INTRODUCTION ON AUTOMOBILE

AND ENGINEERING
• One of India's largest and fastest growing
manufacturing sectors
• Ranked the 11th largest passenger car
producer in the world.
• India’s rank
– Motorcycles 1st

– Scooters 2nd
• Domestic automobile industry currently
employs about 250,000 people.
 EEPC INDIA (ENGINEERING EXPORT
PROMOTION COUNCIL)
• EEPC INDIA (Formerly Engineering Export Promotion
Council) was set up in 1955 under the sponsorship of
Ministry of Commerce & Industry, Govt. of India, for export
promotion of engineering goods, projects and services from
India.
• Initially started with a few hundreds of engineering units as
a small outfit, with a passage of time it has grown to be the
largest Export Promotion Council having membership of
nearly 12,000 from amongst large Corporate Houses, Star
Trading Houses, Small & Medium Scale Units (SME),
Trading Houses, etc.
• Out of the total membership of the Council, 60%
constitutes the SMEs.
 Cont…
• Engineering exports from India has
been steadily growing and the
performance has probably exceeded
all expectations ever since the birth
of the Council.
• Apart from being one of the largest
stakeholders in the total exports out
of India, the engineering exporters
are the foremost net foreign
exchange earner in the country.
• As the engineering sector is
extremely diversified, the Council
has set up different Product Panels
with a view to ensure that all
possible & potential Indian products
reach out to the global markets.
 THE FOLLOWING PANELS ARE IN
PLACE AS OF 23RD JANUARY 2010
S. no  Panels
1 Engineering Process Outsourcing (EPO)
2 Industrial Machinery for manufacture of Paper, Cement, Chemicals including Pressure
Vessels, Boilers and Heat Exchangers and textile mill machinery & accessories incl. all types of
knitting machines.

3 Food Processing Machinery, Sugar Mill Machinery including Pharmaceutical Machinery. (This
will include Oil, Tea, Coffee, Flour, Dal, Rice and Canning Mill Machinery and Dairy
Equipments and Animal Drawn Sugarcane Crushers).

4 Agricultural Machinery - Field Equipments including Agricultural Tractors and Trailers, Spare
Parts and Agricultural Implements, Tools, Irrigation Equipments such as Sprinklers etc.

5 Industrial Machinery – Others including Heating, Cooling and other Air-conditioning

Equipments.
 Cont….
6 Motor Vehicles excluding Two Wheelers and Three Wheelers (This will include
Heavy Duty Trucks, Jeeps, Chassis, Bus Bodies, Ambulances, Cars etc.).

7 Automobile Components, Spare Parts, Accessories including Storage Battery for

Automobile Application and Auto Servicing Garage Equipments.

8 Bicycles, Bicycle Components and Accessories. (This will also include Tricycles
and parts thereof).
9 Internal Combustion Engines, Compressors and parts thereof.
10 Electric Power Machinery, Switchgear and Controlgear including Cable,
Conductors, Cable/Conductor Accessories and Industrial Storage Batteries (This
will also include Electric Generators, Power and Distribution Transformers,
Electric Motors, Telephone Cables and ACSR).
 Domestic Automobile Market
• The passenger car transactions
As per statistics in domestic market have surged
to 145,905 units in January 2010
launched by against the 2009 sales of
SOCIETY OF 110,300 units.
• This indirectly refers to the
INDIAN 32.28% growth in the domestic
AUTOMOBILE car sales.
• In January 2010, the total sales
MANUFACTURERS of automobiles grew to
(SIAM) 1,114,156 units as compared to
the previous fiscal year's
768,698 units sales.
SEGMENTS OF INDIAN AUTOMOBILE
MARKET
• Two-wheeler automobile segment
The chief players in this segment is Hero Honda which delivers
50% motorbikes to the Indian market besides sharing 46% in
scooter market and TVS for 82% in moped market.
• Three-wheeler automobile segment
In this segment Piaggio and Bajaj are the leading players with
40% and 68% of market share respectively.
• Car segment
The chief domestic players in this segment are Maruti Suzuki ,
Mahindra and Tata Motors.
 COMPETITION IN INDIA
• Many tie-ups of global players with dominant local players
• Since the 1980s, Local car manufacturer Maruti Udyog Ltd (MUL) has
virtually dominated the Indian automotive market in the passenger
segments
• Since then, there has also been an emergence of new competition for
higher value segments of the passenger car market.
• Hence, local players like MUL also began to face competition from new
foreign car makers.
• Ford entered the mid-range market with the Ikon model in April 1998, a
move which was followed by Honda, Mitsubishi, Hyundai, and Daewoo.
• Other players, Hyundai and Daewoo, have since improved their share of
the passenger car market with new models
As per a recent research conducted by DELOITTE,
2020 will witness the emergence of at least one
Indian auto firm that would not only feature among
the best six car manufacturers but would also
dominate the international auto sector.
 PRODUCTION CENTERS OF
AUTOMOBILES AND SPARES IN INDIA
• Ford motors
Ford has invested heavily in India, with a Rs. 1700 crore integrated
manufacturing plant at Maraimalai Nagar, equipped with state-of-the-art Ford
technology and employing 1,000 people. Models include Ikon, Mondeo and
Endeavour.
• Hyundai Motor
Hyundai Motor Company, Korea, has constructed its largest overseas
manufacturing plant in Irrungattukatoi near Chennai. This plant is capable of
producing 1,20,000 cars, 1,30,000 engine and transmission systems annually.
• Tata Motors
Jamshedpur, Sanand, Pune, Uttarakhand, Lucknow
• Maruti Suzuki
The company that started off with its lone plant at Gurgaon (Haryana),
Manesar
 MAJOR EXPORTS DESTINATIONS FROM
INDIA AND EXPORTS IN LAST 3 YEARS

According to a India has managed to

new report by the emerge as the seventh-
industry body
FEDERATION OF largest automobile
INDIAN manufacturer in the world,
CHAMBERS OF its share in the global auto
COMMERCE AND
INDUSTRY (FICCI). exports market is restricted
to just one per cent,
"The share of India in global automobile exports was small i.e. one
per cent in 2009 and it ranks 22nd in automobile exports, falling
behind countries like Thailand, China, Mexico, Argentina, Brazil
and Turkey,"
 PROVISION OF AUTOMOBILE AND
ENGINEERING IN FTP
• CHAPTER 2.33
Export of Spares Warranty spares, whether indigenous or imported, of plant, equipment,
machinery, automobiles or any other goods, except those restricted under ITC (HS), may be
exported along with the main equipment or subsequently but within the contracted
warranty period of such goods subject to approval of RBI.
 

• CHAPTER 3.6.4.5
Imports allowed Duty credit scrip may be used for import of any capital goods including
spares, office equipment and professional equipment, office furniture and consumables; that
are otherwise freely importable under ITC (HS) Classification of Export and Import items. The
imports shall relate to any service sector business of the applicant. Utilization of duty credit
earned under the scheme shall not be permitted for payment of duty in case of import of
vehicles, even if such vehicles are freely importable under ITC (HS).
 
 Cont…
• To accelerate exports and encourage technological
upgradation, additional Duty Credit Scrips shall be given to
Status Holders @ 1% of the FOB value of past exports.
• The duty credit scrips can be used for procurement of
capital goods with Actual User condition. This facility shall
be available for sectors of leather (excluding finished
leather), textiles and jute, handicrafts, ENGINEERING
(excluding Iron & steel & non-ferrous metals in primary and
intermediate form, AUTOMOBILES & TWO WHEELERS,
nuclear reactors & parts, and ships, boats and floating
structures), plastics and basic chemicals (excluding pharma
products) [subject to exclusions of current beneficiaries
under Technological Upgradation Fund Schemes (TUFS)].
 QUALITY STANDARDS
Automotive Quality Standards to Automate Quality System
Processes

ISO / TS 16949 / QS 9000

TS 16949 is specially meant for the automobile industry and

has been developed by ISO
Adopting this standard help automobile companies all over
the world to do business with foreign companies.
 CHALLENGES FACED BY EXPORTERS
• The auto component industry was growing gradually and was making significant
developments in domestic as well as in international market till 2006-07.
• The internal barriers in the country and constraints at international level had sluggish
down the industry growth, these barriers predominantly are hindrances like – Tax
structure especially the disparity in custom and excise duties on the raw material of
auto components, and automobiles.
• The unavailability of resources at reasonable cost for example- Power, Skilled Labour,
Technology etc is also a major constraint.
• The challenges are mainly to overcome with these hindrances and sustain into
international competition with other low cost countries.
• Adding up the extra values to the products and seeking government active participation
in the meager resources may help to break the barriers.
• The active participation is also needed in making the goods cost effective by
considering various parameters like providing extended help to bring overall sector
under organized platform, liberalized policies, SEZ assistance and marketing assistance.
 SWOT
STRENGTHS
1. Cost competitiveness in terms of Labour
and Raw material
2. Established manufacturing base
3. Qualified and skilled man power
4. Growing domestic automotive industry
5. Manufacturing capabilities with
international quality standards
6. High operational efficiency
OPPORTUNITIES
1. The growing need to outsource
2. Higher frequency of introducing of newer
models by automakers
3. Global market opportunity itself is the
ultimate opportunity provided by auto
industry.
4. Leverage on product engineering expertise
to improve the worthiness and exports of
auto component.
WEAKNESSES
1. Low investment in Research and
Development
2. Limited knowledge of product liability and
offshore warranty handling
3. Limited domestic market for various
components inhibiting capacity creations.
4. Comparatively poor infrastructure for
supply chain and exports
5. Lack of experience in system integration
THREATS
1. Competition from other low cost countries
like China, Taiwan, Thailand etc.
2. Free Trade Agreements / Preferential Trade
Agreements ( FTA’s) are major exporting
countries to western Europe.
3. Developments of new technologies like fuel
cell, hydrogen powered vehicles, which may
affect the auto component industry.
4. Large number of