Indian Automotive Industry

The automotive sector, comprising of the automobile and auto component sub sectors, is one of
the key segments of the economy having extensive forward and backward linkages with other
key segments of the economy. It contributes about 4 per cent in India's Gross Domestic Product
(GDP) and 5 per cent in India's industrial production. The well-developed Indian automotive
industry ably fulfils this catalytic role by producing a wide variety of vehicles like passenger
cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters,
motorcycles, mopeds, three wheelers, tractors etc. Since the first car rolled out on the streets of
Mumbai (then Bombay) in 1898, the Automobile Industry of India has come a long way. During
its early stages the auto industry was overlooked by the then Government and the policies were
also not favorable. The liberalization policy and various tax reliefs by the Govt. of India in recent
years have made remarkable impacts on Indian Automobile Industry. Indian auto industry, which
is currently growing at the pace of around 18 % per annum, has become a hot destination for
global auto players like Volvo, General Motors and Ford.

Investment Opportunities:
In India, lots of investment opportunities exist in the following areas:
• Establishing Research and Development Centres
• Establishing Engineering Centres
• Passenger Car Segment
A well developed transportation system plays a key role in the development of an economy, and
India is no exception to it. With the growth of transportation system the Automotive Industry of
India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian
economy. After liberalization of Indian Economy in general and automobile industry in
particular, considerable number of Multinational Companies are operating in India either as
wholly owned subsidiaries or in...
Indian Automotive Industry

The Indian automobile industry has come a long way since in the first car ran on the streets of
Bombay (now Mumbai) in 1898. The initial years of the industry were characterized by unfavorable
government policies. The real big change as we see in the industry today, started to take place with
the liberalization policies that the government initiated in the 1991. The liberalization policies had a
salutary impact on the Indian economy and the automobile industry in particular.

The automobile industry in the country is one of the key sectors of the economy in terms of the
employment opportunities that it offers. The industry directly employs close to around 0.2 million
people and indirectly employs around 10 million people. The prospects of the industry also has a
bearing on the auto-component industry which is also a major sector in the Indian economy directly
employing 0.25 million people.

1] INDIAN AUTO INDUSTRY: OVERVIEW

The automobile industry in India is the eleventh largest in the world with an annual production of
approximately 2 million units , the 2nd largest two wheeler market in the world and the 4th largest
commercial vehicle market in the world. India is expected to overtake China as the world's fastest
growing car market in terms of the number of units sold and the automotive industry is one of the
fastest growing manufacturing sectors in India . The industry has grown at a CAGR of 14% p.a over
the last 5 years, with sales of 9 million vehicles in 2005-06 .Because of its large market (India has a
population of 1.1 billion; the second largest in the world), a low base of car ownership (7 per 1,000
people) and a surging economy, India has become a huge attraction for car manufacturers around the
world.
The automotive industry directly and indirectly employs 13 million individuals in India.