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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 level. Advantage India: 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 welldeveloped, 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. Installed Capacity: 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: Segment Four Wheelers Two & Three Wheelers Total Investment Opportunities: In India, lots of investment opportunities exist in the following areas: Establishing Research and Development Centres Establishing Engineering Centres Passenger Car Segment Installed Capacity (Nos.) 1,590,000 7,950,000 9,540,000
38% Commercial Vehicle: 36.229 8.97 18. 14 of two-three wheelers and 14 of tractors besides 5 manufacturers of engines.076 277 842 146 275 5.69% Multi Purpose Vehicle: 28.74% Light Commercial Vehicle : 35.2003.12 16.Cumulative growth of some important segments in April 2006-December 2007 was Passenger Vehicles: 22.759 203 4. Is on the top.2001.461 9.600 434 594 144 237 4. Maruti Udyog Ltd.2004. followed by Hyundai and Tata Motors.046 263 391 7. Government of India Some of the major companies: There are 15 manufacturers of passenger cars and multi utility vehicles.83 per cent in April 2006-Feburary 2007.12% Medium and heavy Commercial Vehicle: 36.2002.394 -2 11.6 15.316 6. 9 manufacturers of commercial vehicles.280 7.Two Wheeler Segment Heavy truck Segment Total production: The automobile industry produces a wide variety of vehicles including 17 lakh four wheelers and over 80 lakhs two and three wheelers in 2005-06. The turn over of auto components industry has grown from US $3.76% Utility Vehicles: 12.735 5.04 *Source: Ministry of Heavy Industries & Public Enterprises (Department of Heavy Inuustries).625 341 961 249 350 6.25% Automobile Production Category 2000.759 5.527 374 1.7 18.2005.155 264 Passenger Cars Multi Utility Vehicles Commercial 157 Vehicles Two Wheelers Three Wheelers Total Growth in per cent 3.271 213 609 112 204 5. Automobile industry grew by 14. Some of the major players of Automobile industry are: .91% Passenger cars: 24. In passenger car segment.1 billion to US $10 billion between 1997-98 and 2005-06.8 14.2006-07 01 02 03 04 05 06 (till Sept'06) 513 128 564 106 163 4. Production trend: Installed capacity of this sector has been growing at a compound annual rate of over 16 per cent since 2001-02.
The turnover of this sector exceeded Rs. 1. Eicher Motors Bajaj Auto Daewoo Motors India Hero Motors Hindustan Motors Hyundai Motor India Ltd. Hero Honda Motors Bharat Forge Co. M/s Hyundai Tata Motors General Motors India Ford India Ltd. January 2007 26711 14925 8090 6. Ashok leyland Amtek Auto Exide Industries Sundaram Clayton TVS Motor Company Sundaram Fasteners Fag Bearings India Bosch Chassis Systems India Eicher Motors Automotive Axies Total investment & turnover: Automobile Automobile Auto Ancillaries Automobile Auto Ancillaries Auto Ancillaries Auto Ancillaries Automobile Auto Ancillaries Auto Ancillaries Auto Ancillaries Automobile Auto Ancillaries The automobile industry had an investment of nearly 50. In 2004-05.011 4549 2981 2497 1944 1756 1124 1044 1005 957 Maruti Udyog Ltd.000 crore in 2002-03 and it is estimated to go up to Rs.500 crore of automobile industry. total turnover of this sector was estimated to exceed Rs.000 crore Presence of foreign firms: . 144. 80.65.000 crore in 2003-04 including nearly 92.Maruti Udyog Ltd.000 crore by the year 2007. Royal Enfield Motors Telco TVS Motors DC Designs Swaraj Mazda Ltd Size of some major companies: Company Industry Market Capitalization( Rs Crore).
emission and performance standard. This automotive sector has taken benefit of liberalization of Indian economy to a large extent and made available various international brands in India for Indian consumers. the custom duty on the import of second hand vehicles including passenger cars has been raised to 105 per cent. Exim Policy: Removal of Quantitative Restrictions (QRs) from April 1. To put Indian Auto Industry at the global map. but passenger car was delicensed in 1993. Some clusters with heavy concentration of firms are Chennai and around. considerable number of Multinational Companies are operating in India either as wholly owned subsidiaries or in collaboration with their Indian partners. National Automotive Testing and R&D Infrastructure Project (NATRIP) at the total cost of Rs. and to optimize its contribution to the national economy. The custom duty rate on new Completely Built Units (CBUs) has also been increased to a level of 60 per cent to allow Indian countries to a fully competitive environment. Government support: Current Industrial Policy: The New Industrial Policy of 1991 delicensed the Automobile Industry in India. and Hoogli Region of West Bengal. Recent policy initiatives: In order to develop and realize the growth potential of this sector both at domestic and global level. The import of technology or technological upgradation on the royalty payment of 5 per cent without any duration limit and lump sum payment of US $ 2 million is also allowed under automatics route in this sector. An upcoming cluster for this sector is Rudra pur and surrounding areas in Uttarakhand. 100 per cent Foreign Direct Investment (FDI) is permissible under automatic route in this sector including passenger card segment. Firms like Hyundai are supplying manufactures cars in the international market using its manufacturing facility in India in a big way. The auto component and ancillary industry has huge forward and backward linkages in terms of employment generated. 1718 crore has been initiated. Employment generated: This sector has generated about 4. These firms are using locally available efficient and cost competitive huge pool of human resource in India. Further. absorb newer technologies. Pune. This liberalization has helped this sector to restructure itself. the Department of Heavy Industry has decided to draw up a 10 year Mission Plan for the development of Indian Automotive Sector and creation of global hub. To protect India from becoming a dumping ground for old and used vehicles produced abroad. and keep pace with the global developments realizing its full potential. 2001 has allowed the import of vehicle. no license is required for setting up of any unit for manufacture of Automobiles except in some special cases. Geographical concentration of firms: Firms of this sector are in clusters scattered all over India. deepen manufacturing in India. promote larger value addition and . Huge number of firms in auto component and ancillary industry in India are in small scale and unorganized sector employing large number of human resources. including passenger car segment freely subject to certain conditions notified by DGFT. This project principally aims to: create critically needed automotive testing infrastructure to enable the government in ushering in global vehicular safety.After liberalization of Indian Economy in general and automobile industry in particular.5 lakh of direct employment and about one crore of indirect employment. National Capital Region (NCR). Now.
For the first time since 2002.74 200203 71 1 12 180 43 307 65. two/three wheelers. the export in this sector has grown mainly to the export of cars. This trend shows that automotive sector has much to deliver in the years to come.98 200405 161 6 30 367 67 620 31. This potential is being tapped to some extent after liberalization of Indian Economy. Contribution in exports: Automotive sector in India has great potential to play a significant role in export from India.25 200506 170 5 41 513 77 806 28.03 2006-07 (till Sept.24 200102 50 3 12 104 15 185 9. A Customer Satisfaction Ranking done by TNS Automotive in April 2007 revealed that indigenous automobile companies are replacing foreign multinational companies in terms of consumer satisfaction. .35 200304 126 3 17 265 68 479 55. During the last two years.5 per cent from the earlier 10 per cent. 06) 98 3 23 332 62 519 27.43 Passenger cars Multi utility vehicles Commercial vehicles Two wheelers Three wheelers Total Growth in per cent Source: Ministry of Heavy Industry & Public Enterprises (Department of Heavy Industries) Future prospects: Future prospect of Indian Automotive Sector is looking bright. validation and development infrastructure so that Indian automotive sector would not face any export obstacle in the foreign market In the Union Budget 2007-08. the year on which TNS started this kind of survey. Automobile Export (Numbers in thousand) Category 200001 23 4 14 111 16 168 20. home grown companies displaced MNCs from the top. import duty on raw material had been reduced to 57. and provide basic product testing.performance standards and facilitates convergence of India's strength and IT and electronics with automotive engineering. enhance India's abysmally low global outreach in this sector by debottlenecking exports.
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