Automotive industry in India

1

Automotive industry in India
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India manufactures over 17.5 million vehicles (including 2 wheeled and 4 wheeled) and exports about 2.33 million every year.[1] It is the world's second largest manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009.[2] India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010.[3] According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12.[4] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[5] As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world.[6] [7] According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020.[8] By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.[9]

Mahindra Scorpio, one of India's best selling indigenously developed SUV.

Foreign carmakers have built plants in India.

A chunk of India's car manufacturing industry is based in and around Chennai, also known as the "Detroit of India"[10] with the India operations of BMW, Ford, Hyundai and Nissan headquartered in the city. Chennai accounts for 60 per cent of the country's automotive exports.[11] Gurgaon and Manesar in Haryana are hubs where all of the Maruti Suzuki cars in India are manufactured.[12] The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Fiat and Force Motors[13] [14] having assembly plants in the area. Ahmedabad with the Tata Nano plant, Halol with General Motors, Aurangabad with Audi, Kolkatta with Hindustan Motors, Noida with Honda and Bengaluru with Toyota are some of the other automotive manufacturing regions around the country.[15] [16] [17]

History
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys.[18] The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.[19] Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market

Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers. They design and innovate in order to provide “black-box” solutions for the requirements of their customers. Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After researching consumers’ wants and needs. First tier suppliers are responsible not only for the assembly of parts into complete units like dashboard. in India. fabrication. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry.[23] From 2003 to 2010.[21] In February 2009. monthly sales of passenger cars in India exceeded 100. Third Tier Suppliers: These companies provide basic products like rubber. They work on designs provided by the first tier suppliers or OEMs. a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles.[26] SIAM is the apex industry body representing all the vehicle manufacturers.[20] Following economic liberalization in India in 1991. plastic and aluminium to the second tier suppliers. They also provide engineering resources for detailed designs. The design process Supply Chain of Indian Automobile Industry [1] . the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. will likely be the limiting factor. from the consumers and goes through the automakers and climbs up until the third tier suppliers. expanded their domestic and international operations.[1] The description and the role of each of the contributors to the supply chain are discussed below. a number of Indian and multi-national car companies launched operations. automakers begin designing models which are tailored to consumers’ demands.000 units[22] and has since grown rapidly to a record monthly high of 182. and with only 10% of Indian households owning a car in 2009 (whereas this figure reaches 80% in Switzerland for example [24] ) this progression is unlikely to stop in the coming decade. e. as channelled in every traditional automotive industry. The orders of the industry arise from the bottom of the supply chain i.992 units in October 2009. in order to follow their customers to various locations around the world. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. shearing.7%.. bending etc. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant India-specific investment by multinational automobile manufacturers.Automotive industry in India ultimately leading to the establishment of Maruti Udyog. more than market demand. These companies have global coverage. Since then. First Tier Suppliers: These companies provide major systems directly to assemblers. However the products.[20] In the 1980s. flow from the top of the supply chain to reach the consumers. seats. glass. or cockpit but also for the management of second-tier suppliers. car sales in India have progressed at a CAGR of 13. breaks-axel-suspension. Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. steel.[27] 2 Supply Chain of Automobile Industry The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands. Several Indian automobile manufacturers such as Tata Motors.[25] Congestion of Indian roads. Some of their services may include welding. Following the economic liberalisation in 1991 and the gradual weakening of the license raj. home-grown and international. Maruti Suzuki and Mahindra and Mahindra. A number of foreign firms initiated joint ventures with Indian companies.

.161.Automotive industry in India normally takes five years.555 190.783 2. It passed the 1 million mark during 2003-2004 and has more than doubled since.628.149 % Change 29.55 26.328 2. Service Providers: Some of the services to the customers include servicing of vehicles.27 29. Delhi(NCR).58 Total Vehicles Prodn.10 Emission norms In tune with international standards to reduce vehicular pollution. Bengaluru.641.37 -2.78 28.157 1.584 2. to the authorised dealers of the companies.000 1.52 -0.019. Chennai.044 % Change 54.808 1.999 2.178.62 -2. Solapur.74 9.86 -4.85 Commercial 722. Many dealers provide these services but.330 486.277 540.846.403 285.96 1.332.713.536.10 -9.[28] Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Car Production 2. and Agra are the 13 cities where Bharat Stage IV has been imposed while the rest of the nation is still under Bharat Stage III. and Honda.557 517.96 8. Examples of these companies are Tata Motors.479 1.511.98 7. Ahmedabad.523 894796 814611 801360 818193 % Change 33.39 17.13 22. the central government unveiled the standards titled 'India 2000' in 2000 with later upgraded guidelines as 'Bharat Stage'. Hyderabad. with the latest upgrade getting implemented in 13 cities and later. Parts and Accessory: These companies provide products like tires.948 654. in the rest of the nation. Maruti Suzuki.39 19.220 1.000 1.35 10. customers can also choose to go to independent service providers.803 253.00 31.24 -43.36 7. Kanpur. Surat. and air bags etc. or financing of vehicles.175.53 7.814. 3 Production statistics The production of automobiles has greatly increased in the last decade.253.33 16.354 907.86 19.22 23.957 533. to automakers and dealers or directly to customers.25 32.250 546. The dealers then sell the vehicles to the end customers.051 1. windshields. Lucknow. repairing parts. Automakers are the key to the supply chain of the automotive industry.83 7.89 13.473.264.99 -1.054 283.74 16. Toyota. These standards are quite similar to the more stringent European standards and have been traditionally implemented in a phased manner. Dealers: Once the vehicles are ready they are shipped to the regional branch and from there.755 1. Innovation. design capability and branding are the main focus of these companies.20 50.848 160.25 3. Kolkata. Mumbai.808 362. These companies have manufacturing units where engines are manufactured and parts supplied by first tier suppliers and second tier suppliers are assembled.968 703.550 2.199 466. 755 332. Pune. 3.

[33] In September 2009. investing EUR 700M in the operation.000 cars annually from India. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in the U. Apart from shipments to its parent Suzuki. India's strong engineering base and expertise in the manufacturing of low-cost.16m) as Asia's fourth largest exporter of cars after Japan (1. Poland. industry growth will slow if the economy weakens. In 2008.26m) by allowing foreign carmakers 100% ownership of factories in India.000 cars made in India. and is in preparation to launch electric vehicles in Europe in 2010.Automotive industry in India 4 Exports India's automobile exports have grown consistently and reached $4.[30] According to New York Times. The cars will be manufactured both for the Indian market and for export.S.5 billion in 2009. Nissan. General Motors announced its plans to export about 50.[37] PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010.[29] India's automobile exports are expected to cross $12 billion by 2014.23m) surpassed China (0. Toyota.[32] Similarly. Germany.77m). which sells them in Europe.000 cars for US$500 million. there are challenges that could thwart future growth of the Indian automobile industry. the biggest exporter from the country. The Economic Times reported that PSA Peugeot Citroen was planning to re-enter the Indian market and open a production plant in Andhra Pradesh with an annual capacity of 100.[38] .000 vehicles.000 cars manufactured in India by 2011.[35] Fiat Motors also announced that it would source more than US$1 billion worth auto components from India. export small cars from its new Indian assembly line. Hyundai. Netherlands and South Africa.[34] The company said that the plant was a part of its plan to make India the hub for its global production business. Hyundai Motors alone exported 240. Tata Motors exports its passenger vehicles to Asian and African markets. India has emerged as a leading center for the manufacture of small cars.[38] While the possibilities are impressive.S. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes. Bajaj Auto is designing a low-cost car for the Renault Nissan Automotive India.[31] Mahindra Scorpio Jeep in service with the Italy's CNSAS. The firm is also planning to launch an electric version of its low-cost car Nano in Europe and the U. which China does not allow. In 2009 India (0.000 vehicles manufactured in its India plant by 2011. Maruti Suzuki also manufactures small cars for Nissan. Volkswagen and Suzuki. Nissan will also A Tata Safari on display in Poznan. which will market the product worldwide. market. Renault Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in another small car project.12m) and Thailand (0. Nissan Motors plans to export 250. with United Kingdom being India's largest export market followed by Italy. now ships more than 250.[5] In recent years. Ford Motors announced its plans to setup a plant in India with an annual capacity of 250. fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors.[36] In July 2010. Korea (1.

Verna Transform. Omni. Indica. Aveo. Indigo CS. Bolero. Roadster 1. Maruti Swift. Eeco. 3 Series. Cruze. Maruti Suzuki. India.[51] Saab. Corolla. Accord. Swift. Vento. Passat. GAZ[61] and Proton[62] are in varying stages of official introduction to the Indian automobile market. SX4. 5 Series. Ikon. Sumo.Automotive industry in India 5 Passenger vehicles in India This list is of cars that are officially available and serviced in India. • Hyundai Motor India[77] : Santro. Venture. Opel only provides spare parts and vehicle servicing to existing Opel vehicle owners. Gypsy. Aveo U-VA.[59] Kia[60] .[41] Cadillac. Safari. car-makers such as Alfa Romeo.[54] Renault. Xylo. Indian automotive companies • Chinkara Motors[63] : Beachster.[46] Smart. • Toyota Kirloskar[83] : Etios. While other cars can be imported to the country at a steep 110% import duty. • Mitsubishi[80] (in collaboration with Hindustan Motors):[81] Lancer. Jeepster. Versa.[39] Ferrari. Linea. Thar.[55] Peugeot-Citroen.[52] Spyker. . Sonata Transform. Hammer.[45] MINI. Opel was present in India until 2006.8S. Manufactured only in Chennai. Jetta. Endeavour.[57] Jeep.[44] Zenvo. X1. Lancer Cedia. Alto. E-Class. • Škoda Auto India[86] [87] : Fabia. • Fiat India[72] (in collaboration with Tata Motors): Grande Punto. Yeti. Indigo. Innova. Laura. Fiesta. A-star. Indigo Manza. Genio • Premier Automobiles Limited[67] : Sigma. Beat.[48] Lexus.[40] McLaren. WagonR. • Ford India[73] : Figo. As of 2011. A6. i10.[43] SSC. • Mahindra Renault[78] : Logan. Tavera.[50] Acura. Accent. Rockster. • Audi India: A4. • Honda Siel[76] : Jazz. i20. Ritz. Sailster • Hindustan Motors[64] : Ambassador • ICML[65] : Rhino Rx • Mahindra[66] : Major. • Maruti Suzuki[79] : 800.[47] Daihatsu.[42] Chrysler. RiO • San Motors[68] : Storm • Tata Motors[69] : Nano.[49] Infiniti. • Mercedes-Benz India: C-Class.[58] SsangYong. Optra. Estilo. Superb. a subsidiary of Japan's Suzuki Motor. • Volkswagen India[84] [85] : Polo. Pajero • Nissan Motor India[82] : Micra. City. Scorpio. is the largest automobile [70] manufacturer in India.[53] Lotus. Aria Foreign automotive companies in India Vehicles manufactured or assembled in India • BMW India[71] : 1 Series. Swift DZire. • General Motors India[74] • Chevrolet[75] : Spark. Xenon. Civic. the i10 is one of Hyundai's best selling globally exported cars.[56] Mazda. Indica Vista.

DBS. GranCabrio. One-77. G-Class. SL-Class. Phantom. XK. Murciélago. • Toyota[83] : Prius. Hummer H3. M6 and Z4. Land Cruiser Prado. Touareg. 7 Series. Brooklands. R-Class. Outlander. Continental Flying Spur. Chevrolet: Captiva. SLK-Class. Carrera GT. Commercial vehicle manufacturers in India Indian brands • • • • • • Force[111] Hindustan Motors[112] Premier[67] Tata[113] AMW[114] Eicher Motors[115] . S4. Camry. Discovery 4. S8. Range Rover. S-Class. M3. X6. • Volvo[110] : S60. Bravo. Q7. Boxster. Audi[89] : A8. XC60. Agera. GranTurismo. Phantom Coupé. Maserati[102] : Quattroporte. Kizashi. DB9. Viano. BMW[92] : 5 Series GT. Koenigsegg[98] [99] : CCX. XC90. Hyundai[77] : Santa Fe. Maybach[103] : 57 and 62. Phaeton. Bentley[90] [91] : Arnage. CCXR. 6 • Mercedes-Benz[104] : CL-Class. Cayenne. Bugatti[93] [94] : Veyron. TT. General Motors[74] : Hummer H2. Mulsanne. Jaguar[97] : XF. Azure. Range Rover Sport. Fortuner*. Cayman. Tiguan. Virage. *Toyota Fortuner is imported as a CKD kit from Toyota Motor Thailand. Honda[95] [96] : Civic Hybrid. Superb. S80. 6 Series. • Porsche[106] [107] : 997. GL-Class. Panamera. • Rolls Royce[108] : Ghost. • Suzuki: Grand Vitara. X-Trail. CR-V. • Volkswagen[109] : Beetle. Land Rover[101] : Freelander 2. S6. Evo X. GT-R. Phantom Drophead Coupé. Q5. X5. Land Cruiser. • Nissan[105] : Teana. • Mitsubishi: Montero. Fiat[72] : 500. X6 M. Lamborghini[100] : Gallardo. XJ. CLS-Class. SLS. X3. Continental GT. 370Z. M-Class. R8. M5.Automotive industry in India Vehicles brought into India as CBUs • • • • • • • • • • • • • • • • Aston Martin[88] : Vantage. • Škoda[86] : Yeti. Rapide.

as a JV with Force Motors. com/ apps/ news?pid=20601109& sid=aO9LxvSmKTzE). . India. Retrieved 2010-09-01. Pran (2008). now 53.VE Commercial Vehicles limited . a brand of trucks based on the Fuso and the Mercedes Benz truck platforms. Retrieved 2010-11-28. "Suzuki. Footnotes [1] "Automobile Industry India" (http:/ / imaginmor. South Korea. .manufactures BharatBenz. Imagin Mor Pty Ltd.com.5% owned by Sumitomo Group • Kamaz Vectra[120] . net/ wp-content/ uploads/ all-vehicles-2010-provisional. Indian Institute of Management Kozhikode.Automotive industry in India 7 Joint Venture Brands • VE Commercial Vehicles Limited[116] . com/ news/ 2010/ c100309Motorcycle-Production-Plant-India/ ). T. A. now 51% owned by Hinduja Group • Mahindra Navistar[118] . makes MAN Trucks in India Mercedes-Benz[124] sells luxury buses in India Daimler AG[125] .honda. and Mexico. & Doreswamy. (2007). World. (2009-09-07).A JV between Volvo Groups & Eicher Motors Limited. honda.originally a JV between Punjab Tractors and Mazda. [3] http:/ / oica. .[131] Electric car manufacturers in India • • • • • • Ajanta Group[132] Mahindra[133] Hero Electric[134] REVA Tara International[135] Tata[136] Further reading • Kamala. 2010-03-09. Bloomberg. com/ automobileindustryindia. Vipin V.A JV between Russia's KaMAZ and the Vectra Group Foreign brands • • • • • • • • • • • Volvo[121] Tatra[122] MAN[123] . Six Sizzling Markets: How to Profit from Investing in Brazil. .a 51:49 JV between Mahindra Group and Navistar International • Swaraj Mazda[119] . bloomberg. • Ashok Leyland[117] . Hyundai’s Indian Car Exports Beat China’s" (http:/ / www. html).originally a JV between Ashok Motors and Leyland Motors.com. which Daimler AG owns Scania[126] Iveco[127] Hino[128] Isuzu[129] Piaggio[130] Caterpillar Inc. ISBN 9780470178881. • Tiku. com/ news/ passenger-vehicle-sales-grow-29-in-2010-11-set-to-overtake-brazil/ 3418/ 1) [5] Nair.G.N. [2] "Honda to Build Second Motorcycle Production Plant in India" (http:/ / world. pdf [4] (http:/ / bsmotoring. Strategies for Enhancing Competitiveness of Indian Auto Component Industries [137]. China. Russia. John Wiley & Sons.

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