AUTOMOBILE

INDUSTRY IN INDIA
• The Automotive industry in India is one of the largest in the
world and one of the fastest growing globally.
• India manufactures over 11 million vehicles(including 2
wheeler and 4 wheeler) and exports about 1.5 million every
year.
• It is the world's second largest manufacturer of motorcycles,
with annual sales exceeding 8.5 million in 2009.
• India's passenger car and commercial vehicle manufacturing
industry is the seventh largest in the world, with an annual
production of more than 2.6 million units in 2009.In 2009,
India emerged as Asia's fourth largest exporter of passenger
cars, behind Japan, South Korea, and Thailand.
• As of 2009, India is home to 40 million passenger
vehicles and more than 2.6 million cars were sold in India
in 2009 (an increase of 26%), making the country the
second fastest growing automobile market in the world.

• According to the Society of Indian Automobile

Manufacturers, annual car sales are projected to increase
up to 5 million vehicles by 2015 and more than 9 million
by 2020.

• By 2050, the country is expected to top the world in car

volumes with approximately 611 million vehicles on the
nation's roads.
 History
• The first car ran on India's roads in 1897. Until the 1930s, cars
were imported directly, but in very small numbers.

• Embryonic automotive industry emerged in India in the 1940s.

• Mahindra & Mahindra was established by two brothers as a

trading company in 1945, and began assembly of Jeep CJ-3A
utility vehicles under license from Willys.

• The company soon branched out into the manufacture of light

commercial vehicles (LCVs) and agricultural tractors.
• Following the 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.
• However, the growth was relatively slow in the 1950s and
1960s due to nationalisation and the license raj which
hampered the Indian private sector.
• After 1970, the automotive industry started to grow, but the
growth was mainly driven by tractors, commercial vehicles
and scooters.
• Cars were still a major luxury. Japanese manufacturers entered
the Indian market ultimately leading to the establishment of
Maruti Udyog.
• A number of foreign firms initiated joint ventures with Indian
companies.
• In the 1980s, a number of Japanese manufacturers launched joint-
ventures for building motorcycles and light commercial-vehicles.
• It was at this time that the Indian government chose Suzuki for its
joint-venture to manufacture small cars.
• Following the economic liberalisation in 1991 and the gradual
weakening of the license raj, a number of Indian and multi-
national car companies launched operations.
• Since then, automotive component and automobile
manufacturing growth has accelerated to meet domestic and
export demands.
• Following economic liberalization in India in 1991, the Indian
automotive industry has demonstrated sustained growth as a
result of increased competitiveness and relaxed restrictions.
• Several Indian automobile manufacturers such as Tata Motors,
Maruti Suzuki and Mahindra and Mahindra, expanded their
domestic and international operations.
• India's robust economic growth led to the further expansion of its
domestic automobile market which has attracted significant India-
specific investment by multinational automobile manufacturers.

• In February 2009, monthly sales of passenger cars in India exceeded

100,000 units and has since grown rapidly to a record monthly high
of 182,992 units in October 2009.

• From 2003 to 2010, car sales in India have progressed at a CAGR of

13.7%, and with only 10% of Indian households owning a car in
2009 (whereas this figure reaches 80% in Switzerland for example )
this progression is unlikely to stop in the coming decade. Congestion
of Indian roads, more than market demand, will likely be the limiting
factor.

• SIAM is the apex industry body representing all the vehicle

manufacturers, home-grown and international, in India.
 Production statistics
Total Vehicles
Year Car Production  % Change Commercial  % Change  % Change
Prodn.

2009 2,166,238 17.34 466,456 -4.08 2,632,694 11.40

2008 1,846,051 7.74 486,277 -9.99 2,332,328 3.35

2007 1,713,479 16.33 540,250 -1.20 2,253,999 10.39

2006 1,473,000 16.53 546,808 50.74 2,019,808 19.36

2005 1,264,000 7.27 362, 755 9.00 1,628,755 7.22

2004 1,178,354 29.78 332,803 31.25 1,511,157 23.13

2003 907,968 28.98 253,555 32.86 1,161,523 22.96

2002 703,948 7.55 190,848 19.24 894796 8.96

2001 654,557 26.37 160,054 -43.52 814611 1.62

2000 517,957 -2.85 283,403 -0.58 801360 -2.10

1999 533,149 285,044 818193

The production of automobiles has greatly increased in the last decade.

It passed the 1 million mark during 2003-2004 and has more than doubled since.
 Per-liberalization period (1947–1991)

• The idea of liberalization never exist.

• Their was no well developed industry
• The development was more concentrated in
public sectors.
 Post-liberalization period (since 1991)

• The government led by Morarji Desai eased

restrictions on capacity expansion for
companies, removed price controls, reduced
corporate taxes and promoted the creation of
small scale industries in large numbers.
• In response, Prime Minister Narasimha Rao,
along with his finance minister Manmohan
Singh, initiated the economic liberalisation of
1991.
 GOVT POLICY
• In the first section we have given the Auto Policies of Government
of India to facilitate sustainable development of Indian Automobile
industry.
• In the second section we have given the current rates of major
duties and taxes applicable to vehicles in India.
• The same rate is applicable to imported vehicles in the form of
Counter Veiling Duty (CVD). Custom Duty is essentially an import
duty applicable on all imports.
• VAT has recently replaced Local Sales Tax in India.
• Prior to the mid 1990's, the Indian automobile sector
comprised of indigenous companies. The automobile market
in India was however, opened up to foreign investors in 1996.
 Contribution towards GDP
• India ranks 2nd in the global two-wheeler market
• India is the 4th biggest commercial vehicle market in the
world
• India ranks 11th in the international passenger car market
• India ranks 5th pertaining to the number of bus and truck
sold in the world
• It is expected that the Automobile Industry in India would
be the 7th largest automobile market within the year 2016
• In the year 2006-07 the number of Passenger Car sold were 10,76,408
• In the year 2006-07 the number of Passenger Vehicles sold were 13,79,698
• In the year 2006-07 the number of Commercial Vehicles sold were 4,67,882
• In the year 2006-07 the number of Three Wheelers sold were 4,03,909
• In the year 2006-07 the number of Two Wheelers sold were 78,57,548
• In the year 2006-07 the number of automobile sold were 1,01,09,037
• Role of Automobile Industry in India GDP-Growth
• The growth rate of the Passenger Cars in the year 2007 is 13.50%
• The growth rate of the Utility Vehicles in the year 2007 is 10.10%
• The growth rate of the Multi Purpose Vehicles in the year 2007 is 24.40%
• The growth rate of the Light Commercial Vehicles in the year 2007 is 16.05%
• The growth rate of the Commercial Vehicles in the year 2007 is 3.43%
 Employment opportunities
• The Huge growth of Automobile Industry led to
employment opportunity.

• India today is well known as a potential emerging

automobile market and jobs in the automobile
industry are rising.

• Candidates with bachelor's degree in mechanical,

electrical or automobile engineering are eligible to get
good job opportunities in automobile companies.
 Exports
• India's automobile exports have grown consistently and
reached $4.5 billion in 2009, with United Kingdom
being India's largest export market followed by Italy,
Germany, Netherlands and South Africa. India's
automobile exports are expected to cross $12 billion by
2014.

• In 2008, Hyundai Motors alone exported 240,000 cars

made in India. Nissan Motors plans to export 250,000
vehicles manufactured in its India plant by 2011.

• Similarly, General Motors announced its plans to export

about 50,000 cars manufactured in India by 2011.
• In September 2009, Ford Motors announced its plans to setup
a plant in India with an annual capacity of 250,000 cars for
US$500 million.
• The cars will be manufactured both for the Indian market and
for export.
• Fiat Motors also announced that it would source more than
US$1 billion worth auto components from India.

• In July 2010, The Economic Times reported that PSA Peugeot

Citroen was planning to re-enter the Indian market and open a
production plant in Andhra Pradesh with an annual capacity of
100,000 vehicles, investing EUR 700M in the operation.
• PSA's intention to utilize this production facility for export
purposes however remains unclear as of December 2010.
• 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) by allowing foreign carmakers
100% ownership of factories in India, which China does not
allow.

• 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 shipments to its parent Suzuki, Maruti Suzuki also

manufactures small cars for Nissan, which sells them in
Europe.
• Tata Motors exports its passenger vehicles to Asian and
African markets, and is in preparation to launch electric
vehicles in Europe in 2010.

• The firm is also planning to launch an electric version of its

low-cost car Nano in Europe and 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 the 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.
 SWOT Analysis

Weakness
Strength • slow in production.
• Increases Productivity. • No huge
• Creates new economic investments.
opportunities

Opportunity Threat
• Ability to expand to • Pollution may
other markets. concern people.
• Inflation will increase
costs.
 Indian automotive companies
• Chinkara Motors: Beachster, Hammer, Roadster 1.8S, Rockster,
Jeepster, Sailster

• Hindustan Motors: Ambassador

• ICML: Rhino Rx

• Mahindra: Major, Xylo, Scorpio, Bolero, Thar, Genio

• Premier Automobiles Limited: Sigma, RiO

• San Motors: Storm

• Tata Motors: Nano, Indica, Indica Vista, Indigo, Indigo Manza,

 Foreign automotive companies in India
Vehicles manufactured or assembled in India

• BMW India: 1 Series, 3 Series, 5 Series, X1.

• Fiat India (in collaboration with Tata Motors): Grande Punto,
Linea, Palio Stile.
• Ford India: Ford Figo, Ikon, Fiesta, Endeavour.
• General Motors India
• Chevrolet (CSPIL): Spark, Beat, Aveo U-VA, Aveo, Optra,
Cruze, Tavera.
• Honda Siel: Jazz, City, Civic, Accord.
• Hyundai Motor India: Santro, i10, i20, Accent, Verna
Transform, Sonata Transform.
• Mahindra Renault: Logan

• Mercedes-Benz India: C-Class, E-Class.

• Mitsubishi (in collaboration with Hindustan Motors):Lancer,

Lancer Cedia, Pajero

• Nissan Motor India: Micra.

• Toyota Kirloskar: Etios, Corolla, Innova, Camry.

• Volkswagen India: Polo, Vento, Jetta, Passat.

• Audi India: A4, A6.

• Škoda Auto India: Fabia, Octavia, Laura, Superb, Yeti.

Thank you

SHARAT.E