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Evolution of Indian Automobile Industry

The dawn of automobile in India actually goes back to 4000 BC when wheel was first used for movement in India in form of chariots. Since then it has traveled a long way, from chariots to bullock cart, to the jet-age.
In 1898 that the first motorcar rode down Indias roads in Mumbai. Then for the next many years, cars were imported to satisfy domestic demand. Till the First World War, about 4,000 cars were directly imported to India from foreign manufacturers (Auto India Mart 2007). Assembly plants in Mumbai, Calcutta and Chennai were setup between 1910 and 1920 . The import/assembly of vehicles grew consistently after the 1920s, crossing the 30,000 mark in 1930 (India Infoline 2007).

The Hindustan Motors (HM) was set up in 1942 and in 1944 However, it was PAL who produced the first car in India in 1946 by assembling as HM concentrated on auto components and could produce their first car only in 49. After a short period of time, it was another company, Mahindra and Mahindra, which manufactured sturdier utility vehicles, namely the American Jeep.

Since the 1980s, the Indian car industry has seen a major resurgence with the opening up of Indian shores to foreign manufacturers and collaborators.

Table 1: Decadal Growth of Indian Automobile Industry


Years Production

Number

Growth (%)

1960-61

41535

1970-71

181752

337.59

1980-81

625143

243.95

1990-91

2797241

347.46

2000-01

5497416

96.53

2006-07

11065142

101.28

Source: SIAM 2007

Figure :Trend of Production in Indian Automobile Industry

Current Status of the Indian Automobile Industry:


Industry performance in 2011-12

Production: The cumulative production data for April-March 2011 shows production growth of 13.83 percent over same period last year. In March 2012 as compared to March 2011, production grew at a rate of 6.83 percent. In 2011-12, the industry produced 20,366,432 vehicles of which share of passenger vehicles were 15 percent.

Domestic Sales:

Passenger Vehicles segment grew at 4.66 percent during April-March 2012 over same period last year. Passenger Cars grew by 2.19 percent.
In March 2012, domestic sales of Passenger Cars grew by 19.66 percent over the same month last year. Also, sales growth of total passenger vehicle in the month of March 2012 was at 20.59 percent (as compared to March 2011).

Exports: Passenger Vehicles registered growth at 14.18 percent in this period.

Production data

Market share of automobile companies in India 2013


Cars & Utility Vehicles (produced more than 3.2

Million)

Automotive Companies in India


Major Indian Companies Major Multi-national companies

Geographical Distribution
Its based around 3 clusters In southern cluster, Chennai is the biggest with 35% of

the revenue share. From northern cluster, Gurgaon and Manesar is there which has countrys largest manufacturer , Maruti Suzuki. The western hub near Mumbai and Pune contributes to 33% of the market.

Turnover of Industry

INDUSTRY CHARACTERISTICS
India as an emerging market
Low labour costs India produced 3.7 million vehicles in 2010 2nd largest after China According to SIAM, annual vehicle sales are projected

to increase to 4 million by 2015

EXPORTS
PASSENGER VEHICLES (UNITS) 600,000 500,000 400,000 300,000 200,000 100,000 0 2007- 2008- 2009- 2010- 2011- 201208 09 10 11 12 13 PASSENGER VEHICLES (UNITS)

Adaptation of international standards

TECHNOLOGY
Changes in Engine Technology Multi Point Fuel Injection (MPFI) Sticks to stricter auto emission norms Provides great mileage Common Rail Direct Injection (CRDI) 25% more power than the normal direct injection engine Provides soundless pick-up with mileage of about 24 kilometers to one litre of diesel

Changes in Vehicle Technology

Autopilot Cars

Driverless cars or autonomous vehicle or autodrive cars are intelligent vehicles which drive themselves Vehicles navigate the roads themselves Improvement in Suspension Technology

RAW MATERIALS
Overall automotive components sector is highly fragmented
Thailand has come as a major sourcing country for brakes, clutches and some basic components Japan, USA, Germany, UK, Korea Rep are other important sourcing countries Highest import is observed in body parts and safety component category

COMPETITIVE ANALYSIS
Competitive advantage over the world Firm strategy and structure: Large no. of domestic as well as multinational players Factor conditions: Cheaper and skilled workforce Large low-cost production bases Investments for capacity expansion and R&D etc.

Government: Liberalized policy regime Custom duty on raw materials reduced from 20 percent to 15

PERFORMANCE
Report by SIAM shows
Production growth of 13.83 percent (April 2012) Industry produced 20,366,432 vehicles of which

share of passenger vehicles is 15 percent Passenger Vehicles registered growth at 14.18 percent in this period

OPPORTUNITY AND RISK


Electric cars are soon to occupy large share of market
According to Information Handling Services (IHS), Automotive India will become the third largest market in the world by 2016 ahead of Japan, Germany and Brazil

Although the economic growth vulnerability and lower sentiment resulted in market slowdown in 2012 and 2013
India is expected to regain strong growth trend from 2014 onwards Advances in exhaust emission systems are improving air quality and reducing harm to the environment

GROWTH POTENTIAL AND STRUCTURE


Passenger vehicles production is expected to reach 10 million units by 202021
Seventh largest in the world annually producing 17.5 million vehicles, out of which approximately 2.3 million are exported Cummulative (FDI) inflows into the Indian automobile industry during April 2000 to October 2013 was recorded at US$ 9,079 million

CAREER OPPORTUNITIES
For the last century, the car culture has spread over the entire globe In Europe , the automotive industry accounts for roughly 12 million jobs (including related jobs)

In the US, more than 8 million and in Japan, more than 5 million
Increasing demand for skilled professionals in the

domain of effective service delivery, spares management and support functions

References
www.wikipedia.org www.siamindia.com www.economywatch.com www.business-standard.com The Economic Times www.automobileindia.com