AUTOMOBILE INDUSTRY

INTRODUCTION
Automotive Industry, all those companies and activities involved in the manufacture of
motor vehicles, including most components, such as engines and bodies,
but excluding tires, batteries, and fuel. The industry’s principal products are passenger
automobiles and light trucks, including pickups, vans, and sport utility vehicles.
Commercial vehicles (i.e., delivery trucks and large transport trucks, often called semis),
though important to the industry, are secondary. The design of modern automotive
vehicles is discussed in the articles automobile, truck, bus, and motorcycle; automotive
engines are described in gasoline engine and diesel engine.

HISTORY
Although steam-powered road vehicles were produced earlier, the origins of the
automotive industry are rooted in the development of the gasoline engine in the 1860s
and 70s, principally in France and Germany. By the beginning of the 20th century,
German and French manufacturers had been joined by British, Italian, and American
makers.
Developments before World War 1- In 1769, French inventor Nicholas-Joseph Cugnot
built a three-wheeled steamer (see above image) to help the French army haul artillery
pieces. Although his contraption was considered to be too slow and impractical, Cugnot
is still regarded as the creator of the first motorized road vehicle. In 1805, Oliver Evans,
who built an incredibly slow machine designed to work on both land and in water for the
City of Philadelphia Department of Health, is considered to be the first American to
create a motorized road vehicle. Commercial production of automobiles began in 1896
in the United States, ten years after Karl Benz received a German patent for his
invention of the first automobile powered by an internal combustion engine. Along with
his wife, Bertha, he founded the German automobile manufacturer Mercedes-Benz.
The early 1900s boomed with various types of motorized vehicles being developed
around the world. In the United States Ransom E. Olds and his Olds Motor Vehicle
Company (later known as Oldsmobile) dominated this era of automobile production. As
a result of superior promotional and marketing efforts, sales of the Oldsmobile
approached 5,000 in 1904 which, at the time, was unheard of in the industry.  The
Thomas B. Jeffrey Company developed the world's second mass-produced automobile
called the Rambler. In 1902, 1,500 Ramblers were built and sold, and by 1904
production reached 2,342 units. 
Perhaps the most famous car of all time is Henry Ford's Model T. In order to keep costs
low, Ford focused efforts on improving production methods. His moving assembly line
began operation in 1913-1914 making it possible to lower the cost of the Model T and,
as a result, increase sales and potential customers. In response to consumer demands
manufacturers have reinvented the automobile numerous times over.From the
development of  anti-lock braking systems, to hybrid vehicles, to the first highway-
capable all electric vehicle, the automobile industry continues to create, innovate and
transform the way we live. 

GROWTH

The Indian automobile industry is an inspiring success story. In the past four
decades, it emerged as a shining light to catalyze India’s Gross Domestic Product
(GDP) and the whole economy. The global management consulting firm McKinsey,
termed the automobile industry as one of India’s core sectors, estimating the
manufacture of transport equipment to be worth up to 12 percent of the Gross Value
Added (GVA) in the manufacturing sector. As one of the leading driving forces of the
economy, the auto industry contributes to about 49 percent to India’s manufacturing
GDP and 7.5 percent to the GDP at large. The auto realm’s value chain is
responsible for 32 million jobs.
The industry, estimated to account for 65 million jobs by 2026, has gone through
many disruptions that began around the outbreak of the Coronavirus pandemic.
Chip shortage, multiple and duplicate bookings, rural distress, fuel price-led
inflation, a steep hike in commodity prices, container shortage, and surging logistics
costs, are some of the challenges disrupting the Indian automobile industry.

DROP IN SALES

Domestic automobile sales dropped to the lowest level in India in nine years to
17.51 million in 2021 – 22. Earlier, the low was reached in 2012 – 13 when total
wholesale fell to 17.82 million, according to the Society of Indian Automobile
Manufacturers (SIAM). Two-wheeler sales took the biggest hit, falling to the lowest
rate in a decade in 2021 – 22 to log 13.4 million units. The last time sales were so
low was back in 2011 – 2012 when the sales were at the same rate.  Within two
years of unlocking the all-time highest two-wheeler sales of 21 million units in FY19,
the numbers tumbled to the low registered in 2021 – 22.

Even decent sales of electric two-wheelers (300,000), could not offset the lows
touched in the overall two-wheeler sales. Similar was the case with internal
combustion engine (ICE) powered three-wheeler sales, which logged only 260,000
units, almost 50 percent lower than the highest sales volumes.

MARKET SIZE
Figure-1

The India passenger car market was valued at US$ 32.70 billion in 2021, and it is
expected to reach a value of US$ 54.84 billion by 2027, while registering a CAGR of
over 9% between 2022-27.

SECTOR COMPOSITION
The Automobile industry can be categorized into subsectors such as passenger
vehicles, commercial vehicles, three-wheelers and two-wheelers. Two-wheelers occupy
the dominant position, constituting about 80% market share and overall passenger
vehicles comprise 13%.

KEY TRENDS
India’s automobile exports are set to scale an all-time high in the financial year ending
Thursday, with shipments already topping the 5-million-mark for the first time, driven by
demand for made-in-India two-wheelers in Africa, Latin America and Southeast Asia.
Figure-3

The growth in overseas shipments has come as a reprieve for the two-wheeler makers
who have been struggling to increase volumes in the local market for the last three
years.

INNOVATION **

While technically the AMT or Automated manual transmission system has been in the
industry for a long time as Semi-automatic transmission, the technology was first
introduced in the Indian mass market by Maruti Suzuki. Unveiled at the 2014 Delhi Auto
Expo, the Maruti Suzuki Celerio was the first affordable mass segment gearless
hatchback to be launched in India. Also Read - Demand For Midsize SUVs Rises,
Carmakers Set to Launch THESE Models On Indian Roads Soon.
AMT technology, which was sourced for popular auto component manufacturer Magneti
Marelli, uses electro-hydraulic actuators that atomizes execute gear shifts on input from
the driver. This removes the need for a clutch pedal which the driver otherwise needs to
depress before making a gear change, since the clutch itself is actuated by electronic
equipment which can synchronise the timing and torque required to make quick, smooth
gear shifts. 

CONCLUSION

The automobile industry is one of the most important drivers of the economic growth
of India and one with high participation in global value chains. The growth of this sector
has been on the back of strong government support which has helped it carve a unique
path among the manufacturing sectors of India. The automobiles produced in the
country uniquely cater to the demands of low- and middle-income groups of the
population which makes this sector stand out among the other automobile-producing
countries.

Reference:
www.india.com **
www.ibef.org- Figure 1,2,3