Country Industry Forecast
Report Service
The Indian Automotive Industry
1996 - 2006
The Indian Automotive Industry
Available as part of CIFAutomotive Subscription #9909-H1Country Industry Forecast (CIF) your tool to gauge how a countryseconomic, political, and regulatoryenvironment impacts the industry.In a dynamic global businessenvironment, knowledge of country-specific factors is vitalfor effective decision-making -specifically information aboutpolitical situations, policydecisions, and prevailingeconomic conditions. CIFsintegrated approach links allcomponents of the economyto give you industry insights without missing out onthe big picture.Created and supported by Frost &Sullivans team of analysts andexperts around the globe, theCountry Industry Forecast reportsprovide a unique service, which is amust for senior-level decision-makers, analysts, industry observers,and marketing professionals.Report # 4526 - 90
Structural Reforms To Accelerate Economic Growth
Economic reforms in India have finally steered the country towards steady growth. Thecountry escaped the Asian crisis and even experienced stable economic development.Opportunities have arisen in the manufacturing, infrastructure, and the services sectors.This positive trend is expected to continue over the next five years. The new EXIM policyis tailored to promote exports while import duties are gradually aligning with WTOcommitments. Indian companies are now facing stiff competition from global giants, causingthem to match global standards. On the fiscal front too, the Government is taking steps tocontain inflation by channeling expenditure into priority projects and speeding up thedisinvestment of public sector enterprises. In all, the economic outlook for the country isquite positive.This encouraging forecast is reflected in the increasing scale of production for the automotiveindustry. The dereservation of the vehicle component market and the rising ceiling forinvestment are likely to drive growth and encourage new ventures in this sector. However,the provision of additional depreciation on new plant and machinery may discouragetechnology up gradation as the industry is already plagued by excess capacities.The Country Industry Forecast studies the country-specific factors such as politics, businesspolicy, and macroeconomic indicators that have an impact on the Indian automotive industryand its main segments. This report provides incisive analysis of the industry for 19962001as well as forecasts for 20022006.
Motor Vehicle Segment to Witness Mixed Growth
Despite the fact that
saturated western markets have forced manufacturers to contemplategreater production and sales in the virtually untapped markets in the Asia Pacific region,inadequate infrastructure and comparatively low consumer spending could deter the growthof the motor vehicle segment. According to the report,
The motor vehicle segment is likelyto witness a mixed growth though a large number of manufacturers have entered the arenaafter the opening up of the automotive industry. However, the market is still at the infantstage. Consumer spending is also low due to the poor purchasing power of the ruralsection that accounts for nearly 72 percent of the population.
Multi-tiering of Industry Vital to Growth
The current situation requires automotive manufacturers in India to increase theirinvestments and revamp technologies to met global standards. The report says, Therequirement of the day is tierization of component suppliers into Tier I, Tier II, and Tier IIIsuppliers, Tier I forming the core suppliers to the original equipment manufacturers (OEMs)and Tier II and III forming the suppliers to the Tier I component manufacturers as well as tothe OEMs for specific requirements. The Indian automotive market is still in the infantstages, it is rapidly undergoing a transformation with tierization and increasing qualitystandards to ensure becoming globally competitive.
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