship Australia, an industry body devoted to tackling the tyre recycling challenge, testing recycled crumbed rubber in asphalt.
This is known to deliver more durable and safer roads and generate less noise for neighbouring communities.
To date, a stretch of 335 metres of this innovative road surface has been laid in the municipality and is currently undergoing rigorous durability and performance testing.
As part of the evaluation, a range of factors such as cracking, rutting, moisture retention and longevity will be assessed. These factors directly impact both safety as well as vehicle maintenance costs – and crucial downtime for up tempo transport operations.
Only 10 per cent of the 56 million end-of-life tyres Australians generate each year are currently recycled domestically. The successful outcome of this test, it is anticipated, will potentially increase the use of this type of road surface nationwide.
The City of Mitcham has used approximately 850 end-of-life tyres in the asphalt resurfacing of Stanlake Avenue. Almost two end-of-life passenger car tyres were used for every tonne of asphalt laid in a demonstration that presented no workability or fuming issues, despite a high ambient temperature on the day.
found that just the major automotive 10%companies are implementing AI projects to scale, with many falling short of an opportunity that
could increase operating pro�t by up to 16%
Natural gas vehicles (NGVs) are likely to account
for of sales of new three- and four-50%
wheelers in India by 2030, on the back of rapidly developing infrastructure and cost reduction due to domestic manufacturing, according to a report 'Transforming Mobility Through Natural Gas' by Nomura Research Institute Ltd. A strong
network of and 15,000 CNG 1,500 LNG
stations by 2030 would have the potential to transform the Indian mobility scenario, with an
expected natural gas vehicles as 33 million
compared to in 2019.3.3 million
Travel and tourism industry contributed a tenth of India's GDP in 2018 and accounts for
42 million jobs in the country, according to a
joint report by FICCI-Yes Bank. In India, over
Rs 16 trillion were created by this sector
alone. The same is expected to double by
2029, reaching mark.Rs 35 trillion
India was the biggest recipient of funds from Asian Development Bank in 2018 and would continue to get sovereign loans in excess of USD
3 billion in 2019 as well. The multilateral
funding institution committed in USD 3 billionsovereign loans to India in 2018, the highest level of assistance since sovereign operations began in the country in 1986.
,
Energy investment has risen most rapidly in
India in three years till 2018, up to around 12%
$85 billion, according to the International
Energy Agency (IEA) report. While global energy
investment stabilised at near in $1.85 trillion
2018 after three years of decline, the US and India were the only two countries where investment in energy recorded a growth in 2018 from 2015 levels.
Global warming has caused the Indian economy
to be smaller than it would otherwise have 31%
been, according to a Stanford study which shows how Earth's temperature changes have increased inequalities.
Online food delivery and grocery players have managed to get a fairly big slice of the funding
pie in 2018-19, rustling up close to . A $2 billion
big chunk of this would be used to create delivery infrastructure and acquire customers.
Global trade growth is expected to be lower at
2.6% 3% in 2019 than the growth recorded in
2018, according to the World Trade Organization. It attributed its dismal outlook to widespread “tensions” and economic uncertainty. This could have a major impact on the outbound shipment from India.
The Ipsos' What Worries the World Global Survey observed that worries notwithstanding, India
bucks the global trend of pessimism where 22
countries 28 nations out of the covered feel
their country is on the wrong track. Indians are most worried about terrorism, unemployment, and �nancial and political corruption, even as at
least of the countrymen are optimistic that 73%
the nation is headed in the right direction, according to the survey.
India retained its position as the world's top recipient of remittances with its diaspora
sending a whopping back home USD 79 billion
in 2018, according to the latest edition of the World Bank's Migration and Development Brief.
India was followed by China , (USD 67 billion)
Mexico , the Philippines (USD 36 billion) (USD
34 billion) (USD 29 billion), and Egypt . Over the
last three years, India has registered a signi�cant
�ow of remittances from in USD 62.7 billion
2016 to 2017.USD 65.3 billion
PHD House, 4th Floor, Siri Institutional Area, Opp. Asian Games Village, New Delhi-110 016. India Tel.: +91 11 - 2685 1187 / 2656 4291 | Fax: +91 11 - 2686 4799
Headquartered in New Delhi (India), Automo�ve Tyre Manufacturers’ Associa�on (ATMA) is amongst the most ac�ve and well known na�onal industry bodies in the country. Being a representa�ve body of eleven large tyre companies in India accoun�ng for over 90% of tyre produc�on, ATMA has been accorded status as the true voice of the Indian tyre industry.
ATMA works towards promo�ng and safeguarding the interests of the tyre industry in India primarily by ac�ng as conduit between the Government and the industry. The Associa�on strives to be an ac�ve par�cipant in policy making process and holds frequent mee�ngs with the Government departments to discuss the challenges being faced by the industry in the ever-changing economic environment.
The Associa�on acts as the industry’s interface with the media, opinion leaders, NGOs and other Industry associa�ons around the world so as to present the perspec�ve of Indian tyre industry on different issues.
ATMA Research
ATMA Research is a specialized in-house resource of Automo�ve Tyre Manufacturers’ Associa�on that aims at compiling, and analyzing informa�on on automo�ve tyres as well as upstream (Natural Rubber and other raw materials) and downstream (Automobile) sectors in India. The informa�on for analysis is sourced from authen�c and reliable sources including tyre majors, Government departments, regulatory bodies, other industry associa�ons and apex industry chambers.
Disclaimer:Automo�ve Tyre Manufacturers’ Associa�on (ATMA), has taken due care and cau�on in preparing this Report based on the informa�on/data obtained by ATMA from sources which it considers authen�c and reliable. However, ATMA does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommenda�on to invest / disinvest in any company or sector covered in the Report. No part of this Report may be published / reproduced in any form without ATMA’s prior wri�en approval.
ATMA Research Automo�ve Tyre Manufacturers’ Associa�onMay 2019
Source: Interna�onal Engery Agency (IEA), ANRPC, OICA, J.D. Power India Research, ASEAN Automo�ve Federa�on,Central Electricity Authority (CEA), Kantar IMRB, China Daily, commercialfleet.org ; primemovermag.com.au
