The automotive sector, comprising of the automobile and auto component sub sectors, is
one of the key segments of the economy having extensive forward and backward linkages
with other key segments of the economy. It contributes about 4 per cent in India's Gross
Domestic Product (GDP) and 5 per cent in India's industrial production. The well-developed
Indian automotive industry ably fulfils this catalytic role by producing a wide variety of
vehicles like passenger cars, light, medium and heavy commercial vehicles, multi-utility
vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelers, tractors etc.
The auto component industry, which is an important part of automotive sector, comprises
about 500 firms in the organized sector and more than 10,000 firms in the small and
unorganized sector has been one of the fastest growing segments of Indian manufacturing.
It has the capability to manufacture the entire range of auto parts and has rapidly added to
its capacity base. Indian auto components industry has an important place at the global
India holds huge potential in the automobile sector including the automobile component
sector owing to its technological, cost and manpower advantage. Further, India has a well-
developed, globally competitive Auto Ancillary Industry and established automobile testing
and R&D centres. The country enjoys natural advantage and is among the lowest cost
producers of steel in the world. The Indian automobile industry today boasts of being the
second largest two wheelers manufacturers in the world, second largest tractor
manufacturer in the world, fifth largest commercial vehicle manufacturer in the world and
fourth largest Car market in Asia. World largest Motorcycle manufacturer is in India.
India has largest three wheeler market in the world, second largest two wheeler market in
the world, fourth largest passenger vehicle market in Asia, fourth largest tractor market in
the world, fifth largest commercial
vehicle market in the world. India became fastest growing car market in the world in 2004.
The automobile industry including passenger cars, over a period of time and particularly
after liberalization, has installed a robust capacity in different segments of automobile
industry is as under:
The automobile industry had an investment of nearly 50,000 crore in 2002-03 and it is
estimated to go up to Rs. 80,000 crore by the year 2007.The turnover of this sector
exceeded Rs. 144,000 crore in 2003-04 including nearly 92,500 crore of automobile
industry. In 2004-05, total turnover of this sector was estimated to exceed Rs. 1,65,000
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