Automobile sector in India, Automobile sector Growth, Automobile sector
Automobile sector in India
Automobile sector in India
Introduction
Automobile is one of the significant mechanisms in industrial and economic growth. It is a massive sector which affects plenty of other sectors and social variables such as market, growth rate, economic stability etc. The automobile industry in India is the ninth largest in the world with an annual production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. Surprisingly, India is ahead of China in this regard.This is one of the results of the LPG policy adopted by India after 1990. Following economic liberalization in India in 1991,
the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which attracted significant India-specific investment by multinational automobile manufacturers. In February 2009, monthly sales of passenger cars in India exceeded 100,000 units.That is one indicative of the market conditions and it is contrasting to the global scenario.
The key factors behind this growth
the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which attracted significant India-specific investment by multinational automobile manufacturers. In February 2009, monthly sales of passenger cars in India exceeded 100,000 units.That is one indicative of the market conditions and it is contrasting to the global scenario.
The key factors behind this growth
Sales incentives, introduction of new models as well as variants coupled with easy availability of low cost finance with comfortable repayment options continued to drive demand and sales of automobiles even during the period of recession. The risk of an increase in the interest rates, the impact of delayed monsoons on rural demand, and increase in the costs of inputs such as steel are the key concerns for the players in the industry. Despite of these hurdles; the industry has produced considerable growth and it has given momentum to related industries and sectors.
As the players continue to introduce new models and variants, the competition may intensify further. The ability of the players to contain costs and focus on exports will be critical for the performance of their respective companies. This will keep this sector booming regardless of the international recession.
Here are a few figures to justify it. The auto component sector has also posted significant growth of 20 per cent in 2003-04, to achieve a sales turnover of Rs.30, 640 crore (US$ 6.7 billion). Further, there is a potential for higher growth due to outsourcing activities by global automobiles giants. Today, this sector has emerged as another sunrise sector.
The data obtained from ministry of commerce and industry, shows high growth obtained since 2001- 02 in automobile production continuing in the first three quarters of the 2004-05. Annual growth was 16.0 per cent in April-December, 2004; the growth rate in 2003-04 was 15.1 per cent. The automobile industry grew at a compound annual growth rate (CAGR) of 22 per cent between 1992 and 1997 and it continues even today.
With investment exceeding Rs. 50,000 crore, the turnover of the automobile industry exceeded Rs. 59,518 crore in 2002-03. Including turnover of the auto-component sector, the automotive industry's turnover, which was above Rs. 84,000 crore in 2002-03, is estimated to have exceeded Rs.1,00,000 crore ( USD 22. 74 billion) in 2003-04. These are ample figures to assure continued growth of this sector and its positive impacts on the other related sectors.
Future prospects
In the context of this unparalleled growth; it can be predicted that this market will be a boost for Indian and thereby the global economy. Continued growth and expansions will also helpful for increasing employment opportunities in India. It is good news not only for the automobile giants, but also for the common man of India who strives for winning the bread.
Current scenario
In the context of this unparalleled growth; it can be predicted that this market will be a boost for Indian and thereby the global economy. Continued growth and expansions will also helpful for increasing employment opportunities in India. It is good news not only for the automobile giants, but also for the common man of India who strives for winning the bread.
Current scenario
Automobile Export Numbers
Category | 1998-99 | 2004-05 (Apr-Dec) |
| Passenger Car | 25468 | 121478 |
| Multi Utility Vehicles | 2654 | 3892 |
| Commercial Vehicles | 10108 | 19931 |
| Two Wheelers | 100002 | 256765 |
| Three Wheelers | 21138 | 51535 |
Percentage Growth | -16.6 | 32.8 |
Automobile sector in India, Automobile sector Growth, Automobile sector
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