Chapter 3

A Product Profile: An Overview of Car Industry

Introduction
The Indian auto industry is one of the largest in the world. The industry accounts
for 7.1 per cent of the country's Gross Domestic Product (GDP). The Two
Wheelers segment with 81 per cent market share is the leader of the Indian
Automobile market owing to a growing middle class and a young population.
Moreover, the growing interest of the companies in exploring the rural markets
further aided the growth of the sector. The overall Passenger Vehicle (PV) segment
has 13 per cent market share.
India is also a prominent auto exporter and has strong export growth expectations
for the near future. In April-March 2016, overall automobile exports grew by 1.91
per cent. PV, Commercial Vehicles (CV), and Two Wheelers (2W) registered a
growth of 5.24 per cent, 16.97 per cent, and 0.97 per cent respectively in April-
March 2016 over April-March 2015.* In addition, several initiatives by the
Government of India and the major automobile players in the Indian market are
expected to make India a leader in the 2W and Four Wheeler (4W) market in the
world by 2020.
Market Size
The sales of PVs, CVs and 2Ws grew by 9.17 per cent, 3.03 per cent and 8.29 per
cent respectively, during the period April-January 2017
CAR INDUSTRY IN INDIA
Top 10 Car Companies in India

Having one of the largest automotive industries in the world, India had an
impressive performance last year, with a total vehicle production of 23,960,940
from April 2015 to March 2016. This data is according to the Society of Indian
Automobile Manufacturers or SIAM. But the development is expected to grow
even further in the coming years, boosting the countrys car market.

As of the present time, India houses more than 50 global car companies that sell
and/or manufacture different kinds of vehicles, including small, mid-size, sedan,
SUV, and luxury cars. And when you look at the number of companies operating in
India, it gets a bit difficult to choose which company to trust in purchasing a
vehicle. To make it more convenient for you, this article has listed 10 of the best
Indian car companies in 2016.
10. Volkswagen

To start the list of the top car companies in India, we have the Volkswagen on the
tenth spot. This car company was founded in 1937, having its headquarters in
Wolfsburg, Germany.

Although it has not been long since Volkswagen entered the Indian market, it is
doing well after introducing the updated versions of Vento and Polo. Aside from
that, the company is presently getting ready to relaunch the Beetle and Passat,
together with its three brand new models: Volkswagen compact SUV, Volkswagen
sub-compact Sedan, and Volkswagen Tiguan SUV.

The introduction of these three new cars will be the companys way of increasing
the presence of Volkswagen in more segments in India. And these models are top-
notch since they have been modified to suit the needs of its Indian buyers. It does
not have frill looks but has decent mileage. However, there is a limited supply of
spare parts, so it gets a bit difficult to fix the car if it gets broken.

09. Chevrolet

Founded in 1911 in Detroit, Michigan, Chevrolet of General Motors Company

(GMC) is one of the pioneering manufacturers of SUVs. It ventured into the Indian
automobile market between 1918 and 1928. It is also in the same country where
GMC opened its first assembly plant.

Currently, there are many Indians who choose to have a Chevrolet car because of
its robust built, an impressive mileage. It boasts of a strong and wide presence all
throughout the segments in India, but it has weak after-sales as of the moment.

08. Mahindra & Mahindra

The eighth spot of the 10 best Indian car companies goes to Indias very own
Mahindra & Mahindra. This multinational car company was founded in 1945,
having its headquarters in Mumbai, India. It is one of the top car makers in the
country, but it also takes pride as the worlds largest tractor manufacturer.

When it comes to its products, Mahindra boasts of having strong and durable
utility vehicles. It created the Mahindra Scorpio, which was the first SUV that
could conveniently run in the urban areas of India. In addition to its prestige,
Mahindra pioneered the electric car. But the downside of a Mahindra vehicle is its
plain interiors, uncomfortable seats, and a noisy engine.
07. Renault India Private Limited

Founded in 2005, this car company is a completely owned subsidiary of the French
automobile manufacturer Renault. Its headquarters is situated in Oragadam,
Chennai. And being in the industry for more than 10 years, Renault India has tasted
great success after launching its compact SUV called The Duster. Apart from the
Duster, the company is also well-known for its other car models such as Scala,
Pulse, Koleos, and Fluence.

Renault India manufactures cars with a good mileage. They are also reliable and
impress you with their much-improved road performance. However, you may not
be happy with how the company sets an unreasonable high price on its product.
There are also instances when some models do not have distinct features.

06. Ford

When it comes to automobiles, Ford, an American multinational automaker, will

always be one of the most popular names around the world. It has been in the
industry since 1903, providing us with high-quality vehicles for more than a
hundred years already.

Using the name Ford India, Ford successfully entered the Indian market in 1995.
With its head office in Chennai, Ford India has already sold a number of models
such as Classic, Ecosport, Endeavour, Fiesta, and Figo. It has invested a huge
amount of money to expand its operations in the country and improve the engine
quality to please the Indian buyers.
Aside from that, Ford India boasts of producing cars that are reasonably affordable
and fuel-efficient with a comfortable interior space. However, some of the models
have power steering issues and less interior space at the back, as well as, expensive
service charges.

05. Toyota

A Japan-based car company, Toyota was established in 1937 and has been known
for creating automotive products using a state-of-the-art technology. And through
its subsidiary company called Toyota Kirloskar Motor, Toyota made its way to the
Indian market and debuted in 1997.

Toyota in India was able to produce and sold car models like Altis, Corolla, Etios,
Etios Cross, Fortuner, Liva, and Qualis, making it as one of the top car companies
in India. And within 20 years, the car company was able to make a strong presence
in the automobile industry. Its sales have also increased and are continuously
increasing, indicating its superb performance in the Asian country. But the
drawback of this company is that it has no car models with diesel-powered engines
and a limited product line-up.

04. Honda

On the fourth spot is Honda, another Japanese multinational automobile

manufacturer that was founded in 1946. Honda Cars India Limited, a Honda
subsidiary, was launched in India in 1995 and currently holds significant car
segment shares in the country.
As of the present time, it continues to gain a lot of sales, attracting the Indian
market through its beautiful cars. Aside from cars, it also manufactures other
automotive products such as motorcycles, mountain bikes, engines, power
equipment, solar cells, and ATV.

The cars of this company have sharp looks, competitive prices, and fuel-efficient
engines. However, it sells spare parts at high prices.

03. Tata Motors

This Indian multinational automobile company was established in 1945 in

Mumbai, and as one of the best Indian car companies, Tata Motors claims prestige
as the largest automobile manufacturing company in Asia. It takes pride in its
exceptional manufacturing units, as well as assembly units that are situated in six
locations in India and in four other countries.

For seven decades, Tata Motors has manufactured different kinds of vehicles
like cars, buses, coaches, trucks, vans, military trucks, and construction
equipment. As such, they become as one of the leading companies in most vehicle
segment in the local market. In addition to these, Tata Motors is also operating in
Indonesia, South Africa, South Korea, Thailand, and the UK through associate
companies, acquired car brands, and subsidiaries.

02. Hyundai
Taking the second spot is Hyundai, a car company based in South Korea and was
founded in 1967. Apparently, this is the second largest car manufacturer in India
and a very popular car brand among buyers living in the cities. It has produced a
total of eight passenger cars in India, including Eon, Elite i20, Elantra, and Santa
Fe to name a few.

Hyundais biggest competitor is Maruti Suzuki in all aspects or segments. For the
last decade, this company has become an undisputed leader in car exports,
exporting its passenger car models to at least, 85 countries all over the world.

01. Maruti Suzuki

Formerly named as Maruti Udyog Limited, Maruti Suzuki is the number one on
the list of the top car companies in India. It started its operations in 1981 and is
now based in New Delhi, India. It is well-known for its iconic car called the Maruti
800.

Despite not being in the industry for a very long time (compared to the previous
companies on the list), Maruti Suzuki continuously evolves in its car production as
it employs automobile technologies in creating vehicles for the Indian buyers.
Every car this company creates is based on international standards for a much
better road performance.

Some of its popular car models are Alto, Ertiga, Swift, SX4, and the newly
launched Celerio. Furthermore, it has two manufacturing facilities located in
Gurgaon and Manesar. Its car production is around 1,450,000 every year.
Car Market in India

Over the last few decades. the car market in India have been in a burgeoning stage
with all types of cars flooding the market in order to meet the demands of Indian
customers who are increasingly exposed to state-of-the-world automobiles and
want the best when it comes to purchasing a car.

It is expected that by 2030, the Indian car market will be the 3rd largest car market
across the globe. Small cars seem to be ruling the roost in the Indian automobile
market with over 7.5 lakh small cars being sold in India in 2006-07. The main
encouraging factors for the success story of the car market in India are the increase
in the opportunity for new investments, the rise in the GDP rate, the growing per
capita income, massive population, and high ownership capacity.
The liberalization policies followed by the Indian government had been inviting
foreign investors and manufacturers to participate in the car market in India. The
recent trend within the new generation to get work in the software based sector has
led to the rise in the income level and change in the lifestyle which has further led
to the increase in the demand for different varieties of cars among them. Moreover,
there are many financing companies providing easy car loans at reasonable interest
rates and affordable installments.

The car Market in India is crowded with all varieties of car models like the small
cars, mid-size cars, luxury cars, super luxury cars, and sports utility vehicles.
Initially the most popular car model dominating the Car Market in India was the
Ambassador, which however today gave way to numerous new models like Maruti,
Fiat, Hyundai, BMW, and many others. Moreover, there are many other models of
cars in the pipeline, to be launched in the car market in India.