AUTOMOBILE Industry

The global automotive industry is a highly diversified sector that comprises of manufacturers, suppliers, dealers, retailers, original equipment manufacturers or OEMs, aftermarket parts manufacturers, automotive engineers, motor mechanics, auto electricians, spray painters or body repairers, fuel producers, environmental and transport safety groups, and trade unions. The automobile and automotive parts & components manufacturers constitute a major chunk of automotive industry throughout the world. The automotive manufacturing sector consists of automobile and light truck manufacturers, motor vehicle body manufacturers, and motor vehicle parts and supplies manufacturers. This sector is engaged in manufacturing of automotives and light duty motor vehicles, motor vehicle bodies, chassis, cabs, trucks, automobile and utility trailers, buses, military vehicles, and motor vehicle gasoline engines. The Top Auto-making Nations United States, Japan, China, Germany and South Korea are the top five automobile manufacturing nations throughout the world. The United States of America is the world's largest producer and consumer of motor vehicles and automobiles accounting for 6.6 million direct and spin-off jobs and represents nearly 10% of the $10 trillion US economy. Automobile is one of the important industries in the world, which provides employment to 25 million people in the world. In the recent past, the auto parts manufacturing industry of Midwest lost 12.7% of its employment. The various factors behind this decline are unemployment recession, domestic relocation and foreign competition. This loss in employment has badly affected this industry.

Major Industry Players The worldwide automobile industry is largely dominated by five leading automobile manufacturing corporations namely Toyota, General Motors, Ford Motor Company, Volkswagen AG, and Daimler Chrysler. These corporations have their presence in almost every country and they continue to invest into production facilities in emerging markets namely Latin America, Middle East, Eastern Europe, China, Malaysia and other markets in Southeast Asia with the main aim of reducing their production costs. Global Automobiles and Components % Share, (By Volume 2004)

General Motors - 10.10 % Toyota - 7.90 % Ford - 7.70 % Others - 74.30 %

KEY INDUSTRY DRIVERS The highlighting features of global automotive industry are:

Offers support to other industries such as iron, steel, rubber, glass, plastic, petroleum, textiles, oil & gas, paints & coatings, transportation industries. Rising foreign investments have led to the rapid growth in terms of automobile production and exports. Overseas companies are making huge investments and are installing extensive production capacities in developing countries. Continuous investment in research & development has resulted in increased productivity and better quality automobiles, automotive accessories and parts. Increase in standards of living and purchasing power parity have resulted in the increase demand of automobiles especially four-wheelers in developing nations, mostly in South Asian region. This sector provides employment to major chunk of human population in the world i.e. 25 million. This industry not only provides millions of jobs to the people, but also produces billions of dollars in terms of worldwide revenues. Adequate infrastructural facilities in form of power supply, machinery, capital, ready availability of raw materials and labor help in the tremendous growth of this industry.

Market Forecasts With the upcoming marketing strategies of the manufacturers, the auto parts

industry is xpected to have reached a value of USD 586 billion by year 2009. According to reports, the compound annual growth rate of this industry is 2.6% for the period of 2004 - 2009. Global Auto Components Forecast Value - USD billion 2004 2009 Year USD billion % Growth 2004 515.5 2.30 2005 526.2 2.10 2006 538.9 2.40 2007 553.4 2.70 2008 569.1 2.80 2009 585.9 3.00 CAGR 2004 - 2009 : 2.6% It is believed that by 2015, the global auto component industry would reach US$ 1.9 trillion. With different low cost countries emerging at a fast pace in this industry, it is also expected that around 40% of the money will be sourced from such countries. India is one of such low cost countries. At present, it has only 0.4% of the global auto components trade of US$ 185 billion. By the year 2025, it is expected that India might be among the top five auto component economies.

Auto Industry Trends

In keeping with auto industry trends, leading automobile manufacturers are turning to Asian markets that appear set to grow immensely over next decade. Auto markets in U.S., Europe and Japan have almost matured as a result of saturation and appear set to decline through next decade. In contrast, auto markets spread over entire Asian continent (with exception of Japan), are constantly increasing in size and will be destination for most of globally leading auto manufacturers. Auto industry trends reveal that emerging markets of developing nations of Asia especially China, and India are backed by their huge population growth rate, to add to growing national economy of these two nations. Rapid growth of national economy of BRIC countries (including Brazil,Russia, India, and China) have enabled a growing section of population of these countries to purchase cars. Global surveys conducted recently reveal that within next ten

years, these emerging auto markets will account for nearly a whooping 90 percent of global auto sales growth. As a result of this, leading auto manufacturers of world are setting up factories in emerging markets, in order to serve potential consumers better as well as reduce manufacturing and shipping costs. In addition, these arrangements are enabling leading global auto manufacturers to compete with local auto manufacturers, that were flourishing in absence of quality competition.

Automotive industry in India

The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 11 million vehicles(including 2 wheeled and 4 wheeled) and exports about 1.5 million every year. It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 2.6 million units in 2009.[3] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2009, India is home to 40 million passenger vehicles and more than 2.6 million cars were sold in India in 2009 (an increase of 26%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.

A chunk of India's car manufacturing industry is based in and around Chennai, also known as the "Detroit of India" with the India operations of BMW, Ford, Hyundai and Nissan headquartered in the city. Chennai accounts for 60 per cent of the country's automotive exports. Gurgaon and Manesar near New Delhi are hubs where all of the Maruti Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Fiat and Force Motors having assembly plants in the area. Ahmedabad with the Tata Nano plant, Halol with General Motors in Gujarat, Aurangabad with Audi in Maharashtra and Kolkata with Hindustan Motors in West Bengal are some of the other automotive manufacturing regions around the country. Supply Chain of Automobile Industry The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry

Exports India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014. According to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011.[31] Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011. Indian automotive companies

Chinkara Motors:Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster, Sailster Hindustan Motors: Ambassador ICML: Rhino Rx Mahindra: Major, Xylo, Scorpio, Bolero, Thar, Genio Premier Automobiles Limited: Sigma, RiO San Motors: Storm Tata Motors: Nano, Indica, Indica Vista, Indigo, Indigo Manza, Indigo CS, Sumo, Venture, Safari, Xenon, Aria

Joint Venture automotive companies in India

Maruti Suzuki: 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Versa, Eeco, Gypsy, Grand Vitara