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Automobile
Automobile
Automobile
SECTOR IN INDIA
OUR TEAM
Utility
39.1%
Passenger
56.9%
Heavy
28.3%
Light
71.7%
JUSTIFICATION FOR THE SECTOR
Linkages with industries that affect its supply chain like capital equipment, steel, copper, lithium,
semicondustors, warehousing, glass
Along with linkages with industries that deals in finance, credit, insurance, logistics, petroleum, repair and
maintenance, and advertising
Due to linkages with such large number of industries it makes it more justifiable to analyse the dynamics of
the automobile industry
In 2023, India became the From April '21 to March '22, India is the largest tractor , 2nd
3rd largest automobile India produced 22.93 million largest bus, and the 3rd largest
market vehicles heavy truck manufacturer
OBJECTIVE OF THE ANALYSIS
Describe the evolution of the Study the pricing policy and
industry degree of competition
PHASE 1- 1943-1983
Several players emerged like Hindustan Motors, Premier, Chrysler Corporation, Mahindra and Mahindra, TATA
engineering and locomotive company (TATA motors), Ashok Leyland and Bajaj Auto dominated the two-
wheeler segment
Collective efforts of government and private players, Import substitution program was launched which
1950s
restricted import of fully built-up cars.
EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY
Tariff commission launched, allowing only licensed capacity of certain number of vehicles to be produce
1952 Main purpose: to exclude companies who only imported parts for assembly in India but with no India
partners. Pllayers like General Motors, Ford, Rootes group move out of India
The first Phase was identified as Government intervention through regulations which
were related to protection and indigenization of the industry
Little or no growth till 1980s. Government made policies to encourage the use of fuel-efficient
Early
1980s technologies and competitiveness in the car sector
Single most important policy regarding the TECHNOLOGY ACQUISITION was removed and the competitive
framework was introduced in the market when price controls were lifted
Resulted in relaxed entry requirements, allowed foreign equity partnerships, and allowed the importation of
machinery and technology
EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY
Known as the modernization programme and it altered the industry structure particularly automobile sector.
The major players during all these regulations was Hindustan motors and premier
PHASE 3 - 1991 - 2001 Liberalization of Indian economy as more restriction and laws were removed
After the liberation policy, major global players like Suzuki, Toyota, Hyundai, Maruti enter and explored the
1991 Indian market. All this changed the industry growth path
Also resulted in many foreign firms joint ventures with Indian companies.
Industry grew at 14.31% p.a. in 1991 as compared to 8.56% p.a. during 1856-1990
Auto national policy (first comprehensive policy for automotive industry in India) launched.
After Main feature - approval of foreign equity investment upto 100% in manufacturing of automobile and
2002
its components, promotion
EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY
The latest national auto policy suggests to adopt a long term plan to decide emission standard
2018
after BS-VI and get in line with the global benchmarks by 2028
PLI schemes introduced to promote India’s manufacturing capabilities and to develop automotive products
with a budget outlay of Rs. 25,938 crore (US$ 3.25 billion).
MEIS introduced through foreign trade policy of 2015-20, incentives provided like reduction in duties or taxes.
Under this scheme automobile manufacturers got an incentive of 2% on vehicle exports
National Automotive testing and R&D infrastructure established and since 2015 five testing and research
fascilities have been created around the nation with total cost outlay as $388.5 million
Vehicle scrappage policy introduced. All vehicles older than 15 years to pass a “fitness and emissions
April
test” to keep their registration
2002 State and Central government-owned vehicles including buses owned by transport corporations and
public sector undertakings that have been on the road for over 15 years to be scrapped
EVOLUTION OF INDIAN AUTOMOBILE INDUSTRY
FAME scheme I and II, electric vehicle subsidy is provided for electric two- wheelers, three wheelers, 4
wheelers along with electric buses and the scheme is extended till march 24, 2024
Government approved new PLI scheme of 25,938 cr. To boost manufacturing of electric and fuel cell
vehicles. The Indian government has also provided tax exemptions and subsidies to EV
manufacturers and consumers to promote the domestic electric vehicle industry
The Indian government has set a target to achieve 30 percent electrification of the country's
vehicle fleet by 2030
ANALYSIS OF MARKET STRUCTURE
Elastic price elasticity of demand due to
oligopolistic presence of large number of substitutes
KIA CORPORATION
Second largest: Hyundai Motor
6.6%
Company, 15% market share MARUTI SUZUK
40.7%
MAHINDRA AND MAHINDRA
Third largest: Tata Motors, subsidiary of
11%
Tata Group, 13.11% market share
High cost of of
Delays in production batteries like Lithium Less Liquidity in the
Ion and Nickel- metal market
hydride
Automotive Mission Plan 2016- TATA plans to increase Passenger car market to
26 targets a four-fold growth contribution of EV sales from reach a value of US$ 54.84
12% to 50% by 2030 billion by 2027