Professional Documents
Culture Documents
Automotive Industry in India
Automotive Industry in India
The automotive industry in India is one of the largest in the world with an annual
production of 23.96 million vehicles in FY (fiscal year) 2015–16, following a
growth of 2.57 per cent over the last year. The automobile industry accounts for 7.1
per cent of the country's gross domestic product (GDP). The w
T o Wheelers segment,
with 81 per cent market share, is the leader of the Indian Automobile market, owing
to a growing middle class and a young population. Moreover, the growing interest of
Chennai is home to around 35–40%
companies in exploring the rural markets further aided the growth of the sector. The of India's total automobile industry.
overall Passenger Vehicle (PV) segment has 13 per cent market share.
India is also a prominent auto exporter and has strong export growth expectations for
the near future. In FY 2014–15, automobile exports grew by 15 per cent over the last
year. In addition, several initiatives by the Government of India and the major
automobile players in the Indian market are expected to make India a leader in the
[1]
Two Wheeler (2W) and Four Wheeler (4W) market in the world by 2020.
Market size
The industry produced a total 14.25 million vehicles—including passenger vehicles
(PV), commercial vehicles (CV), and three- and two wheelers (3W and 2W)—in
April–October 2015, as against 13.83 in April–October 2014, registering a marginal
growth of 3.07 per cent, year-to-year.
The sales of PVs grew by 8.51 per cent in April–October 2015 over the same period
in the previous year. The overall CVs segment registered a growth of 8.02 per cent
Auto Expo 2014, Noida
in April–October 2015 as compared to same period last year. Medium- and heavy
commercial vehicles (MCV and HCV) registered very strong growth of 32.3 per
cent, while sales of light commercial vehicles (LCV) declined by 5.24 per cent during April–October 2015, year
-to-year.
In April–October 2015, overall automobile exports grew by 5.78 per cent. PVs, CVs, 3Ws, and 2Ws registered growth of 6.34 per
cent, 17.95 per cent, 18.59 per cent, and 3.22 per cent, respectively [2]
, in April–October 2015, over April–October 2014.
Investments
In order to keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry
during the last few months. The industry has attracted foreign direct investment (FDI) worth US$17.4 billion during the period April
2000 to June 2017, according to data released by Department of Industrial Policy and Promotion (DIPP).
Some of the major investments and developments in the automobile sector in India are as follows:
Global auto maker Ford plans to manufacture in India two families of engines by 2017, a 2.2 litre diesel engine code-
named Panther, and a 1.2 litre petrol enginecode-named Dragon, which are expected to power 270,000 Ford
vehicles globally.
The world's largest air bag suppliers Autoliv Inc, a
Tkata Corp, TRW Automotive Inc and Toyoda Gosei Co are setting
up plants and increasing capacity in India.
General Motors plans to invest US$1 billion in India by 2020, mainly to increase the capacity at thealegaon
T plant in
Maharashtra from 130,000 units a year to 220,000 by 2025.
US-based car maker Chrysler has planned to invest Rs 3,500 crore
(US$525 million) in Maharashtra, to manufacture Jeep Grand Cherokee
model.
Mercedes Benz has decided to manufacture the GLA entry SUV in
India. The company has doubled its India assembly capacity to 20,000
units per annum.
Germany-based luxury car maker Bayerische Motoren W erke AG's
(BMW) local unit has announced to procure components from seven
India-based auto parts makers.
Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares in
France-based Peugeot Motorcycles (PMTC).[2]
Interior of Tata ConnectNext EV
concept car at 2015 Geneva Motor
Government Initiatives Show
causing demand to outstrip supply, with month-long waiting periods for cars,
scooters, and motorcycles.
Passenger Cars
Vehicle Factory Jabalpur- started manufacturingJonga Light Utility Vehicles and Vahan 1 Ton (Nissan 4W73
Carriers) in India, under license fromNissan of Japan. They were the main troop carriers of theIndian Armed Forces
and much powerful than any other vehicle of their class.
Mahindra & Mahindra, Bombay - technical collaboration withWillys to manufacture CJ Series Jeep.
Bajaj Tempo, Poona now Force Motors - technical collaboration withTempo (company) to manufacture Tempo
Hanseat, a three-wheeler and Tempo Viking and Hanomag, later known as T empo Matador in India.
Standard Motor Products of India- technical collaboration fromStandard has licence to manufacture theStandard
Atlas passenger van with panel van and one-tonne one tonne pickup variants.
Medium and Heavy Commercial Vehicles
Vehicle Factory Jabalpur- started manufacturingShaktiman trucks with technical assistance fromMAN SE of
Germany. The trucks were the main logistics vehicle of theIndian Army with several specialist variants. VFJ still is
the sole supplier of B vehicles to the Indian Armed Forces.
Heavy Vehicles Factory - was established in 1965 in Avadi, near Chennai to produce tanks in India. Since its
inception, HVF has produced all the tanks of India, includingVijayanta, Arjun, Ajeya, Bhishma and their variants for
the Indian Army. HVF is the only tank manufacturing facility of India.
Tata Motors, Poona, then known as TELCO - technical collaboration withMercedes Benz to manufacture medium to
heavy commercial vehicles both Bus and T rucks.
Ashok Motors, later Ashok Leyland, Madras - technical collaboration withLeyland Motors to manufacture medium to
heavy commercial vehicles both Bus and T rucks. Ashok Motors also discontinued itsAustin venture formed in 1948
to sell Austin A40 and retooled the factory to make trucks and buses.
Hindustan Motors - technical collaboration withGeneral Motors to manufacture the Bedford range of medium lorry
and bus chassis.
Premier Automobiles - technical collaboration withChrysler to manufacture the Dodge, Fargo range of medium lorry,
panel vans, mini-bus and bus chassis.
Simpsons & Co, Madras - part of Amalgamations Group (TAFE Tractors)- technical collaboration withFord to
manufacture medium lorry and bus chassis, but did not utilise that option until the 1980s.
Scooters, Mopeds and Motorcycles
known as Bajaj Chetak, by Bajaj became the largest sold scooter in the world
1970 to 1983
However, growth was relatively slow in the 1950s and 1960s, due to nationalisation and the license raj, hampered the growth of
Indian private sector.
The beginning of the 1970s saw some growth potential and most of the collaboration license agreements came to an end but with
option to continue manufacturing with renewed branding. Cars were still meant for the elite and Jeeps were largely used by
government organizations and some rural belts. In commercial vehicle segments some developments were made by the end of the
decade to cater improved goods movements. The two-wheeler segment remained unchanged except for to increased sales in urban
among middle class. But more fillip was target towards farm tractors as India was embarking on a new Green Revolution. More
Russian and eastern bloc imports were done to increase the demand.
But after 1970, with restrictions on the import of vehicles set, the automotive industry started to grow; but the growth was mainly
driven by tractors, commercial vehicles and scooters. Cars still remained a major luxury item. In the 1970s, price controls were
finally lifted, inserting a competitive element into the automobile market.[6] However, by the 1980s, the automobile market was still
dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers.[7] During the eighties, a few
competitors began to arrive on the scene.
The OPEC oil crisis saw increase need to installing or redesign some vehicle to fit diesel engines on medium commercial vehicle.
Until the early 1970s Mahindra Jeeps were on Petrol and Premier commercial vehicles had Petrol model options. The Defence sector
too had most trucks on Pertol engines.
1984 to 1992
From the end of the 1970s to the beginning of the 1980s saw no new models but the
country continued with 2 decade old designs forcing government to encourage and
let more manufacturers into fray.
In 1984, the then Prime Minister of India, Indira Gandhi established the Ordnance
Factory Medak, near Hyderabad. It started manufacturing Infantry Combat Vehicles
christened as Sarath, the backbone of India's mechanised infantry. OFMK is still the
only manufacturing facility of ICVs in India. To manufacture the high-power
engines used in ICVs and main battle tanks, Engine Factory Avadi, near Chennai
was set in 1987. In 1986, to promote the auto industry, the government established First generation Maruti 800 launched
the Delhi Auto Expo. The 1986 Expo was a showcase for how the Indian automotive in 1984
industry was absorbing new technologies, promoting indigenous research and
development, and adapting these technologies for the rugged conditions of India.
The nine-day show was attended by then Prime MinisterRajiv Gandhi.
Post-1992 liberalisation
Eventually multinational automakers, such as, Suzuki and Toyota of Japan and
Hyundai of South Korea, were allowed to invest in the Indian market, furthering the
establishment of an automotive industry in India. Maruti Suzuki was the first, and
the most successful of these new entries, and in part the result of government
policies to promote the automotive industry beginning in the 1980s.[7] As India
began to liberalise its automobile market in 1991, a number of foreign firms also
initiated joint ventures with existing Indian companies. The variety of options
available to the consumer began to multiply in the nineties, whereas before there had Tata Indica, launched in 1997
usually only been one option in each price class. By 2000, there were 12 large
automotive companies in the Indian market, most of them offshoots of global
companies.[8]
Emission norms
In 2000, in line with international standards to reduce vehicular pollution, the central government unveiled standards titled "India
2000", with later, upgraded guidelines to be known as Bharat Stage emission standards. These standards are quite similar to the
stringent European emission standards and have been implemented in a phased manner. Bharat Stage IV (BS-IV), the most stringent
so far, was implemented first, in April 2010, in 13 cities—Delhi (NCR), Mumbai, Kolkata, Chennai, Bangalore, Hyderabad,
Ahmedabad, Pune, Surat, Kanpur, Lucknow, Solapur, and Agra—and then, as of April 2017, the rest of the nation.
Local manufacture encouraged
India levies an import tax of 125% on foreign imported cars, while the import tax on
components such as gearboxes, airbags, drive axles, is 10%. Therefore, the taxes
encourage cars to be assembled in India rather than be imported as completely built
units.[11]
Manufacturing facilities
Maruti Suzuki Swift Dzire and its
The majority of India's car manufacturing industry is evenly divided into three hatchback version are the largest
"clusters". Around Chennai is the southernmost and largest, with a 35% revenue selling cars in recent years in India
share, accounting for 60% of the country's automotive exports, and home of the
operations of Heavy Vehicles Factory, Engine Factory Avadi, Ford, Hyundai,
Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, Mini, and Datsun.[12][13]
Near Mumbai, Maharashtra, along the Chakan corridor near Pune, is the western cluster, with a 33% share of the market. Audi,
Volkswagen, and Skoda are located in Aurangabad. Mahindra and Mahindra has an SUV and engine assembly plant at Nashik.
General Motors, Tata Motors, Mercedes Benz, Land Rover, Jaguar, Fiat, and Force Motors have assembly plants in the area.[14][15]
The northern cluster is around the National Capital Region, and contributes 32%. Gurgaon and Manesar, in Haryana, are where the
country's largest car manufacturer, Maruti Suzuki, is based.
An emerging cluster is the state of Gujarat, with a manufacturing facility of General Motors in Halol, and a facility for Tata Nano at
their plant in Sanand. Ford, Maruti Suzuki, andPeugeot-Citroen plants are also planned for Gujarat.[16]
Kolkata with Hindustan Motors (inactive), Noida with Honda, and Bengaluru with Toyota are other automotive manufacturing
regions around the country.[17][18][19]
Andhra Pradesh
Two wheelers
Off-highway vehicles
Gujarat
Passenger vehicles
Haryana
Two wheelers
Passenger vehicles
Himachal Pradesh
Two wheelers
Passenger vehicles
Commercial vehicles
Jharkhand
Commercial vehicles
Karnataka
Two wheelers
Passenger vehicles
Commercial vehicles
Madhya Pradesh
Two wheelers
Passenger vehicles
Commercial vehicles
Punjab
Commercial vehicles
Mahindra 3616 Four Wheel Drive
sold in USA
SML Isuzu Limited – Nawanshahar[65] (originally a Swaraj Mazda plant).
Preet Tractor, Nabha.
Sonalika Tractor Pvt Ltd, Hoshiarpur.
Rajasthan
Two Wheelers
Passenger vehicles
L&T 752 Road Roller 2015
Honda Cars India Ltd. – Tapukara[66]
Commercial vehicles
Two wheelers
Passenger vehicles
Commercial vehicles
Uttar Pradesh
Two wheelers
Passenger vehicles
Commercial vehicles
Uttarakhand
Commercial vehicles
Two wheelers
West Bengal
Passenger vehicles
Commercial vehicles
Exports
India's automobile exports have grown consistently and reached $4.5 billion in 2009,
with the United Kingdom being India's largest export market, followed by Italy,
Germany, Netherlands, and South Africa.[80]
According to the New York Times, India's strong engineering base and expertise in
the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of
manufacturing facilities of several automobile companies like Hyundai, Nissan,
Toyota, Volkswagen, and Maruti Suzuki.[81]
In 2008, South Korean multinational Hyundai Motors alone exported 240,000 cars Mahindra Scorpio in service with
made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its Italy's CNSAS.
India plant by 2011.[82] Similarly, US automobile company, General Motors
1.[83]
announced its plans to export about 50,000 cars manufactured in India by 201
In September 2009, Ford Motors announced its plans to set up a plant in India with an annual capacity of 250,000 cars, for US$500
[84] The company said that the plant was a part of its
million. The cars will be manufactured both for the Indian market and for export.
plan to make India the hub for its global production business.[85] Fiat Motors announced that it would source more than US$1 billion
worth auto components from India.[86]
In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after Japan (1.77m), Korea (1.12m) and
Thailand (0.26m).[87]
In July 2010, The Economic Times reported that PSA Peugeot Citroën was planning to re-enter the Indian market and open a
production plant in Andhra Pradesh that would have an annual capacity of 100,000 vehicles, investing € 700M in the operation.[88]
PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010.
In recent years, India has emerged as a leading center for the manufacture of small cars. Hyundai, the biggest exporter from the
country, now ships more than 250,000 cars annually from India. Apart from Maruti Exports' shipments to Suzuki's other markets,
Maruti Suzuki also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small cars from its new
Indian assembly line. Tata Motors exports its passenger vehicles to Asian and African markets, and is preparing to sell electric cars in
Europe in 2010. The firm is planning to sell an electric version of its af
fordable car the Tata Nano in Europe and in the U.S. Mahindra
& Mahindra is preparing to
introduce its pickup trucks and
small SUV models in the U.S.
market. Bajaj Auto is designing a
low-cost car for Renault Nissan
Automotive India, which will
market the product worldwide.
Renault Nissan may also join
domestic commercial vehicle
A Tata Safari on display in Poznań, The Maruti Ertiga, a model exported
manufacturer Ashok Leyland in
Poland. by Maruti Suzuki, India.
another small car project.[89] While
the possibilities for the Indian
automobile industry are impressive, there are challenges that could thwart future growth. Since the demand for automobiles in recent
years is directly linked to overall economic expansion and rising personal incomes, industry growth will slow if the economy
weakens.[89]
Sipani Automobiles
Standard Motor Products of India
Nissan:GT-R.
Porsche:[165][166] 997, Boxster, Panamera, Cayman, Cayenne, Carrera
GT, Macan.
Rolls Royce:[167] Ghost, Wraith, Phantom, Phantom Coupé, Phantom
Drophead Coupé.
SsangYong (subsidiary of Mahindra & Mahindra):[168] Rexton.
Toyota:[143] Land Cruiser, Land Cruiser Prado, Prius.
Volkswagen:[169] Beetle.
Volvo:[170] V40, V90, S60, S90, XC60, XC90.
Mitsubishi Lancer Evolution X
Indian brands
AMW[171]
Eicher Motors[172]
Force[173]
Hindustan Motors[174]
Mahindra & Mahindra
Premier[120]
Tata Motors[175]
Hero Motocorp
Jaguar
Land Rover
Bajaj Auto
TVS Motor
Joint-venture (JV) brands
Ashok Leyland[176] - originally a JV betweenAshok Motors (owned by the Hinduja Group) and Leyland Motors, now
joint ventures between Ashok Leyland andNissan Motors (Japan) for LCV's; andJohn Deere (USA) for construction
equipment.[177]
KaMAZ Vectra[178] - A JV between Russia'sKaMAZ and the Vectra Group
MAN Force - A JV between Force Motors and MAN AG (Germany)
SML Isuzu - originally, as Swaraj Mazda, a JV between Punjab Tractors and Mazda, now 53.5% owned by
Sumitomo Group and with its current name since 2011.[179]
Tatra Vectra Motors Ltd - (defunct) Initial truck partnership with India by V
ectra. Replaced by Kamaz. Tatra trucks for
sale in India are now manufactured in collaboration withBharat Earth Movers Limited.
VE Commercial Vehicles Limited[180] - VE Commercial Vehicles limited - A JV between Volvo Group and Eicher
Motors Limited.
Maruti Suzuki - A joint venture of IndianMaruti and Japanese Suzuki.
Foreign-owned brands
J. C. Bamford (JCB) (Owned by British multinational corporationJ. C. Bamford).
BharatBenz (Owned by Daimler AG of Germany and affiliated with Daimler's Fuso and Mercedes-Benz brands)[181]
Caterpillar Inc.[182]
DAF[183]
Hino[184]
Isuzu[185]
Iveco[186]
MAN
Mercedes-Benz[187] - manufactures luxury coaches in India.
Piaggio[188]
Rosenbauer.[189]
Scania[190]
Tatra.[191]
Volvo.[192]
See also
Media related to Automobile manufacturers of Indiaat Wikimedia Commons
Automobile industry
Automotive Industry Standards, the automotive regulations of India
Electric vehicle industry in India
Electronics and semiconductor manufacturing industry in India
Lists of automobile-related articles
List of car brands
List of truck manufacturers
List of motorcycle manufacturers(Category)
List of scooters - List of scooter manufacturers
List of countries by motor vehicle production
List of countries by vehicles per capita
List of Asian cars
List of automobile manufacturers of China
List of Japanese cars
List of vehicle plants in India
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