In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented the first automobile to run on roads.

This automobile, in fact, was a self-powered, three-wheeled, military tractor that made the use of a steam engine. The range of the automobile, however, was very brief and at the most, it could only run at a stretch for fifteen minutes. In addition, these automobiles were not fit for the roads as the steam engines made them very heavy and large, and required ample starting time. Oliver Evans was the first to design a steam engine driven automobile in the U.S.
A Scotsman, Robert Anderson, was the first to invent an electric carriage between 1832 and 1839. However, Thomas Davenport of the U.S.A. and Scotsman Robert Davidson were amongst the first to invent more applicable automobiles, making use of non-rechargeable electric batteries in 1842. Development of roads made travelling comfortable and as a result, the short ranged, electric battery driven automobiles were no more the best option for travelling over longer distances. The Automobile Industry finally came of age with Henry Ford in 1914 for the bulk production of cars. This lead to the development of the industry and it first begun in the assembly lines of his car factory. The several methods adopted by Ford, made the new invention (that is, the car) popular amongst the rich as well as the masses. According the History of Automobile Industry US, dominated the automobile markets around the globe with no notable competitors. However, after the end of the Second World War in 1945, the Automobile Industry of other technologically advanced nations such as Japan and certain European nations gained momentum and within a very short period, beginning in the early 1980s, the U.S Automobile Industry was flooded with foreign automobile companies, especially those of Japan and Germany. The current trends of the Global Automobile Industry reveal that in the developed countries the Automobile Industries are stagnating as a result of the drooping car markets, whereas the Automobile Industry in the developing nations, such as, India and Brazil, have been consistently registering higher growth rates every passing year for their flourishing domestic automobile markets.

Following India's growing openness, the arrival of new and existing models, easy availability of finance at relatively low rate of interest and price discounts offered by the dealers and manufacturers all have stirred the demand for vehicles and a strong growth of the Indian automobile industry.
The data obtained from ministry of commerce and industry, shows high growth obtained since 2001- 02 in automobile production continuing in the first three quarters of the 200405. Annual growth was 16.0 per cent in April-December, 2004; the growth rate in 2003-04 was 15.1 per cent Theautomobile industry grew at a compound annual growth rate (CAGR) of 22 per cent between 1992 and 1997. With investment exceeding Rs. 50,000 crore, the turnover of the automobile industry exceeded Rs. 59,518 crore in 2002-03. Including turnover of the auto-component sector, the automotive industry's turnover, which was above Rs. 84,000 crore in 2002-03, is estimated to have exceeded Rs.1,00,000 crore ( USD 22. 74 billion) in 2003-04. Automobile Dealers Network in India In terms of Car dealer networks and authorized service stations, Maruti leads the pack with Dealer networks and workshops across the country. The other leading automobile manufactures are also trying to cope up and are opening their service stations and dealer workshops in all the metros and major cities of the country. Dealers offer varying kind of discount of finances who in tern pass it on to the customers in the form of reduced interest rates. Major Manufacturers in Automobile Industry Maruti Udyog Ltd. General Motors India Ford India Ltd. Eicher Motors Bajaj Auto Daewoo Motors India Hero Motors

Hindustan Motors Hyundai Motor India Ltd. Royal Enfield Motors Telco TVS Motors DC Designs Swaraj Mazda Ltd Government has liberalized the norms for foreign investment and import of technology and that appears to have benefited the automobile sector. The production of total vehicles increased from 4.2 million in 1998- 99 to 7.3 million in 200304. It is likely that the production of such vehicles will exceed 10 million in the next couple of years. The industry has adopted the global standards and this was manifested in the increasing exports of the sector. After a temporary slump during 1998- 99 and 1999-00, such exports registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to exceed two and- a-half times the export figure for 2001-02. Automobile Export Numbers Category1998-991998-99Passenger Car25468121478Multi Utility Vehicles26543892Commercial Vehicles1010819931Two Wheelers100002256765Three Wheelers2113851535Percentage Growth-16.632.8 THE KEY FACTORS BEHIND THIS UPSWING Sales incentives, introduction of new models as well as variants coupled with easy availability of low cost finance with comfortable repayment options continued to drive demand and sales of automobiles during the first two quarters of the current year. The risk of an increase in the interest rates, the impact of delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the industry.

As the players continue to introduce new models and variants, the competition may intensify further. The ability of the players to contain costs and focus on exports will be critical for the performance of their respective companies. The auto component sector has also posted significant growth of 20 per cent in 2003-04, to achieve a sales turnover of Rs.30,640 crore (US$ 6.7 billion). Further, there is a potential for higher growth due to outsourcing activities by global automobiles giants. Today, this sector has emerged as another sunrise sector. EVEN GROWTH Opposing the belief that the growth in automobile industry has catered only to the top income-stratum of society, Growth of exports of 32.8 % in the first three quarters of 200405, the fastest growth in volumes has come from commercial vehicles as against passenger cars. Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8 times compared to the 2.2 times increase in passenger cars. Furthermore, two-wheeler output continues to dominate the volume statistics of the sector. In 2003-04, for every passenger car turned out by the sector, there were 7 two-wheelers produced. In the two wheeler segment, there is a greater preference for motorcycles followed by scooters, with both production and domestic sales of motorcycles increasing at faster rates than for scooters in the current and previous years. However, mopeds have registered low or negative growth. Export growth rates have been high both for motorcycles and scooters.

The Indian Automobile Industry is on overdrive. The rapid urbanization, coupled with an overwhelming growth in the middle class population, has created an Indian market that is extremely conducive for the automobile industry to flourish. Indian automobile industry recorded a growth of 16.07% in 2006-2007.
Automobile industry contributes 4% of the national GDP and accounts for 5% of the industrial output in India. It is moreover, a major employment generator in the country. The Indian automobile industry provides employment to around 13 million people directly or indirectly at present, a number that is likely to double by 2016. The liberalization policies of government have been one of the biggest factors behind the industry's rapid growth. Supportive policy measures like relaxation of foreign exchange and equity regulations, reduction tariffs on imports, and banking liberalization leading to a boom in financing driven purchases and convenient EMIs have contributed to the present success of the Indian automobile industry. With a number of foreign brands joining ranks with the domestic manufacturers, the Indian consumer is now flooded with choice. An average Indian can now select from a wide range

of Indian and foreign products. Some of the major Indian players are Maruti Udyog, Tata Motors, Mahindra, Ashok Leyland, Hero Honda and Bajaj. Toyota, GM Honda, Daimler Chrysler, Ford, Volvo and Hyundai Suzuki are the key international players in the Indian Automobile market. However, despite the presence of foreign brands, the domestic companies are still the biggest players. Maruti Udyog and Tata vehicles share the top honors for passenger and commercial vehicles respectively. The ICRA analysis of the Indian market projects heavy growth for competitively priced sports-utility-vehicles or SUVs and two wheelers. A number of major global brands like Honda, Suzuki, General Motors and Hyundai have launched their products in the SUV segment of the Indian automobile market. An average of 11.5% growth in the two-wheelers sales in 2004-2007 has kept a number of global companies interested in this segment as well. The market has been moreover bolstered by a healthy rise in the sales of heavy commercial vehicles, and the presence of a strong auto component industry that now ranks 2nd in the world. One of the best things to happen for the Indian automobile market in the recent years was its telling improvement in the export sector. There was a 56% growth in exports from 2003 to 2004. Although economy cars continue to hold the lion's share of the export market, vehicles worth more than USD 1 billion were also exported in 2004, for the first time in history. This increasing demand for Indian cars on the foreign shores has helped the country's automobile industry in two significant ways. First, it has decidedly contributed to the economic growth of the industry. Secondly, it has helped to improve the image of the Indian manufacturing infrastructure at a global level. This increased confidence has resulted in more and more foreign brands opening manufacturing units in India, directly contributing to economy and employment. The Indian automobile industry is now riding high on success, and the bright picture does tend to obscure the problems and challenges that lay on the track of its growth. Poor road conditions, heavy pollution and large scale traffic related accidents are serious impediments in the way of the industry's growth. However, steps are being initiated by the government to address these problems at various levels, and solutions are being worked out at a steady pace.

The Indian Automobile Industry is on overdrive. The rapid urbanization, coupled with an overwhelming growth in the middle class population, has created an Indian market that is extremely conducive for the automobile industry to flourish. Indian automobile industry recorded a growth of 16.07% in 2006-2007.
Automobile industry contributes 4% of the national GDP and accounts for 5% of the industrial output in India. It is moreover, a major employment generator in the country. The Indian automobile industry provides employment to around 13 million people directly or indirectly at present, a number that is likely to double by 2016. The liberalization policies of government have been one of the biggest factors behind the industry's rapid growth. Supportive policy measures like relaxation of foreign exchange and equity regulations, reduction tariffs on imports, and banking liberalization leading to a boom in financing driven purchases and convenient EMIs have contributed to the present success of the Indian automobile industry. With a number of foreign brands joining ranks with the domestic manufacturers, the Indian consumer is now flooded with choice. An average Indian can now select from a wide range of Indian and foreign products. Some of the major Indian players are Maruti Udyog, Tata Motors, Mahindra, Ashok Leyland, Hero Honda and Bajaj. Toyota, GM Honda, Daimler Chrysler, Ford, Volvo and Hyundai Suzuki are the key international players in the Indian Automobile market. However, despite the presence of foreign brands, the domestic companies are still the biggest players. Maruti Udyog and Tata vehicles share the top honors for passenger and commercial vehicles respectively. The ICRA analysis of the Indian market projects heavy growth for competitively priced sports-utility-vehicles or SUVs and two wheelers. A number of major global brands like Honda, Suzuki, General Motors and Hyundai have launched their products in the SUV segment of the Indian automobile market. An average of 11.5% growth in the two-wheelers sales in 2004-2007 has kept a number of global companies interested in this segment as well. The market has been moreover bolstered by a healthy rise in the sales of heavy commercial vehicles, and the presence of a strong auto component industry that now ranks 2nd in the world.

One of the best things to happen for the Indian automobile market in the recent years was its telling improvement in the export sector. There was a 56% growth in exports from 2003 to 2004. Although economy cars continue to hold the lion's share of the export market, vehicles worth more than USD 1 billion were also exported in 2004, for the first time in history. This increasing demand for Indian cars on the foreign shores has helped the country's automobile industry in two significant ways. First, it has decidedly contributed to the economic growth of the industry. Secondly, it has helped to improve the image of the Indian manufacturing infrastructure at a global level. This increased confidence has resulted in more and more foreign brands opening manufacturing units in India, directly contributing to economy and employment. The Indian automobile industry is now riding high on success, and the bright picture does tend to obscure the problems and challenges that lay on the track of its growth. Poor road conditions, heavy pollution and large scale traffic related accidents are serious impediments in the way of the industry's growth. However, steps are being initiated by the government to address these problems at various levels, and solutions are being worked out at a steady pace.

Challenges Before Indian Automobile Industry

Over the last few years the face of the Indian automobile industry has undergone a sea change. The growth of the industry has surpassed all previous records. However there are certain factors that stand as challenges before the Indian automobile industry.
The development of the industry has been attributed to a couple of factors. One of these was the liberalization of the economy in the early 1990s and the rise in disposable income and standard of living. Liberalization of the economy meant a decrease in import tariffs, equity regulations, liberalization in banking norms and relaxation of the foreign exchange. Since then there has been no looking back and the automobile industry has continued to

grow at a consistent rate of 25%. These positive steps led to globally renowned auto brands to invest in the Indian market. Some of the leading automobile manufacturers from Europe and the United States collaborated with Indian brands to create customized vehicles for each section of the population. Companies like Maruti Udyog were formed as a result of collaboration between Suzuki of Japan and the Indian government. With each passing year, the number of automobile manufacturers willing to take the plunge into the Indian market has risen considerably while most of the international brands have entered into joint ventures; there are exceptions like Hyundai which is keen on setting up its own manufacturing units. However, there are numerous challenges before Indian automobile industry. One of the major problems faced by this sector is the poor condition of the roads. The road infrastructure is not properly developed. The condition of the highways is not up to the mark. A large number of the roads are single lane roads built almost 50 years ago. They hardly match the rapid pace at which the automobile industry is developing. Moreover, they are mostly used by bullock carts and two wheelers. It is believed that the condition of the roads would worsen with the introduction of bigger and increasing number of vehicles. Repair work is expected to incur expenses up to$30 billion. The privatization of the road infrastructure is not enough to solve the problem which has attained large proportions. The Road Development Program and its progress is expected to be a key factor in the growth of the auto industry in India. Though numerous foreign companies have entered the Indian automobile market, the tariffs on imported components and products and the frequent alterations in the currency exchange rates have made localization an absolute necessity for these companies. Daewoo-DCM and GM Astra have already begun the process of localization and plan to expand it. However, it there is an obstacle in the path of localization with respect to the limited number of component suppliers. The policies and programs of the government in power also play a crucial role in the growth of this sector. The major players in the Indian automobile industry include Maruti Udyog, Mahindra& Mahindra, Hindustan Motors and Telco. They can be divided into four major sections namely Multinational Assemblers, Indian Assemblers, Multinational Component Makers and Indian Component Makers. While the Indian Assemblers boast of a proper distribution network, at the same time they fall short in with respect to product development and a known brand. The multinational assemblers, on the other hand, have a well developed production system and financial resources but are not well acquainted with the intricacies of the Indian market.

Despite these challenges, the Indian automobile industry has managed to carve a niche for itself in the global auto sector. It continues to grow in the face of some stiff competition from other Asian auto markets.

Top Players in Indian Automobile Industry

The top players in the Indian automobile industry have played a key role in the growth and development of the automobile industry in India. Companies like Bajaj Auto, Hindustan Motors and TVS Motors, with their ever expansive car dealing networks, promotional, convenient customer care services, have marked India among the leading automobile Industries.
Automobile Industry: An Overview
According to the Ministry of Commerce and Industry, the automobile sector in India has witnessed a tremendous compound growth at the rate of 22 % between the year 1992 and 1997. Moreover,the annual turnover of the automobile industry in India, in the financial year 2002-2003, is said to have exceeded the capital investment of Rs 50,000 crore. With Indian automobile companies gaining international market, the turnover in the same year was calculated to be Rs. 59,518 crore.

Top players in India Automobile industry

Some of the important companies and their details include:

Hindustan Motors:
One of the oldest car manufacturing companies in India, it has produced cars like Ambassador and Contessa. Having collaborated with foreign companies like Mitsubishi, and General Motors Corporation of USA, it has made an irrefutable mark in the manufacturing cars like the Lancer. Apart from this, the company has impressive manufacturing statistics in the field of passenger Cars, utility vehicles, and earthmoving equipment.

Mahindra and Mahindra:

Established in the year 1945, this company has given a cutting-edge dimension to the Indian automobile industry. It began as a general-purpose utility vehicle manufacturing unit and expanded its business to automative, tractor, MSL and inter trade. Presently, the largest company in the private sector, this company boasts of an advanced technological infrastructure and manpower.

Bajaj Auto Limited:

Established in the year 1945, Bajaj Autos started off as a trading company. It was responsible for marketing two-wheelers from Italy in India. Presently, one of the front runners in market capitalization, Bajaj Autos attained its license to produce two wheelers in the year 1959. With the help of technical collaboration from Piaggio of Italy, the company now boasts of being the top five automobile companies when it comes to annual turnover. As the company's contract with Piaggio expired in the year 1971, it became the sole manufacturer of two and three wheelers under the 'bajaj' tag. Its manufacturing hub in Maharashtra has an annual production of 1.35 million.

Maruti Udyog Limited:

The first ever Indian company to manufacture low cost cars, in collaboration with Suzuki of Japan, Maruti is considered to be the largest automobile company in India. The company is known for producing high quality, fuel-efficient cars with Japanese technology, but adaptive to Indian roads. The company has attained the annual production mark of 3,20,000, which is a trend setter for any Indian company. Among the cars it has manufactured are the

Maruti 800, Zen, Maruti Omni, Wagon R, Baleno and the like.

Tata Motors:
India's biggest manufacturer of commercial vehicles, the company boasts of an annual turnover of Rs 101.3 billion. It is counted among the top ten vehicle manufacturing companies of the world in 5-15 tonnes segment. Among its chief productions are light commercial vehicles, commercial vehicles, multi-utility vehicles, and passenger cars.

TELCO has launched numerous car brands in collaboration with foreign companies like Cummins Engine Company, USA, Daimler Benz A.G.and Holset Engineering Company, U.K. Using technology that not only cuts out on the pollution but also the cost, the company has manufactured vehicles like Tata Safari, Tata Sierra, Tata Estate, and Tata Mobile. Presently, the company has a market share of 6.4 % in the luxury car section and 31.2% in the manufacturing segment of multi-utility cars. Brand name, adaptability to Indian roads, and fuel-efficiency are the key factors that have led to the growth and development of the Indian automobile industry. Moreover, liberalization of government norms and policies for foreign investment, technology and easy loans have added to the advancement of this industrial sector.

Government Policies on Indian Automobile Industry

The Indian Automobile Industry plays a major role in the economic scenario of the country. The automobile sector in India, record sales of more than one million passenger cars per year. The percentage of automobile exports has risen significantly during the last few years. The government policies on Indian automobile industry have been framed in order to aid in the expansion of the automobiles sector in India.
During the early stages, the automobile industry was not accorded much importance by the Indian Government. However, the attitude changed during the 1990's. A number of reforms were initiated in 1991. Liberal policies affected during this period, proved to be beneficial to the automobile industry. The fiscal measures, tax reliefs and reforms in equity regulations and foreign exchange led to significant growth in the automobile sector. A reduction in the percentage of tariffs imposed on exports and a change in the banking policies was instrumental in the expansion and growth of the banking sector.

Prior to the mid 1990's, the Indian automobile sector comprised of indigenous companies. The automobile market in India was however, opened up to foreign investors in 1996. International names like Ford, Hyundai, Toyota, Volvo, Daimler Chrysler and GM Honda were thus, able to make their foray into the Indian automobile sector. Furthermore, the auto emission rules issued by the government in recent years ensured that the vehicles manufactured in India, catered to international standards. At present, the automobiles sector contributes 4 % to the GDP. About 9.7 million automobiles were manufactured in 2005-2006. Export figures had crossed the magic figure of one billion during 2003-2004. A reduction in the tariff imposed on car exports has been effected by the Indian government. There has also been a removal of the minimum capital investment required from new investors. The new policy is also in favor of reduction in excise duty for small automobiles and low emission and multi utility cars. The tariff policy is also to be reviewed on a regular basis in order to affect a balance between domestic industry and international trade. There has also been a proposal for tax relaxation on investment of more than Rs. 500 Crore. The government has recently proposed for an infrastructure that will provide one stop clearance for any kind of proposal for foreign direct investment in the automotive sector. This will include the local clearance system also for the same purpose. There are also plans for imposing a 100 % tax deduction on export profits. The government has also proposed for a concession in import duty for the establishment of new manufacturing units and industrial holdings. The Indian government is also urging the state governments to ensure continuous power supply to the automotive manufacturing units as well as granting them with the preferred plots of land. Captive Generation for the automobile sector has also been proposed. The auto policy of the Indian government also includes the promotion of vehicles which are run on alternative energy resources. Talks are also on for extensive research, development and designing facilities that would effect modernization in the automotive sector. The policies adopted by the Indian government for the growth and development of the automobile sector, has led to a large number of foreign investments. It has also given rise to an increased sales rate for two wheelers and other automobiles. India is also becoming the ultimate outsourcing destination for global automobile companies like Ford, Mitsubishi, Toyota, Hyundai etc.

FDI in Indian Automobile Industry

The FDI or Foreign Direct Investment in Indian Automobile Industry has opened up new avenues for the development of this important sector of Indian industries. The liberalization of government policies regarding FDI in the automobile industry of India has increased the scope of this industry.
Initially, the automobile industry of India was ruled by national vehicle manufacturers like Premier Automobile and Hindustan Motors. The entrance of foreign automobile companies in the market was restricted by the imposition of high import tariffs and other policies and measures. The first FDI player in the Indian automobile industry was Suzuki. In 1980s this company entered into a joint venture with Maruti Udyog, a state run enterprise. The then Indian government permitted this company to enter the Indian automobile market in 1983. In 1991, the government of India liberalized its policies regarding the automobile industry of India Foreign Direct Investment in the automotive industry of India was permitted. In 1993,

FDI was also allowed in the passenger car segment of Indian automobile industry. The liberalization of governance policies with regard to FDI in Indian automobile industry has resulted in the rapid growth of this industrial sector post 1993. The major global players in the automobile industry have invested in the Indian vehicle manufacture as well as auto component part manufacture. The major foreign players who have a significant role in the development of Indian automobile industry include the following: Ford from USA DaimlerChrysler AG from Germany

General Motors from USA Suzuki from Japan BMW from Germany Honda from Japan Renault from France Hyundai from South Korea Toyota from Japan Foreign Direct Investment in the automobile industry of India has helped in the growth of this sector in terms of production, domestic sales and export. FDI is also permitted in the manufacture of auto components in India.

Growth of Indian Automobile Industry

Growth of Indian Automobile Industry exhibits the rate of development of this prominent industrial sector of India and its contribution to the economy of the country. The expansion of the automotive industry of India has also attracted foreign investors to this sector.
The growth in the production, the domestic sales and the foreign markets together showcase the progress that the automobile industry of India has achieved during the last few years. The liberal policies of the Indian government has also enhanced the scope of this growth. The growth of Indian automobile industry in the field of production in the past of years can be understood from the following:

Category Twowheelers Threewheelers

2002-03 5,076,22 1 276,719

2003-04 5,622,74 1 356,223

2004-05 6,529,82 9 374,445

2005-06 7,608,69 7 434,423

2006-07 8,466,666 556,126

2007-08 8,026,049 500,592

Passenger Vehicles Commerci al Vehicles Total

723,330 203,697 6,279,96 7

989,560 275,040 7,243,56 4

1,209,87 6 353,703 8,467,85 3

1,309,30 0 391,083 9,743,50 3

1,545,223 519,982 11,087,99 7

1,762,131 545,176 10,833,94 8

The growth of Indian automobile industry in the domestic sales sector exhibited a rapid increase. The following table gives details about the growth in this sector:

Categor y

200203

200304

200405

200506

200607

200708

Percent age of growth (200607) 11.42% 12.22%

Twowheelers Threewheelers Passeng er Vehicles Commer cial Vehicles Total

4,812,1 26 231,52 9 707,19 8 190,68 2 5,941,5 35

5,364,2 49 284,07 8 902,09 6 260,11 4 6,810,5 37

6,209,7 65 307,86 2 1,061,5 72 318,43 0 7,897,6 29

7,052,3 91 359,92 0 1,143,0 76 351,04 1 8,906,4 28

7,872,3 34 403,910 1,379,9 79

7,248,5 89 364,70 3 1,547,9 85 486,81 7 9,648,0 94

20.70%

467,765 10,123, 988

33.28%

The domestic sales market of the sub-categories of vehicles have also witnessed an increase. The following table offers information about this:

Category

Sub-sections

Percentage of growth (2006-07)

Two-wheelers

Motorcycles

12.79%

Scooters

3.48%

Mopeds

6.95%

Three-wheelers

Passenger Carriers

11.33%

Goods Carriers

13.52%

Passenger Vehicles

Passenger Cars

22.01%

Multi-Purpose Vehicles

25.20%

Utility Vehicles

13.21%

Commercial Vehicles

Light Commercial Vehicles

33.93%

Medium and Heavy Commercial Vehicles

32.84%

The increase in the export of vehicles manufactured in India have also helped in the expansion of the automotive industry of India. The following table offers information about the export trends in the past few years:

Percentag Category 200203 200304 200405 200506 2006-07 2007-08 e of growth (2006-07)

Twowheelers

179,68 2

265,05 2

366,40 7

513,16 9

619,644

819,847

20.65%

Threewheelers

43,366

68,144

66,795

76,881

143,896

141,235

87.17%

Passenger Vehicles

72,005

129,29 1

166,40 2

175,57 2

198,452

218,418

13.05%

Commercia l Vehicles

12,255

17,432

29,940

40,600

49,537

58,999

22.58%

Total

307,30 8

479,91 9

629,54 4

806,22 2

1,011,52 9

1,238,49 9

25.43%

The chief importer of Indian automobiles is Europe. The trucks and buses manufactured in India are exported mostly to the African nations. The two-wheelers manufactured in India are exported to the South-East Asian region. China is also becoming a major importer of Indian vehicles. The investment of foreign car companies in India automobile industry have also helped in its growth. Several automakers of the world including Ford from USA, Renault from France, Honda from Japan, BMW from Germany have made significant investments in this industry.

Size of Indian Automobile Industry

Since its inception in 1898, the Size of Indian Automobile Industry has grown over the years. One of the major contributors in the progress of Indian economy, the automotive industry of India also plays a major role in the development of the transport network of the country.

A wide range of vehicles are produced by the manufacturers of Indian Automobile Industry. These include two-wheelers like motorcycles, scooters and mopeds, three-wheelers, passenger cars, multi-utility vehicles, heavy, medium and light commercial vehicles. The automotive industry of India comprises 15 passenger cars and multi-utility vehicles' manufacturers, 14 manufacturers of two and three-wheelers, 9 commercial vehicles' manufacturers and 14 tractor manufacturers. 5 engine manufacturers are also present. The amendments in the government policies have helped in the development of the Indian automobile industry. According to the new policies, 100% Foreign Direct Investment is allowed. Foreign Direct Investment is also permissible in the segment of passenger cars. Indian automobile industry is known for its achievements in various segments. India is known for the following: S. No 1. 2. 3. 4. Largest two-wheeler manufacturer in the world Largest three-wheeler market in the world Second largest tractor manufacturer of the world Fifth largest commercial vehicle manufacturer in the world Production Two-wheelers Three-wheelers Cars Commercial Vehicles Multi-Utility Vehicles 20052006 7600801 434424 1045881 391078 2005-2006 (AprNov.2005) 4990487 275579 666898 247277 2006-2007(AprNov.2006) 5739861 361525 792446 325475

5.

263032

263032

173407

Total

9735216

6353648

7414420

The export section of the automotive industry of India has also achieved huge success in recent years. Vehicles as well as component parts are exported from India to foreign countries. This has also given a boost to the Indian economy. The details of the exports of the Indian Automobile Industry is as follows:

S. No. 1 2 3 4

Production Two-wheelers Three-wheelers Cars Commercial Vehicles Multi-Utility Vehicles Total

20052006 513256 76885 170193 40581

2005-2006 (AprNov.2005) 343446 50805 113280 24443

2006-2007(AprNov.2006) 430412 89039 126734 31363

76885 806494

50805 535588

89039 681531

The investment in the automotive industry of India was more than Rs. 50,000 crore in 2002-03 and the estimated investment in the year 2007 is about Rs.80,000 crore. The annual turnover of the Indian automobile industry Rs. 1,65,000 crore (34 billion USD).

The contribution of the Indian automotive industry in the GDP has increased to 5% in 2005-06 from 2.77% in 1992-93. The annual growth rate in terms of production have reached 16.07% in 2006-07. The growth rate in the exports of automobile industry of India has risen to 27.25% in 2006-07.

The ever increasing size of the Indian automobile industry showcases the growth of this section of trade and industries of the country. The expansion, the profit and the liberalized policies have also attracted foreign investment in this sector.