Indian Automotive Industry- The sector that is creating waves globally !

ndian Auto Industry was nothing to write about just a few years back. However, there has been tremendous growth and positive change in Indian Auto sector. So much so that India is rapidly becoming a large player in exporting of 2, 3 and 4 wheelers across the globe. The Auto Industry export is rising at more than 50% year on year. I would not be surprised if few years down the line, Tata Motors name is taken along side giants like Toyota and Honda. what with Tata motors already creating a ripple worldwide with its sub $2500 (approx 1 lac) car. If Tata is successful, which very much looks a possibility now, it will have most of the countries across the globe running behind asking for more. Just imagine the size of the market, if consumer is able to buy a nice car at $2500.

Just to give you a perspective of how Indian Auto Industry has performed in last couple of years, here are some facts:

At present there are 15 manufacturers of passenger cars, 9 manufacturers of commercial vehicles, 14 of 2/3 wheelers and 14 of tractors besides 5 manufacturers of engines. The industry has an investment of more than Rs.50,000 crore in 2002-03 which is slated to go up to Rs. 80,000 crore by this year end. The Indian automotive industry has already attained a turnover of Rs.1,65,000 crore ($34 billion USD). The contribution of the automotive industry to GDP has risen from 2.77% in 1992- 93 to 5% in 2005-06. The auto companies have a manufacturing capacity of over 95 vehicles per annum.

India is the world’s second largest manufacturer of two wheelers, fifth largest manufacturer of commercial vehicles,manufactures largest number of tractors in the world and is the fourth largest passenger car market in Asia.

One of the reasons of growth in this Industry is also because of friendly policies laid down by government of India. At present 100% Foreign Direct Investment (FDI) is permissible in this sector including passenger car segment. In last three years alone, 14 car manufacturers have setup their shops in India.

Here is the Vision statement for Indian Automotive sector by Indian government.

To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.

Source:Track.in

Facts & Figures..(c0ntd)

The automobile industry in India offers significant employment opportunities. The automobile industry including component industry employs 0.45 million people directly and around 10 million people indirectly.

The auto industry recorded a turnover of US$ 10 billion while the auto-component industry recorded a turnover of US$ 2.7 billion in 1999-2000.

• Many international auto majors entered the country post liberalisation in 1991.

• India’s largest car-maker Maruti Udyog Ltd (MUL) was recently privatised with Suzuki Motor Corporation moving into the driving seat after acquiring a majority stake and management control in the Maruti Suzuki joint venture in early 2002.

Facts & Figures..

Hyderabad, the Hi-Tech City, is going to come up with the first automobile mall of the country by the second half of 2008. It would be set up by city-based Prajay Engineers Syndicate in area of more than 35 acres.

The first auto vehicle rolled out in India at the end of 19th century. Today, India is the the 2nd largest tractor and 5th largest commercial vehicle manufacturer in the world. Hero Honda with 1.7M motorcycles a year is now the largest motorcycle manufacturer in the world.

The passenger car and motorcycle segment in Indian auto market is growing by 8-9 per cent. The two-wheeler segment will clock 11.5% rise by 2007. Commercial vehicle to grow by 5.2 per cent.

India is the 11th largest Passenger Cars producing countries in the world and 4th largest in Heavy Trucks. Maruti Udyog Ltd. is the leading 4-wheelers manufacturer. Hero Honda is the leading 2-wheelers manufacturer.

Hero Honda is the largest manufacturer of motorcycles. Hyundai Motors India is the second largest player in passenger car market. Tata Motors is the fifth largest medium & heavy commercial vehicle manufacturer in the world.

According to the research every fifth car sold in India is Alto.