INDUSTRY PROFILE

HISTORY OF AUTOMOBILE

Automobile is one of the largest industries in global market. Commercial production of

automobiles began in 1896 in the United States. In 1929, before the Great Depression, the
world had 32,028,500 automobiles in use, and the U.S. automobile industry produced over
90% of them. At that time, the U.S. had one car per 4.87 persons. An embryonic automotive
industry emerged in India in the 1940s. After 1945, the U.S. produced about 75 percent of
world's auto production. In 1980, the U.S. was overtaken by Japan and then became world's
leader again in 1994. In 2006, Japan narrowly passed the U.S. in production and held this
rank until 2009, when China took the top spot with 13.8 million units. With 19.3 million units
manufactured in 2012, China almost doubled the U.S. production of 10.3 million units, while
Japan was in third place with 9.9 million units. From 1970 (140 models) over 1998 (260
models) to 2012 (684 models), the number of automobile models in the U.S. has grown
exponentially. Being the leader in product & process technologies in the manufacturing
sector. It has been recognized as one of the drivers of economic growth.

During the last decade well-directed efforts have been made to provide a new look to the
automobile policy for recognizing the sector full potential for the company. Steps like
abolition of licensing removal of quantitative restrictions & initiatives to bring the policy
framework in consonance with WTO requirements have set the industry in a Progressive
track. Removal of the restrictive environment has helped restructuring & enabled industry to
absorb new technologies, aligning itself with the global development & to realize its potential
in the Country. The liberalization in line with the Global Standards as well as in substantial
cut in price

EVOLUTION OF THE TWO WHEELER INDUSTRY

Two wheeler segment is one of the most important components of the Automobile sector
that has undergoes significant changes due to shift in policy environment. The two-wheeler
industry has been in existence in the Country since 1955. It consists of three segments viz.
Scooter, Motorcycles and Mopeds

According to the figures published by SIAM the share of two wheelers in automobile sector
in terms of units sold was about 80 per cent during 2003-04. This high figure itself is
suggestive of the importance of the sector. In the initial years, entry of firms, capacity
expansion, and choice of products including capacity mix and Technology, the State
machinery effectively controlled all critical areas of functioning of an industry.
ECONOMY
In 2007, there were about 806 million cars and light trucks on the road, consuming over 980
billion litres (980,000,000 m3) of gasoline and diesel fuel yearly. The automobile is a
primary mode of transportation for many developed economies. The Detroit branch of Boston
Consulting Group predicted that, by 2014, one-third of world demand would be in the four
BRIC markets (Brazil, Russia, India and China). Meanwhile, in the developed countries, the
automotive industry has slowed. It is also expected that this trend will continue, especially as
the younger generations of people (in highly urbanized countries) no longer want to own a
car anymore, and prefer other modes of transport. Other potentially powerful automotive
markets are Iran and Indonesia.[Emerging automobile markets already buy more cars than
established markets. According to a J.D. Power study, emerging markets accounted for 51
percent of the global light-vehicle sales in 2010. The study, performed in 2010 expected this
trend to accelerate. However, more recent reports (2012) confirmed the opposite; namely that
the automotive industry was slowing down even in BRIC countries. In the United States,
vehicle sales peaked in 2000, at 17.8 million units.

AUTOMOBILE INDUSTRY IN INDIA

In 1897, the first car ran on an Indian road. Through the 1930s, cars were imports only, and in
small numbers.
An embryonic automotive industry emerged in India in the 1940s. Hindustan Motors was
launched in 1942, long-time competitor Premier in 1944, building Chrysler, Dodge, and Fiat
products respectively. Mahindra & Mahindra was established by two brothers in 1945, and
began assembly of Jeep CJ-3A utility vehicles. Following independence in 1947, the
Government of India and the private sector launched efforts to create an automotive-
component manufacturing industry to supply to the automobile industry. In 1953, an import
substitution programme was launched, and the import of fully built-up cars began to be
restricted.

MANUFACTURING FACILITIES
The majority of India's car manufacturing industry is evenly divided into three "clusters".
Around Chennai is the southernmost and largest, with a 35% revenue 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, Citroën and Datsun.
Near Mumbai, Maharashtra, along the Chakan corridor near Pune, is the western cluster, with
a 33% share of the market. Audi, Volkswagen, and Škoda 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.
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 MG Motors in
Halol, Atul Auto in Rajkot, Ford, Oculus Auto in Sabarkantha, Maruti Suzuki, and Peugeot-
Citroën plants are also planned for Gujarat.
Kolkata with Hindustan Motors (inactive), Noida with Honda, and Bengaluru with Toyota,
Volvo and Scania and Andhra with Isuzu and Kia are other automotive manufacturing
regions around the country.

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, the
Netherlands, and South Africa.
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
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 affordable car the Tata Nano in Europe and in the
U.S. In the 2000s, Mahindra & Mahindra prepared to introduce its pickup trucks and small
SUV models in the U.S. market, but cancelled its plans. As of 2019, it is assembling and
selling an off-road vehicle (Mahindra Roxor; not certified for road use) in limited numbers in
the U.S. It is also sold in Canada. 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 manufacturer Ashok Leyland in another small car project.
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.

Automotive Research Association of India - Standards

The Government of India felt the need for a permanent agency to expedite the publication of
standards and development of test facilities in parallel with the work of the preparation of the
standards - as the development of improved safety critical parts could be undertaken only
after the publication of the standard and commissioning of test facilities. The Ministry of
Surface Transport (MoST) constituted a permanent Automotive Industry Standards
Committee (AISC) . The Standards prepared by AISC will be approved by the permanent
CMVR Technical Standing Committee (CTSC). After approval, the Automotive Research
Association of India (ARAI) will publish this standard.

Intelligent Transport Systems (ITS) are globally proven systems to optimize the utilization of
existing transport infrastructure and improve transportation systems in terms of efficiency,
quality, comfort and safety. Having realized the potential of ITS, Government bodies and
other organizations in India are presently working towards implementing various components
of ITS across the country.

The first step taken for creation and implementation of ITS was holding a National Workshop
titled "User Requirements for Interactive ITS Architecture", which was conducted as a
collaboration between SIAM and ASRTU on 26 & 27 February 2015. This was primarily
focused on ITS in Public Bus Transportation. Nonetheless, the workshop helped to create the
outline for "National Intelligent Transport System Architecture and Policy for Public
Transport (Bus)", which was submitted by ASRTU and SIAM to the government

In the 44th & 45th CMVR-TSC, Chairman had directed - standardization activities to be
initiated on Intelligent Transportation Systems (ITS) - Vehicle Location Tracking, Camera
Surveillance System and Emergency Request Button. The committee intended to extend the
above user requirements to all public transportation namely –buses, taxis, etc. The current
document covers the requirements for Vehicle Location Tracking and Emergency Button.
The other ITS components like PIS, CCTV system, Fare collection etc. are deliberated and
would be addressed in later phase and could be added as separate parts to the current
document..

Based on these directions, the AISC Panel on ITS has prepared this AIS-140
titled,"Intelligent Transportation Systems (ITS) - Requirements for Public Transport Vehicle
Operation". The panel also deliberated and identified the necessary elements for an effective
implementation of vehicle level ITS system.

For AIS-140 Devices, in India, connectivity to report location, and Emergency Panic Button
signal is though wireless cellular connectivity. There are device focused Cellular
Connectivity Offerings like 'eSIM4Things' available in India, which cater to connectivity
requirements of AIS-140 devices. eSIM4Things is fully compatible with all AIS-140 devices
and with a connectivity manager and a range of tariff plans.
Electric vehicle and Hybrid vehicle (xEV) industry
During April 2012, the Indian government planned to unveil the road map for the
development of domestic electric and hybrid vehicles (xEV) in the country. A discussion
between the various stakeholders, including Government, industry, and academia, was
expected to take place during 23–24 February. The final contours of the policy would have
been formed after this set of discussions. Ministries such as Petroleum, Finance, Road
Transport, and Power are involved in developing a broad framework for the sector. Along
with these ministries, auto industry executives, such as Anand Mahindra (Vice Chairman and
Managing Director, Mahindra & Mahindra) and Vikram Kirloskar (Vice-Chairman, Toyota
Kirloskar), were involved in this task. The Government has also proposed to set up a Rs 740
crore research and development fund for the sector in the 12th five-year plan during 2012–17.
The idea is to reduce the high cost of key imported components such as the battery and
electric motor, and to develop such capabilities locally. In the year 2017, An Amaravati,
Andhra Pradesh based Electric Vehicles manufacturing company called AVERA[168] New
& Renewable Energy started electric scooters manufacturing and are ready to launch their
two models of scooters by the end of December 2018.

Electric cars are seen as economical long-term investments, as one doesn't need to purchase
gas, but needs only to recharge the battery, using renewable energy sources. According to the
United States Department of Energy, electric cars produce half as much CO2 emissions as
compared to a gas-powered car. According to The Economic Times, 60% of Indian
customers expect fuel prices to go up in the next 12 months and 58% expect to buy a new car
in the same time frame. Most consumers are looking to buy a car which gives good mileage.
According to the same source, 68% of Asian drivers expect higher mileage from their cars
due to the higher fuel prices. This has encouraged 38% of Indian automobile consumers to
switch to electric or hybrid cars.[1 Due to this change in the market, many companies, such
as Toyota, have planned to introduce electric vehicles in India; and Suzuki has tested almost
50 electric prototypes in India already, according to Mashable.In 2019 Hyundai Launched
India's First Electric Car Kona Electric.

PRESENT SCENARIO OF AUTOMOBILES

India became the fourth largest auto market in 2019 with sales increasing 8.3% year o
year to 3.9 million units. Electric vehicles production and sales have been increased over the
time witnessing a growth by 20 % to reach 1.56 lakh units. The electric vehicles include e-
rickshaws and two wheelers majorly.
Automobile exports grew 14.50% in the year and overall export was increased by 3.9 %.
The Indian automobile industry has attracted Foreign Direct Investment (FDI) worth US
$23.89 billion during the period 2000 to 2020, according to data released by Department
Promotion of Industry and Internal Trade (DPIIT).