Automobile Sector

December 6, 2019 Uncategorized

Automobile Sector

From a nation of bullock-driven carts to flashy, trendy cars, India has witnessed an accelerating growth in its automobile industry. And nothing could be more gratifying than stats substantiating these claims to irrefutable facts. Today, India is the fourth largest car market in Asia, the largest two-wheeler manufacturer, the fifth largest commercial vehicle manufacturer and the second largest tractor maker in the world. No doubt, India has emerged as the most preferred destination for foreign car manufacturers, especially as an outsourcing point. And contributing to this growth has been the very son on the soil – Mahindra & Mahindra, which is among the top five manufacturers in the world and is the leader in 25- 50 HP tractors. 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. 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, exceeded Rs 1,00,000 crore in 2003-04. And the key to sustained growth for the Indian automobile sector is the participation of foreign car manufacturing companies in India. The patents granted to India have been rising, a result of both Indian and foreign companies that have set up operations here. The data from the US Patents office shows that in 2003, patents granted to innovators based in India increased by 37% to 341 from 249. A large number of foreign automobile giants have their manufacturing units in India such as Volvo India Private Limited, General Motors India, Ford India Ltd, Eicher Motors, Hyundai Motor India Ltd, Royal Enfield Motors etc. Following Government’s liberalisation of the norms for foreign investment and import of technology, the automobile sector seems to have been reaping a rich harvest. The production of total vehicles in the country swelled from 4.2 million in 1998- 99 to 7.3 million in 2003-04. Between April 1997 and March 2005, India’s automobile exports have gone up by more than four times to cross 165,000 units. Indian auto companies are moving aggressively into foreign markets. Thus Mahindra & Mahindra (M&M) has emerged as the fourth-largest tractor brand in the US in the 15-90 horsepower (HP) segment. It has created market in the Latin American and South African markets too. Tata Motors Ltd, the country’s leading truck maker, acquired a Daewoo truck manufacturing unit in South Korea in 2004. The Ambassador car is already in great demand in Wales. And having settled itself on the fast track, the day may not be far when Indian auto brands will compete with the best on international roads.