Automotive Industry in India

Automobiles today resemble “computers on wheels” because of the increasing number of digital systems. With each model year, vehicle manufacturers offer more sophisticated electronic systems addressing vehicle safety and infotainment. The costs associated with these sophisticated systems are also rising.

Automobile industry of India can be broadly classified under passenger vehicles, commercial vehicles, three wheelers and two wheelers, with two wheelers having a maximum market share of more than 75%.

Facts:

The Automotive Industry in India is one of the largest industries and a key sector of the economy.

The Indian automotive industry started from 1991with the government’s de-licensing of the sector and subsequent opening up for 100 per cent FDI through automatic route. Since then many large global companies have set up their facilities in India taking the production of vehicle from 2 million in 1991 to 9.7 million in 2006.

At present, India is the world's
- Largest tractor and three-wheel vehicle producer.
- Second largest two-wheel vehicle producer.
- Fourth largest commercial vehicle producer.
- Eleventh largest passenger car producer.

Automobile Dealers Network in India

In terms of Car dealer networks and authorized service stations, Maruti leads the pack with Dealer networks and workshops across the country. The other leading automobile manufactures are also trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the customers in the form of reduced interest rates.

Major Manufacturers in Automobile Industry

- Maruti Udyog Ltd.
- General Motors India
- Ford India Ltd.
- Eicher Motors
- Bajaj Auto
- Daewoo Motors India
- Hero Motors
- Hindustan Motors
- Hyundai Motor India Ltd.
- Royal Enfield Motors

The Future

- The Indian automobile industry is expected to grow to US$ 40 billion by 2015 from the current level of US$ 7 billion in 2008. By the year 2016 the industry is expected to contribute 10% of the nation’s GDP. The industry manufacturers over 11 million vehicles a year, employing more than three million people.

- The greatest challenge and competition would be from the Chinese automobile industry. The Chinese automobile industry has been able to give stiff completion to India in terms of productivity, cost of manufacturing and technology. Again the present trend of excess manufacturing capability, reduced margins put additional pressure on the industry.

- The global recession has had a dampener effect on the growth of the industry, but market experts believe it is only a short term phenomenon and are confident of the industry bouncing back.

- On the positive side, India’s strength in software sector, combined with skilled labor and low cost of manufacturing should place it in a favorable position globally.

- Recently Ratan Tata, Chairman (Tata Motors) created history by launching the world's cheapest car NANO. The cars pricing is around one lakh, gaining instant recognition in the automobile industry across the globe. It heralded the coming to age of the Indian Automobile Industry.