Sarangi et.

al, Apeejay - Journal of Management Sciences And Technology 2 (1), Feb - 2014
ISSN -2347-5005

Future Trend in Indian Automobile Industry :

A Statistical Approach
Pradeepta K. Sarangi

Shahin Bano

Asst. Professor, SCS

Apeejay Institute of Technology
Greater Noida

Student, PGDM(IT), 2012-14

Apeejay Institute of Technology
Greater Noida

Megha Pant
Student, PGDM(IT), 2012-14
Apeejay Institute of Technology
Greater Noida

______________________________________________
Abstract: India is a bigger market for automobile industries. Despite a huge potential, this sector has not
performed as expected. This sector suffers from slow growth, sometimes even negative growth has been
reported . This research has made an attempt to figure out the growth of the Indian automobile industry for
the next three years (till 2015-16) using statistical approach . Average growth rate of 6 to 11 percent has been
reported for different categories in car segment.
Keywords : Indian Automobile Industry, Future Trend, Statistical Approach
____________________________________________________________________________________________
I INTRODUCTION
The automobile sector in India has come a long way. This sector has reported high growth rate from 26 percent to
a worst negative growth in some segments during past years. Indian auto sector is one of the most vibrant
industry. The automobile industry is one of Indias major sectors; accounting for 22% of the countrys
manufacturing GDP. The Indian auto industry, comprising passenger cars, two-wheelers, three-wheelers and
commercial vehicles, is the seventh-largest in the world with an annual production of 17.5 million vehicles, of
which 2.3 million are exported [1].Indian Auto market has the potential to dominate the Global auto industry,
provided, a conducive environment is created for potential innovators to come up with new pilot projects.
For the year 2012-2013, automobile sector has shown a sluggish growth citing high ownership costs like excise
duty, cost of registration, fuel costs, road tax and slow rural income growth. Over the next few years, solid but
cautious growth is expected due to improved affordability , rising incomes and untapped markets. All these give a
promising opportunity for automobile manufactures in India. According to Macquaire equities research,
passenger vehicles sales is expected to double in the next four years and growth is anticipated to be higher than
16 percent from the past 10 years [2]. In this paper, we have made an attempt to forecast the sales, production and
export trend for Indian automobile industry over next three years.
II RESEARCH OBJECTIVE & METHODOLOGY
The objective of this research is to find out the growth of Indian automobile industry and to report the forecasted
values for the next three years (2013-14 to 2015-16) using statistical technique (Graphical method with linear
trend line).
III RESEARCH DATA
The data used in this research is the historical data of Indian auto mobile industry from the period 2001-02 to
2012-13 (for the segments of production trend, domestic sales trend and export trend) collected from [3] and
downloaded from the website of Society of Indian Automobile Manufacturing, (SIAM) [4]. Each segment
consists of two categories: passenger and commercial vehicles. Data collected from both the sources have been
summarized in table 1.

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Sarangi et. al, Apeejay - Journal of Management Sciences And Technology 2 (1), Feb - 2014
ISSN -2347-5005

TABLE 1
Historical data (car segment),Indian automobile industry
Year

Productio
n trend in
passenger
vehicle

Productio
n trend in
commerci
al vehicle

Domestic
sales
trend in
passenger
vehicle

Export
trend in
passenger
vehicle

Export
trend in
commerci
al vehicle

675116

Domestic
sales
trend in
commerci
al
vehicle
146671

200102
200203
200304
200405
200506
200607
200708
200809
200910
201011
201112
201213

669719

162508

50088

11870

723330

203697

707198

190682

70828

12255

989560

275040

902096

260114

126249

17432

1209876

353703

1061572

318430

160677

29940

1309300

391083

1143076

351041

170193

40600

1544850

520000

1379698

467882

189347

49766

1,777,583

549,006

1,549,882

490,494

218,401

58,994

1,838,593

416,870

1,552,703

384,194

335,729

42,625

2,357,411

567,556

1,951,333

532,721

446,145

45,009

2,982,772

760,735

2,501,542

684,905

444,326

74,043

3,146,069

929,136

2,618,072

809,532

507,318

92,663

3,233,561

831,744

2,686,429

793,150

554,686

79,944

IV EXPERIMENTAL DESIGN & RESULTS ANALYSIS

Experimental design consists of graph plotting and prediction of future values by extrapolating the trend line. Six
different experiments have been carried out. In each experiment, graph has been plotted using Spreadsheets and
then linear trend line has been drawn and expanded to calculate forecasted values. The experiments are detailed
below.
Experiment-1: This experiment deals with the production trend-passenger vehicle data of Indian automobile
industry. The graphical representation and trend line has been shown in the figure-1 below.

Year
2013-14
2014-15

Forecasted
Values
3363000
3666000

2015-16

4056000

TABLE 2
FORECASTED VALUES

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Sarangi et. al, Apeejay - Journal of Management Sciences And Technology 2 (1), Feb - 2014
ISSN -2347-5005

Fig.1 Trend line for production trend-passenger vehicle

The trend line in the figure has an upward motion indicating an increasing growth for next three years. The
forecasted values calculated from the trend line are shown in table 2.
Experiment-2: This experiment deals with the production trend-commercial vehicle data of Indian automobile
industry. The graphical representation and trend line has been shown in the figure-2 below.

Year

Forecasted
Values

2013-14
2014-15

912000
984000

2015-16

1025000

TABLE 3
FORECASTED VALUES

Fig.2 Trend line for production trend-commercial vehicle

The graph in the figure indicates that this segment has has seen negative growth during the period 2008-09 and
2012-13. Despite this, the trend line forecasts a positive growth for next three years. The forecasted values have
been shown in table 3.
Experiment-3: This experiment deals with the domestic sales trend-passenger vehicle data of Indian automobile
industry. The graphical representation and trend line has been shown in the figure-3 below.

Year
2013-14
2014-15

Forecasted
Values
2820000
3020000

2015-16

3200000
TABLE 4
FORECASTED VALUES

Fig .3 Trend line for domestic sales trend-passenger vehicle

The domestic sales of passenger vehicles has also faced ups and downs during past few years. However, our
prediction indicates positive growth for the coming years. The forecasted values have been shown in table 4.
Experiment-4: This experiment deals with the domestic sales trend-commercial vehicle data of Indian
automobile industry. The graphical representation and trend line has been shown in the figure-4 below.

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Sarangi et. al, Apeejay - Journal of Management Sciences And Technology 2 (1), Feb - 2014
ISSN -2347-5005

Year
2013-14

Forecasted
Values
832000

2014-15

890000

2015-16

945000
TABLE 5
FORECASTED VALUES

Fig. 4 Trend line for sales trend-commercial vehicle

The graph indicates a sharp decline in 2008-09 and a negative growth during 2012-13. Our experiments shows a
positive growth for this segment for the next three years. The forecasted values are shown in table 5.
Experiment-5: This experiment deals with the Export trend-passenger vehicle data of Indian automobile industry.
The graphical representation and trend line has been shown in the figure-5 below.

Year

Forecasted Values

2013-14
2014-15

590000
620000

2015-16

690000
TABLE 6
FORECASTED VALUES

Fig. 5 Trend line for export trend-passenger vehicle

Export of passenger vehicles has not achieved much success in past years. This segment has also seen flat and
negative growth. However, the trend line here indicates towards positive growth for next three years. The
forecasted values are shown in table 6.
Experiment-6: This experiment deals with the export trend-commercial vehicle data of Indian automobile
industry. The graphical representation and trend line has been shown in the figure-6 below.

Year
2013-14
2014-15

Forecasted
Values
88000
96000

2015-16

110000
TABLE 7
FORECASTED VALUES

Fig. 6 Trend line for export trend-commercial vehicle

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Sarangi et. al, Apeejay - Journal of Management Sciences And Technology 2 (1), Feb - 2014
ISSN -2347-5005

The negative and flat growth rate of this segment is easily understood from the graph. However, the trend line
indicates a positive growth for the next three years despite a negative growth in the last year. The forecasted
values are shown in table 7.
V CONCLUSION
An attempt has been made to understand and analyze the current and future trend in Indian automobile industries.
Secondary data collected from website and research publications have been used. Forecasted values have been
calculated for the period 2013-14 to 2015-16 using statistical approach. Despite various ups and downs in the
past years, our experiments show positive growth in all segments. The segment wise average forecasted growth
rate for the next three years are given in table 8.
TABLE 8
SEGMENT WISE AVERAGE FORECASTED GROWTH RATE
Segment

Average growth rate (%)

Production trend-passenger vehicle

7.88

Production trend-commercial vehicle

7.23

Domestic sales trend-passenger vehicle

6.00

Domestic sales trend-commercial vehicle

6.01

Export trend-passenger vehicle

7.58

Export trend-commercial vehicle

11.25

VI DECLARATION
This research does not challenge any other works/publications. The results are only indicative and on calculation
basis which reflects the authors view.
REFERENCES
[1]

Shankar Ajay ,CII Media Release, February 2014.

[2] Anjum Farhat,Buying Behavior and Customer Satisfaction of Hyundai Cars in Hyderabad City, International Conference onTechnology and
Business Management, March 18-20, 2013.
[3] Ray Sarbapriya, Economic Performance of Indian Automobile Industry: An Econometric Appraisal,Business Intelligence Journal,
January 2012, pp 151-162.
[4]

http://www.siamindia.com/

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