Automobile Industry in India has witnessed spectacular
growth in recent years. Read about the growth story of Indian Auto
sector.
Automobile Industry in India
Automobile Industry in India has witnessed a tremendous growth in
recent years and is all set to carry on the momentum in the foreseeable
future. Indian automobile industry has come a long way since the first
car ran on the streets of Bombay in 1898. Today, automobile sector in
India is one of the key sectors of the economy in terms of the
employment. Directly and indirectly it employs more than 10 million
people and if we add the number of people employed in the auto-component
and auto ancillary industry then the number goes even higher.
The automobile industry comprises of heavy vehicles (trucks, buses,
tempos, tractors); passenger cars; and two-wheelers. Heavy vehicles
section is dominated by Tata-Telco, Ashok Leyland, Eicher Motors,
Mahindra and Mahindra, and Bajaj. The major car manufacturers in India
are Hindustan Motors, Maruti Udyog, Fiat India Private Ltd., Ford India
Ltd., General Motors India Pvt. Ltd., Honda Siel Cars India Ltd.,
Hyundai Motors India Ltd., and Skoda India Private Ltd., Toyota Motors,
Tata Motors etc. The dominant players in the two-wheeler sector are Hero
Honda, Bajaj, TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd.,
Yamaha etc.
In the initial years after independence Indian automobile industry was
plagued by unfavourable government policies. All it had to offer in the
passenger car segment was a 1940s Morris model called the Ambassador and
a 1960s Suzuki-derived model called the Maruti 800. The automobile
sector in India underwent a metamorphosis as a result of the
liberalization policies initiated in the 1991. Measures such as
relaxation of the foreign exchange and equity regulations, reduction of
tariffs on imports, and refining the banking policies played a vital
role in turning around the Indian automobile industry. Until the mid
1990s, the Indian auto sector consisted of just a handful of local
companies. However, after the sector opened to foreign direct investment
in 1996, global majors moved in. Automobile industry in India also
received an unintended boost from stringent government auto emission
regulations over the past few years. This ensured that vehicles produced
in India conformed to the standards of the developed world.
Indian automobile industry has matured in last few years and offers
differentiated products for different segments of the society. It is
currently making inroads into the rural middle class market after its
inroads into the urban markets and rural rich. In the recent years
Indian automobile sector has witnessed a slew of investments. India is
on every major global automobile player's radar. Indian automobile
industry is also fast becoming an outsourcing hub for automobile
companies worldwide, as indicated by the zooming automobile exports from
the country. Today, Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have
set up their manufacturing bases in India. Due to rapid economic growth
and higher disposable income it is believed that the success story of
the Indian automobile industry is not going to end soon.
Some of the major characteristics of Indian automobile sector are:
- Second largest two-wheeler market in the world.
- Fourth largest commercial vehicle market in the world.
- 11th largest passenger car market in the world
- Expected to become the world's third largest automobile market by
2030, behind only China and the US.
Note: The above information was last updated
on 21-07-2007
