IndiaBizClub Login

x Register Free
x Register Free

automobiles


Indian Automobile Industry
Over a period of more than two decades the Indian Automobile Industry has been driving its own growth through phases. The entry of Suzuki Corporation in Indian passenger car manufacturing is often pointed as the first sign of India turning to a market economy. Since then the automobile sector witnessed rapid growth year after year. By late-90's the industry reached self reliance in engine and component manufacturing from the status of large scale importer.

With comparatively higher rate of economic growth rate index against that of great global powers, India has become a hub of domestic and exports business.

The automobile sector has been contributing its share to the shining economic performance of India in the recent years. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport.

The data obtained from Ministry of Commerce and Industry, shows high growth obtained since 2001-02 in automobile production continuing in the first three quarters of the 2004-05. Annual growth was 16.0 per cent in April-December, 2004; the growth rate in 2003-04 was 15.1 per cent The automobile industry grew at a compound annual growth rate (CAGR) of 22 per cent between 1992 and 1997.

With investment exceeding Rs. 50,000 crore, the turnover of the automobile industry exceeded Rs. 59,518 crore in 2002-03. Including turnover of the auto-component sector, the automotive industry's turnover, which was above Rs. 84,000 crore in 2002-03, is estimated to have exceeded Rs.1,00,000 crore ( USD 22. 74 billion) in 2003-04.

Automobile Dealers Network in India
In terms of Car dealer networks and authorized service stations, Maruti leads the pack with Dealer networks and workshops across the country. The other leading automobile manufacturers are also trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the customers in the form of reduced interest rates.

Major Manufacturers in Automobile Industry
  •     Maruti Udyog Ltd.
  •     General Motors India
  •     Ford India Ltd.
  •     Eicher Motors
  •     Bajaj Auto
  •     Daewoo Motors India
  •     Hero Motors
  •     Hindustan Motors
  •     Hyundai Motor India Ltd.
  •     Royal Enfield Motors
  •     Telco
  •     TVS Motors
  •     DC Designs
  •     Swaraj Mazda Ltd
Government has liberalized the norms for foreign investment and import of technology and that appears to have benefited the automobile sector. The production of total vehicles increased from 4.2 million in 1998-99 to 7.3 million in 2003-04. It is likely that the production of such vehicles will exceed 10 million in the next couple of years.

The industry has adopted the global standards and this was manifested in the increasing exports of the sector. After a temporary slump during 1998-99 and 1999-00, such exports registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two and- a-half times the export figure for 2001-02.    
Automobile Export Numbers

Category  

1998-99 

2004-05 (Apr-Dec)
Passenger Car        

25468 121478
Multi Utility Vehicles       

2654   

3892
Commercial Vehicles  

10108 19931
Two Wheelers      100002 256765
Three Wheelers 21138 51535
Percentage Growth   

-16.6 32.8

The Key Factors Behind This Upswing     
Sales incentives, introduction of new models as well as variants coupled with easy availability of low cost finance with comfortable repayment options continued to drive demand and sales of automobiles during the first two quarters of the current year. The risk of an increase in the interest rates, the impact of delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the industry.

As the players continue to introduce new models and variants, the competition may intensify further. The ability of the players to contain costs and focus on exports will be critical for the performance of their respective companies.

The auto component sector has also posted significant growth of 20% in 2003-04, to achieve a sales turnover of Rs.30,640 crore (US$ 6.7 billion). Further, there is a potential for higher growth due to outsourcing activities by global automobiles giants. Today, this sector has emerged as another sunrise sector.

Even Growth
Opposing the belief that the growth in automobile industry has catered only to the top income-stratum of society, Growth of exports of 32.8 % in the first three quarters of 2004-05, the fastest growth in volumes has come from commercial vehicles as against passenger cars.

Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8 times compared to the 2.2 times increase in passenger cars. Furthermore, two-wheeler output continues to dominate the volume statistics of the sector. In 2003-04, for every passenger car turned out by the sector, there were 7 two-wheelers produced. In the two wheeler segment, there is a greater preference for motorcycles followed by scooters, with both production and domestic sales of motorcycles increasing at faster rates than for scooters in the current and previous years. However, mopeds have registered low or negative growth. Export growth rates have been high both for motorcycles and scooters.

Grow your Business Online by Registering here FREE

Register Free


Business Blog About Us Support Contact Sitemap Privacy Policy Terms & Conditions

© Copyright 2000 - 2017 IndiaBizClub. All rights reserved.