INDIAN AUTOMOBILE INDUSTRY
Size of the Industry Geographical distribution Output per annum Percentage in world market Market Capitalization 2.6 Million Units Jamshedpur, Pune, Lucknow, Gurgoan, Delhi, Mumbai, Bangalore, etc Rs 2,000 crore per annum 6-8% 5% of the share
History Indian market before independence was seen as a market for imported vehicles while assembling of cars manufactured by General Motors and other brands was the order of the day. Indian automobile industry mainly focused on servicing, dealership, financing and maintenance of vehicles. Later only after a decade from independence manufacturing started. India’s Transportation requirements were met by Indian Railways playing an important role till the 1950's. Since independence the Indian automobile industry faced several challenges and road blocks like manufacturing capability was restricted by the rule of license and could not be increased but still it lead to growth and success it has achieved today.
For nearly three decades the total production of passenger cars was limited to 40,000 yearly. Even the production was confined to three main manufacturers Hindustan Motors, Premier Automobiles and Standard Motors. There was no expertise or research & development initiative taking place. Initially labor was unskilled and had to go through a process of learning through trial and error. In the 1950's, The Morris Oxford, became the Ambassador, the Fiat 1100 became the Premier Padmini. Then in 1960's nearly 98% of the product was developed indigenously.There were significant changes witnessed by the end of 1970's in the automobile industry. Strong and huge initiatives like joint ventures for light commercial vehicles did not succeed. Contessa, the Rover and the Premier 118NE, which were the new models, hit the market. Till later part of 1980’s India by and large followed a socialist system. The main focus of the government was development through heavy, long gestation, capital intensive projects like steel manufacturing. Priority was to the quality of the finished good and customer feedback.
Brief introduction The Indian Automobile industry includes two-wheelers, trucks, cars, buses and three-wheelers which play a crucial role in growth of the Indian economy. India has emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. The country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads by 2050.The Economic progress of this industry is indicated by the amount of goods and services produced which give the capacity for transportation and boost the sale of vehicles. There is a huge increase in automobile production with a catalyst effect by indirectly increasing the demand for a number of raw materials like steel, rubber, plastics, glass, paint, electronics and services.
Total contribution to the economy/ sales
The share of Automobile industry in the last decade in the Indian economy was around 5% of GDP. The Indian Automobile industry has become the seventh largest in the world with an annual production of over 2.6 million units in 2009.
Domestic and Export Share
Passenger Car -- 25468121478 Multi Utility Vehicles -- 26543892 Commercial Vehicles -- 1010819931 Two Wheelers -- 100002256765 Three Wheelers -- 2113851535 Percentage Growth -- 16.632.8
According to the research of Society of Indian Automobile Manufacturers (SIAM), the overall vehicle sales grew by 30 % in May 2010 to 1,208,851 units, and 8 per cent over the previous month of April 2010. Two wheeler sales rose 29 %, with motorcycle sales increasing 26% to 725,311 units, and scooter sales rising% to 157,509 units in May 2010. Commercial vehicle sales rose 58 % in May 2010. The medium and heavy commercial vehicle (M&HCV) segment grew to 33.5 % at 245,058 units and total commercial vehicle (CV) sales went up to 38.3 % to 531,395 units in 2009-10. At an estimated 25 % growth, the M&HCV segment would be about 306,000 units; total CV sales would be about 664,000 units in 2010-11. Mahindra and Mahindra (M&M) is the world's number one tractor company by selling a record of 1.59 lakh tractors in 2009 surpassing John Deere of the US.
Top & 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
Employment opportunities India today is well known as a potential emerging automobile market and jobs in the automobile industry are rising. Several foreign investments are pouring into Indian automobile industry. It has become a major three-wheeler market and two-wheeler manufacturer in the world. India is also the second largest manufacturer of tractors. Candidates with bachelor's degree in mechanical, electrical or automobile engineering are eligible to get good job opportunities in automobile companies. For the candidates with diploma courses and ITI courses there are many opportunities in this industry. Automobile companies even require IT specializations. While technical education is offered by plenty of engineering and polytechnic colleges in India,. the eligible candidates are selected by the companies. The considerable wide scope of Automobile sector, it is not that surprising that more and more candidates are dreaming to develop a career in Automobile Industry. With foreign automobile companies like Volkswagen, Audi, Renault etc coming in and targeting India as a base for manufacturing cars, the scope for a career in Automobile Industry is rising rapidly.
Year of commencement & periods of development The Automobile Industry of India has come a long way since in 1898 the first car rolled out on the streets of Mumbai (then Bombay). Indian auto industry, is currently growing at the pace of around 18 % per annum, has become a hot destination for global auto manufacturers like Volvo, General Motors and Ford. The Indian Automobile industry has adopted global standards which are manifested in the increasing exports of this sector. After a temporary decline in the years 1998- 99 and 1999-00, exports increased with 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. The research of ministry of commerce and industry, shows high growth obtained since 2001- 02 in automobile production which continued for the first three quarters of the 2004-05. The Annual growth of the industry was 16.0 per cent in April-December, 2004; the growth rate in 2003-04 was 15.1 per cent. The compound annual growth rate (CAGR) of Indian Automobile Industry is of 22 per cent between 1992 and 1997. While the investments exceeding to Rs. 50,000 crore, the turnover of the industry was Rs. 59,518 crore in 2002-03. It even estimated to have exceeded Rs.1, 00,000 crore (USD 22. 74 billion) in 2003-04.
Pollution The category for Indian Automobile Industry is “Red” which represents the highly polluting industries Several Automobile exhaust pollutants are as follows:
Hydrocarbons - are emissions caused by partially burnt fuel molecules and they react in the presence of nitrogen oxides and sunlight to from ground level ozone. Nitrogen Oxides are the gases of precursors to the formation of ozone and also contribute in the formation of acid rain. Ironically the catalytic converters are designed to break down nitrogen gases are generally forming nitrous oxide which is more potent as pollutant than carbon dioxide as greenhouse gas. When a vehicle starts Carbon Monoxide is emitted without proper air supply, when the tuning of the vehicle is not proper and when a vehicle is driven at high altitudes where the oxygen content is lesser than in the plains. Carbon monoxide emissions great share comes from the commercial vehicles especially the heavier ones.
Carbon Dioxide in greater quantities traps the earth's heat and contributes to global warming.
Pollution handling and environmental issues faced by the industry. If it is believed that smoking is harmful then there is a need to take a break from the personal automobile as the favorite set of wheels could be harming the environment and even the health more. As rest of the world is catching up with the concept of personal cars in the country, where days back having a car for the entire family will soon become a thing of the past as each bread winner of the family wants his or her personal set of wheels. Hence it is would not be surprising that the pollution levels in several metros of the country like Delhi, Mumbai, Kolkata and Bangalore are on the increase. In the cars the pollution comes from the process of the evaporation of the fuel and from the by-products of the combustion process. Cars use Petrol and Diesel which are a mixture of Hydrocarbons and compounds usually contain Hydrogen and carbon items. In simple terms the Oxygen in the air converts all the Hydrogen in the fuel to water and Carbon in the fuel would be converted to Carbon Dioxide. Nitrogen is supposed to remain unaffected in this whole process. However things are not that good as they look and engines are not that perfect either. Several types of harmful gases are emitted in the whole process of combustion which leaves the air polluted. The government is taking and has taken steps to introduce catalytic converters in the country a few years back to reduce air pollution. In addition to this petrol with lead has been phased out from several parts of the country to cut down on lead particles in the exhaust. In addition to this several cars and two wheeler companies are striving hard themselves to provide pollution free environment. Companies like Tata Motors and Mahindra are fine tuning their Diesel engines for optimum performance and reduced emission. In the two-wheelers category the companies like Hero Honda is providing pollution free vehicles. With all this support from the companies, Government has to take a proactive role to reduce the pollution levels in the country and should try phasing out old vehicles and impose heavy fines on cars and heavy vehicles that pollute the environment. It should provide tax benefits to electric cas like Reva as they don't pollute the environment and take very little space on the already congested Indian roads. Today in India several new trends are emerging to tackle the problem of pollution like people are opting for car pools while a small number are cycling their way to work.
Achievements The development story of the Indian automobile industry cannot be complete without mentioning the Pioneer Mr. J.R.D Tata's role in setting up the Tata group with high standard Engineering Research Centre (ERC) in 1965 to facilitate technological advancement. Pioneering the indigenization of scientific knowledge for trucks in collaboration with Mercedes Benze and launched Maruti 800 in the year 1983 which changed the dynamics of the passenger car sector in India. It was also known as the people’s car. 60% of the Indian commercial vehicle market is dominated by Tata Motors.
The first automobile was launched in India in the year 1897 in Bombay. Today India is being recognized as a potential emerging auto market. The industry adds up foreign players to their investments. 80% of the segment size is contributed by two-wheelers & motorcycles. Indian passenger vehicle market is dominated by cars (79%) unlike the USA.
India is the largest three-wheeler & two-wheeler market in the world. It is second largest tractor manufacturer in the world, fifth largest commercial vehicle manufacturer in the world. India crossed the 1 million mark as the fourth largest car market in Asia recently. The industry is expected to grow to US$ 40 billion by 2015 from the current level of US$ 7 billion in 2008. By the year 2016 the industry is expected to contribute 10% of the nation’s GDP. Very recently history has been created in the world of Automobile Industry by Ratan Tata, Chairman (Tata Motors) by launching the world's cheapest car NANO. The price of the car was around one lakh which gained instant recognition in the automobile industry across the globe. It heralded the coming to age of the Indian Automobile Industry. India is the second Largest Producer of Motorcycles in the world (5.2 Mln) after China which has a production volume of 12 Mln
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Last Updated On: February 23, 2012
Home » Automobile» Automobile Industry in India
Automobile Industry in India
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Wholesale,Low Prices on auto parts on Global B2B Site. Start here Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India, with overseas players gathering the same momentum as the domestic participants. Every other day, we have been hearing about some new launches, some low cost cars - all customized in a manner such that the common man is not left behind. In 2009, the automobile industry is expected to see a growth rate of around 9%, with the disclaimer that the auto industry in India has been hit badly by the ongoing global financial crisis.
The automobile industry in India happens to be the ninth largest in the world. Following Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile manufacturers have spread their operations globally as well, asking for more investments in the Indian automobile sector by the MNCs.
Potential of the Automobile industry In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011. Similar plans are for General Motors.
Segmentation of market share of automobile industry in India
Passenger Commercial Three Two
Vehicle: Vehicle: wheelers: wheelers:
15.96% 3.95% 3.60% 76.49%
Top Automobile Companies in India
Tata Motors is the largest automobile manufacturing companies in India. Established way back in 1945 Tata Motors is a multinational automobile company with its headquarters in Mumbai. Previously known as Telco TATA Engineering and Locomotive Company Tata Motors belongs to Tata Group. This company manufactures compact medium sized utility vehicles. Over the last few decades it has stood as the undisputed leader in the commercial vehicles segment. It is also the third largest producer of passenger cars in India. This automobile company in India is listed on both the Bombay Stock Exchange and the New York Stock Exchange. The revenues earned by Tata Morts in 2010 accounted to $20.572 billion. Some of the well known cars manufactured by Tata Motors are: Tata Indigo, Tata Indica, Tata Sumo Tata Indigo Marina and Tata safari.
Hindustan Motors Limited
Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative subsidy of the Birla Technical Services group. This company held the title of the biggest manufacturer of cars in India before Maruti Udyog. Hindustan Motors was the pioneer in manufacturing automobiles in India. The company
accounted for a sales turnover of Rs 150.66 crore in 2010. Some of the important cars and multi utility vehicles manufactured by Hindustan Motors Limited include; Mitsubishi Lancer, Trekker, Contessa, Ambassador, Porter, Pushpak and the Mitsubishi.
Ashoke Leyland is a leading commercial vehicle manufacturer in India. It was established in 1948. The company over the years has become synonymous with the production of trucks, passenger buses and emergency military vehicles. It happens to be the second largest commercial vehicle producer in India holding a market share of almost 30 percent. The company holds a record for selling almost 60, 000 vehicles and almost 7000 engines per years. Ashok Leyland accounted for consolidated revenues of US$ 1.4 billion in 2009. Some of the popular products by this company are; Panther BS-II Muti-axle Vehicles, Cheetah Bus-III, Tractors and Ecomet, Lynx BS-II, Diesel and Natural Gas gensets from 15KVA to 250KVA.
Maruti Suzuki India Limited
Maruti Suzuki India Limited was established in 1981. A part of this company is owned by Suzuki Motor Corporation of Japan. It is the country's largest passenger car manufacturing company. Credited for having brought in the automobile revolution in the country Maruti Suzuki India Limited was known as Maruti Udyog Limited till 2007. With its headquarters in Delhi this automobile company in India happens to be the largest producer and market share holder of cars. The company accounted for consolidated revenues of US$4.8 billion in 2010. Maruti Suzuki India Limited is credited for manufactures a variety of passenger cars SUVs, and Sedans. Some of Maruti's most popular cars are: Alto, Gypsy, Omni, Wagon R, Maruti 800, Versa, Zen, Esteem, Baleno and Swift.
Hyundai Motor India Limited
Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South Korea. Hyundai Motors happens to be the largest car manufacturer in South Korea and the sixth largest in the world. This automobile company in India is also the largest passenger cars exporter in India. Established on May 6 1996 this company in a short span of time has taken the Indian automobile industry by storm. Some of the popular cars manufactured by this company are; Santro, Getz Prime, Hyundai i10, Hyundai i20 Accent and the Verna and Sonata
Bajaj Auto is another important automobile manufacturing company in India. It is one of the India's most trusted car manufacturers. It is an operative subsidy of the Bajaj Group. Bajaj Auto happens to be the largest two and three wheeler manufacturer in India and also ranks in this field across the globe. This automobile company was established on 2 November 1945. The company was then known as M/s Bachraj Trading Corporation Private Limited. The company made a modest beginning by importing and then selling two and
three wheelers in India. Today Bajaj Auto has become synonymous with two and three wheelers in the country. Some of its popular two wheelers are; Pulsar 220DTS and Kawasaki Ninja 250R.
Indian Automobile Industry SWOT Analysis
Strengths Domestic Market is large Government provides monetary assistance for manufacturing units Reduced Labor cost
Weaknesses Infrastructural setbacks Low productivity Too many taxes levied by government increase the cost of production Low investments in Research and Development
Opportunities Reduction in Excise duty Rural demand is rising Income level is at a constant increase Threats o o o Increasing rates of interest Too much competition Rising cost of raw materials
Last Updated on 06/21/2011
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Plants Bajaj Auto's has in all three plants, two at Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttranchal, western India. Waluj Chakan Pant Nagar Bajaj range of motorcycles and three-wheelers Bajaj range of motorcycles Bajaj range of motorcycles Plant Locations Bajaj Auto plants are located at: Bajaj Nagar, Waluj, Aurangabad 431 136 MIDC, Plot No A1, Mahalunge Village, Chakan 410 501 Dist. Pune Plot No. 2, Sector 10 Phase -II - E, Pant Nagar, Sidcul, Rudrapur Dist. Udhamsingh Nagar Uttranchal The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance. The group's flagship company, Bajaj Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia. Founded in 1926, at the height of India's movement for independence from the British, the group has an illustrious history. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the group today, are often traced back to its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji had adopted him as his son. This close relationship and his deep involvement in the independence movement did not leave Jamnalal Bajaj with much time to spend on his newly launched business venture. His son, Kamalnayan Bajaj, then 27, took over the reigns of business in 1942. He too was close to Gandhiji and it was only after Independence in 1947, that he was able to give his full attention to the business. Kamalnayan Bajaj not only consolidated the group, but also diversified into various manufacturing activities. The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship company has gone up from INR.72 million to INR. 120 billion, its product portfolio has expanded and the brand has found a global market. He is one of India’s most distinguished business leaders and internationally respected for his business acumen and entrepreneurial spirit.