Synopsis Indian Automobile Industry

With the advent of 21st century, the world has shifted its attention towards Asias
rising superpower, India, due to its rapid economic transformation & putting
India in a bright spot in todays era. India is the 5 th largest car market; 2 nd
largest two-wheeler market; largest tractor and three-wheeler market in the
world. With an annual production of around 25 million vehicles, the automobile
industry contributes 7.2% to the countrys GDP and has a world market share of
around 6%. India is also a notable auto exporter with a growth rate of 1.9% in FY
2016.
The Indian automobile industry can be divided into three phases since the
independence era. Phase 1 (Before 1983) witnessed nationalization and license
raj which hampered the growth rate of the private sector. There were very few
players which were using outdated technologies, with the likes of Ashok Leyland,
Bajaj Auto, HM, Premier among others. Phase II (1983-1992) witnessed the JV of
Maruti Suzuki, todays market leader, with the support of then Indias
government and started production of passenger vehicles. It was this phase
when Indias first affordable car, Maruti 800, was launched. Many such cars were
also exported to Hungary then and the production capacity was 1 lakh units per
annum. Phase 3 (After 1992) was one of the most significant times of Indian
economy. The New Economic Policy allowed the MNCs to invest in India.
Companies like Ford & GM started assembling cars in India. By 2000, India had
around 12 large automobile companies, majority being foreign firms. In 2000,
Maruti became the 1st car company to launch a call center in India.
The two-wheelers account for whopping 80% share in the automobile industry
followed by 14% of the passenger vehicles. Within the passenger vehicles, the
cars are divided into three segments. Segment A (Passenger Cars) including
sedans & hatchbacks like Honda Amaze, Maruti Suzuki Swift/Dzire etc. Segment
B (Utility) includes the Sports Utility Vehicle(SUV) like Maruti Vitara Brezza,
Renault Duster etc. Segment C (Van) includes Maruti Omni, Tata Winger etc. The
SUV share has been rising in the recent times. MSIL has the largest market share
in the passenger vehicles category, i.e., 47.4% followed by Hyundai at 16.6%.
Such a trend is nowhere to be found elsewhere in the world with a single
company owning half of the market, except for Japan where Toyota has 30%
market share. With facts like number of vehicles Fiat sells in a year in India,
Maruti sells them in 4 days and at least 2 Maruti cars being sold every minute
shows the sheer dominance of MSIL.
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