INDIAN AUTOMOBILE

INDUSTRY











INDIAN AUTOMOBILE INDUSTRY
Size of the
Industry
2.6 Million Units
Geographical
distribution
Jamshedpur, Pune, Lucknow,
Gurgoan, Delhi, Mumbai, Bangalore,
etc
Output per annum Rs 2,000 crore per annum
Percentage in
world market
6-8%
Market
Capitalization
5% of the share



History
Indian market before independence was seen as
a market for imported vehicles while assembling
of cars manufactured by General Motors and
other brands was the order of the day. Indian
automobile industry mainly focused on
servicing, dealership, financing and
maintenance of vehicles. Later only after a
decade from independence manufacturing
started. India's Transportation requirements
were met by Indian Railways playing an
important role till the 1950's. Since
independence the Indian automobile industry
faced several challenges and road blocks like
manufacturing capability was restricted by the
rule of license and could not be increased but

still it lead to growth and success it has achieved
today.

For nearly three decades the total production of passenger cars was limited to
40,000 yearly. Even the production was confined to three main manufacturers
Hindustan Motors, Premier Automobiles and Standard Motors. There was no
expertise or research & development initiative taking place. Initially labor was
unskilled and had to go through a process of learning through trial and error. In
the 1950's, The Morris Oxford, became the Ambassador, the Fiat 1100 became the
Premier Padmini. Then in 1960's nearly 98% of the product was developed
indigenously.There were significant changes witnessed by the end of 1970's in the
automobile industry. Strong and huge initiatives like joint ventures for light
commercial vehicles did not succeed. Contessa, the Rover and the Premier 118NE,
which were the new models, hit the market. Till later part of 1980's India by and
large followed a socialist system. The main focus of the government was
development through heavy, long gestation, capital intensive projects like steel
manufacturing. Priority was to the quality of the finished good and customer
feedback.
Brief introduction

The Indian Automobile industry includes two-
wheelers, trucks, cars, buses and three-
wheelers which play a crucial role in growth of
the Indian economy. India has emerged as Asia's
fourth largest exporter of automobiles, behind
Japan, South Korea and Thailand. The country is
expected to top the world in car volumes with
approximately 611 million vehicles on the
nation's roads by 2050.The Economic progress
of this industry is indicated by the amount of
goods and services produced which give the
capacity for transportation and boost the sale of
vehicles. There is a huge increase in automobile
production with a catalyst effect by indirectly
increasing the demand for a number of raw
materials like steel, rubber, plastics, glass, paint,
electronics and services.
Market capitalization

Total contribution to the economy/ sales

The share of Automobile industry in
the last decade in the Indian
economy was around 5% of GDP. The
Indian Automobile industry has
become the seventh largest in the
world with an annual production of
over 2.6 million units in 2009.
Domestic and Export Share
Passenger Car -- 25468121478
Multi Utility Vehicles -- 26543892
Commercial Vehicles -- 1010819931
Two Wheelers -- 100002256765
Three Wheelers -- 2113851535
Percentage Growth -- 16.632.8
According to the research of Society of Indian Automobile Manufacturers (SIAM),
the overall vehicle sales grew by 30 % in May 2010 to 1,208,851 units, and 8 per
cent over the previous month of April 2010. Two wheeler sales rose 29 %, with
motorcycle sales increasing 26% to 725,311 units, and scooter sales rising% to
157,509 units in May 2010. Commercial vehicle sales rose 58 % in May 2010. The
medium and heavy commercial vehicle (M&HCV) segment grew to 33.5 % at
245,058 units and total commercial vehicle (CV) sales went up to 38.3 % to
531,395 units in 2009-10. At an estimated 25 % growth, the M&HCV segment
would be about 306,000 units; total CV sales would be about 664,000 units in
2010-11. Mahindra and Mahindra (M&M) is the world's number one tractor
company by selling a record of 1.59 lakh tractors in 2009 surpassing John Deere of
the US.
Top & 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
Telco
TVS Motors
DC Designs
Swaraj Mazda Ltd
Employment opportunities
India today is well known as a potential emerging automobile market and jobs in
the automobile industry are rising. Several foreign investments are pouring into
Indian automobile industry. It has become a major three-wheeler market and two-
wheeler manufacturer in the world. India is also the second largest manufacturer
of tractors. Candidates with bachelor's degree in mechanical, electrical or
automobile engineering are eligible to get good job opportunities in automobile
companies.
For the candidates with diploma courses and ITI courses there are many
opportunities in this industry. Automobile companies even require IT
specializations. While technical education is offered by plenty of engineering and
polytechnic colleges in India,. the eligible candidates are selected by the
companies. The considerable wide scope of Automobile sector, it is not that
surprising that more and more candidates are dreaming to develop a career in
Automobile Industry. With foreign automobile companies like Volkswagen, Audi,
Renault etc coming in and targeting India as a base for manufacturing cars, the
scope for a career in Automobile Industry is rising rapidly.
Year of commencement & periods of development
The Automobile Industry of India has come a long way since in 1898 the first car
rolled out on the streets of Mumbai (then Bombay). Indian auto industry, is
currently growing at the pace of around 18 % per annum, has become a hot
destination for global auto manufacturers like Volvo, General Motors and Ford.
The Indian Automobile industry has adopted global standards which are
manifested in the increasing exports of this sector. After a temporary decline in
the years 1998- 99 and 1999-00, exports increased with robust growth rates of
well over 50 per cent in 2002-03 and 2003-04 each to exceed two and- a-half times
the export figure for 2001-02.
The research of ministry of commerce and industry, shows high growth obtained
since 2001- 02 in automobile production which continued for the first three
quarters of the 2004-05. The Annual growth of the industry was 16.0 per cent in
April-December, 2004; the growth rate in 2003-04 was 15.1 per cent. The
compound annual growth rate (CAGR) of Indian Automobile Industry is of 22 per
cent between 1992 and 1997. While the investments exceeding to Rs. 50,000
crore, the turnover of the industry was Rs. 59,518 crore in 2002-03. It even
estimated to have exceeded Rs.1, 00,000 crore (USD 22. 74 billion) in 2003-04.
Pollution
The category for Indian Automobile Industry is "Red" which represents the highly
polluting industries Several Automobile exhaust pollutants are as follows:
Hydrocarbons - are emissions caused by partially burnt fuel molecules and
they react in the presence of nitrogen oxides and sunlight to from ground
level ozone.
Nitrogen Oxides are the gases of precursors to the formation of ozone and
also contribute in the formation of acid rain. Ironically the catalytic
converters are designed to break down nitrogen gases are generally forming
nitrous oxide which is more potent as pollutant than carbon dioxide as
greenhouse gas.
When a vehicle starts Carbon Monoxide is emitted without proper air
supply, when the tuning of the vehicle is not proper and when a vehicle is
driven at high altitudes where the oxygen content is lesser than in the
plains. Carbon monoxide emissions great share comes from the commercial
vehicles especially the heavier ones.
Carbon Dioxide in greater quantities traps the earth's heat and contributes
to global warming.
Pollution handling and environmental issues faced by the industry.
If it is believed that smoking is harmful then there is a need to take a break from
the personal automobile as the favorite set of wheels could be harming the
environment and even the health more. As rest of the world is catching up with
the concept of personal cars in the country, where days back having a car for the
entire family will soon become a thing of the past as each bread winner of the
family wants his or her personal set of wheels. Hence it is would not be surprising
that the pollution levels in several metros of the country like Delhi, Mumbai,
Kolkata and Bangalore are on the increase. In the cars the pollution comes from
the process of the evaporation of the fuel and from the by-products of the
combustion process.
Cars use Petrol and Diesel which are a mixture of Hydrocarbons and compounds
usually contain Hydrogen and carbon items. In simple terms the Oxygen in the air
converts all the Hydrogen in the fuel to water and Carbon in the fuel would be
converted to Carbon Dioxide. Nitrogen is supposed to remain unaffected in this
whole process. However things are not that good as they look and engines are not
that perfect either. Several types of harmful gases are emitted in the whole
process of combustion which leaves the air polluted.
The government is taking and has taken steps to introduce catalytic converters in
the country a few years back to reduce air pollution. In addition to this petrol with
lead has been phased out from several parts of the country to cut down on lead
particles in the exhaust.
In addition to this several cars and two wheeler companies are striving hard
themselves to provide pollution free environment. Companies like Tata Motors
and Mahindra are fine tuning their Diesel engines for optimum performance and
reduced emission. In the two-wheelers category the companies like Hero Honda is
providing pollution free vehicles.
With all this support from the companies, Government has to take a proactive role
to reduce the pollution levels in the country and should try phasing out old
vehicles and impose heavy fines on cars and heavy vehicles that pollute the
environment. It should provide tax benefits to electric cas like Reva as they don't
pollute the environment and take very little space on the already congested Indian
roads. Today in India several new trends are emerging to tackle the problem of
pollution like people are opting for car pools while a small number are cycling their
way to work.
Achievements
The development story of the Indian automobile industry cannot be complete
without mentioning the Pioneer Mr. J.R.D Tata's role in setting up the Tata group
with high standard Engineering Research Centre (ERC) in 1965 to facilitate
technological advancement. Pioneering the indigenization of scientific knowledge
for trucks in collaboration with Mercedes Benze and launched Maruti 800 in the
year 1983 which changed the dynamics of the passenger car sector in India. It was
also known as the people's car. 60% of the Indian commercial vehicle market is
dominated by Tata Motors.
The first automobile was launched in India in the year 1897 in Bombay.
Today India is being recognized as a potential emerging auto market.
The industry adds up foreign players to their investments.
80% of the segment size is contributed by two-wheelers & motorcycles.
Indian passenger vehicle market is dominated by cars (79%) unlike the USA.
India is the largest three-wheeler & two-wheeler market in the world. It is
second largest tractor manufacturer in the world, fifth largest commercial
vehicle manufacturer in the world.
India crossed the 1 million mark as the fourth largest car market in Asia
recently.
The 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.
Very recently history has been created in the world of Automobile Industry
by Ratan Tata, Chairman (Tata Motors) by launching the world's cheapest
car NANO. The price of the car was around one lakh which gained instant
recognition in the automobile industry across the globe. It heralded the
coming to age of the Indian Automobile Industry.
India is the second Largest Producer of Motorcycles in the world (5.2 Mln)
after China which has a production volume of 12 Mln.