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Commercial Vehicles
Three Wheelers
Two Wheelers
77
Source: SIAM
Source: SIAM
CLASSIFICATION OF INDIAN AUTOMOBILE INDUSTRY
The Federal Highway Administration (FHWA) has made the classification of automobiles in to 12 categories
based on the number of axles, axle trailers and tyres as below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Motor Cycles
Passenger Cars
Pickups, Panels & Vans
Buses
Single Unit 2 Axle Trucks
Single Unit 3 Axle Trucks
Single Unit 4 or more Axle Trucks
Single Trailer 3 or 4 Axle Trucks
Single Trailer 5 Axle Trucks
Single Trailer 6 or more Axle Trucks
Multi Trailer 5 or less Axle Trucks
Multi Trailer 6 Axle Trucks
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wheeler industry in the country has been able to witness a proliferation of brands with introduction of new
technology as well as increase in number of players. Aggressive marketing by the auto finance companies have
also played a significant role in boosting automobile demand, especially from the population in the middle
income group.
Production
According to Society for India Automobile Manufactures (SIAM) report, the industry produced a total
2,227,140 vehicles including passenger vehicles, commercial vehicles, three wheelers and two wheelers in
September 2014 as against 1,818,753 in September 2013, registering a growth of 22.45 percent over the same
month last year. The two-wheeler sector had driven a double digit growth.
Domestic Sales
As per the data released by Society for India Automobile Manufactures (SIAM), the sales of Passenger Vehicles
grew by 4.25 percent in April-September 2014 over the same period last year. Within the Passenger Vehicles
segment, Passenger Cars and Utility Vehicles grew by 4.09 percent and 12.17 percent respectively, while Vans
declined by (-) 13.35 percent in April-September 2014 over the same period last year.
The overall Commercial Vehicles segment registered a de-growth of (-) 10.14 percent in April-September 2014
as compared to same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) registered negative
growth at (-) 1.22 percent and Light Commercial Vehicles also dropped by (-) 14.39 percent.
Three Wheelers sales grew by 17.80 percent in April-September 2014 over the same period last year. Passenger
Carriers and Goods Carriers grew by 19.40 percent and 10.49 percent respectively in April-September 2014
over April-September 2013.
Two Wheelers sales registered growth of 16.41 percent in April-September 2014 over April-September 2013.
Within the Two Wheelers segment, Scooters, Motorcycles and Mopeds grew by 32.11 percent, 11.65 percent
and 10.21 percent respectively in April-September 2014 over April-September 2013.
Automobile Domestic Sales Trends (No. of Vehicles)
Category
Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers
Grand Total
2007-08
2008-09
1,549,882 1,552,703
490,494
384,194
364,781
349,727
7,249,278 7,437,619
9,654,435 9,724,243
2009-10
1,951,333
532,721
440,392
9,370,951
12,295,397
2010-11
2,501,542
684,905
526,024
11,768,910
15,481,381
2011-12
2,618,072
809,532
513,251
13,435,769
17,376,624
2012-13
2,686,429
793,150
538,291
13,797,748
17,815,618
Source: SIAM
Source: SIAM
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Exports
The report by Society for India Automobile Manufactures (SIAM) states that in April-September 2014, overall
automobile exports grew by 19.99 percent over the same period last year. Commercial Vehicles, Three
Wheelers and Two Wheelers grew by 15.55 percent, 13.27 percent, 27.84 percent respectively while passenger
vehicles declined marginally by (-) 0.93 percent during April-September 2014 over the same period last year.
Export Growth during Apr-Sep 2014
Passenger Vehicles
(-) 0.93
Commercial Vehicles
15.55
Three Wheelers
13.27
Two Wheelers
27.84
*Growth in export during April-September 2014 over the corresponding period in the previous year. (Source:
SIAM)
FOREIGN INVESTMENT
As per the data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce,
Government of India, the cumulative FDI inflows into the Indian automobile industry during April 2000 to
October 2013 was noted to be US$ 9,079 million, which amounted to 4% of the total FDI inflows in terms of
US $. Austria based motorcycle manufacturer KTM, the established makers of Harley Davidson from the US
and Mahindra & Mahindra have set up manufacturing bases in India. Furthermore, according to internal
projections by Mercedes Benz Cars, India is set to become Mercedes Benzs fastest-growing market worldwide
ahead of China, the US and Europe.
RECENT TRENDS IN AUTOMOBILE SECTOR
The luxury car market has observed a robust double-digit hike during the year 2013-2014, as a result of
rewarding new launches at compelling lower price points.
Further, with the measured increases in the price of diesel, the overall market continues to shift towards
petrol-fuelled cars.
This has lead to the growth in sales of the 'Mini' segment of the passenger vehicle market by of 5.5%.
The demand for Automatic transmission vehicles has prompted the manufacturers to produce cars with
Auto Gear Shift technology in almost all segments from mini cars to LUVs and also in both petrol and
diesel variants.
The Antilock Breaking System (ABS) which was a major technological revolution in recent years for the
passenger car industry is to be applied in two-wheelers also.
EMPLOYMENT OPPORTUNITIES
According to the Confederation of Indian Industry, the automobile sector currently employs over 80 lac people.
An extension in production in the automobile industry is forecasted, it is likely to rise to Rs. 600000 crore by
2016. This would also provide further employment to over 25 million people by 2016 making the automobile
the sunrise sector of the economy.
There are a wide range of jobs available in the automobile industry. With the number of vehicles available on
the road today, the need and requirement for people who can fix these machines is fast increasing. Careers like
automobile technician, car or bike mechanics are a great option. Becoming a diesel mechanic is also a
significant alternative. Diesel mechanics are responsible for repairing and servicing diesel engines. As they are
also required to repair engines of trucks and buses, other than cars, they are provided with hefty wages. If
communication with people instead of repairing cars is what interests you, then you have the opportunity of
becoming a salesperson or sales manager in an automobile company. Career opportunities in automobile design,
paint specialists, job on the assembly line and insurance of vehicles is also available.
PROBLEMS IN AUTOMOBILE SECTOR
However, the year 2013-2014 has seen a decline in the industrys otherwise smooth-running growth. High
inflation, soaring interest rates, low consumer sentiment and rising fuel prices along with economic slowdown
are the major reason for the downturn of the industry.
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Except for the two-wheelers, all other segments in the industry have been weakening. There is a negative
impact on the automakers and dealers who offered high discounts in order to push sales. To match the decline in
demand, automakers have resorted to production cuts and lay-offs, due to which capacity utilization for most
automakers remains at a dismal level.
AUTOMOBILE INDUSTRY: TOMORROW
The Automotive Mission Plan for the period of 2006-2016 aims to make India emerge as a global automative
hub. The idea is to make India as the destination choice for design and manufacture of automobiles and auto
components, with outputs soaring to reach US$ 145 billion which is basically accounting for more than 10% of
the GDP.
As the auto-shows began in January 2014, the industry promised a blend of technology and automotives. With
the recession trend breaking its leashes from the past two years, the sales of automobiles in the country is
expected to get back on.
Almost Self-governing cars are predicted to be on the streets by 2020
More than half the cars on the streets are going to be powered by diesel by 2020
Industry watcher Gartner indicates that 30 percent of motorists want parking info. The facility is likely to
come up after glitches in the infrastructure catch up.
High Performance Hybrid cars are likely to gain greater popularity among consumers.
Global brands like Porsche, Bentley, and Ferrari all set to venture in Indian market.
CONCLUSION
The automobile industry today is the most lucrative industry. The increase in disposable income in both rural
and urban sector and availability of easy finance are the main drivers of automobile sales in India. With the
competition heating up and with a host of new players coming in the Indian automobile industry has a
prominent future in India. Apart from meeting the advancing domestic demands, it is penetrating the
international market too. Flavoured with various benefits such as globally competitive auto-ancillary industry;
production of steel at lowest cost; inexpensive and high skill manpower; entrenched testing and R & D centres
etc., the industry provide immense investment and employment opportunities in India.
REFERENCES
1. Ipsita Banerjee; Joan L Walker; Elizabeth A Deakin; Adib Kanafani, New Vehicle Choice in India:
Household Choice among Motorized Vehicle Segments, 12th WCTR, July 11-15, 2010 Lisbon,
Portugal.
2. Vikram Shende, Analysis of Research in Consumer Behaviour of Automobile Passenger Car Customer,
International Journal of Scientific and Research Publications, Volume 4, Issue 2, February 2014 1 ISSN
2250-3153.
3. Ishan Chandra, Indian Middle Class Purchase Decision and Consumer behavior and towards Automobile
sector, Dublin Business School, May 2014.
4. Steffi Joseph, Automobiles & Auto ancillaries Industry, 2014.
Websites
1. Society for India Automobile Manufactures (SIAM).
2. Confederation of Indian Industries (CII).
3. Federal Highway Administration (FHWA).
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