India is one of the most important emerging car economies in the world today.Premier Automobile Ltd. (PAL) earned the distinction of manufacturing the first car in the country. Hindustan Motors (HM), which started as a manufacturer of autocomponents graduated to manufacture cars in 1949. Thanks to the Licence
whichrestricted foreign competitors to enter the Indian car market, Indian roads were ruled by Ambassador Car from Hindustan Motors and the Fiat from Premier Auto Ltd. for many of the initial years.The control imposed on car makers related to production capacity anddistribution. The GOT control even extended to fixation of prices for cars and dealer commissions. The three decades of the passenger car industry in India up to the early1980s, proved to be the
for the consumer, as his choice throughout this period was limited to two models
Ambassador and Padmini.
It was only in 1981,after the entry of Maruti Udyog, that the car makers were given a free hand to fix the prices of cars, thus, effectively abolishing all controls relating to the pricing of the end product.In the early 80's, a series of liberal policy changes were announced markinganother turning point for the automobile industry. The very face of the industry waschanged for ever in 1983 with the entry of public sector Maruti Udyog in a jointventure with the Suzuki Corporation of Japan.Maruti Udyog Ltd introduced 'Maruti 800' in 1983 providing a complete facelift to the Indian car industry. The car was launched as a
with a pricetag of Rs 40,000. This changed the industry's profile dramatically. Maruti 800 waswell accepted by middle income families in the country. Many companies haveentered the car manufacturing sector, to tap the middle and premium end of car industry. The new entrants are
Daewoo (Matiz), Tata (Indica) and Hyundai
(Santro) in upper end of economy car market.
GM, Ford, Peugeot, Mitsubishi,
Honda and Fiat has entered the mid-sized car segment and Mercedes-Benz is in the premium end of market.