AUTOMOBILE INDUSTRY IN INDIA

Prabhjot Singh Raghu Monga Robin Kumar Sandeepika Sharma

EVOLUTION IN INDIA

AUTO INDUSTRY
The year 1898 saw the first car rolling out, on the streets

of Mumbai.
A land of Premier Padminis, Ambassadors, scooters,

temps, trucks and autos galore, India had not seen much of choice in vehicles.
Since then Indian auto industry has witnessed a lot of

change.

PROTECTIONISM EARLY 1980s

The manufacturing of automobiles especially cars was

subject to strict licensing, restrictive tariff structure and limited avenues for expansion.
The foreign technology collaboration came with the

inception of Maruti Udyog in collaboration with Suzuki of Japan in the passenger car segment.
Indian roads saw the launch of Maruti 800. It was still not very easy to own a car, first was

affordability and next was a long waiting period.

LIBERALISATION 1990s
With liberalization, some more Japanese manufacturers

entered the two-wheeler and the commercial vehicle segment in a collaborative arrangement.
This period characterized joint ventures in India and the

market started opening up.

Automobile Industry was delicensed in July 1991 with

the announcement of the New Industrial Policy.

The passenger car industry was, however, delicensed in

1993.

 The era of controls and protection came to an

end.
Decrease in customs and excise duties meant

that a vehicles started getting affordable.

The entry of foreign banks with attractive auto

finance schemes helped garner a huge base of middle class population.

However the market was still ruled by the sellers.

GLOBALISATION 2000s
A Core Group on Automotive Research and Development

(CAR) was established in 2003 for encouraging R&D activities.

Indian economy also witnessed rapid industrialization.

Factories needed transport both for goods and for their employees.
Pushed the demand for efficient logistics and that in turn

increased the number of commercial vehicles.

MARKET SIZE

GROSS TURNOVER
YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 (IN USD MILLION) 20,896 27,011 34,285 36,612 38,238

Source: Society of Indian Automobile Manufacturers (SIAM)

RECENT FACTS & FIGURES

In 2010-11, the overall domestic passenger car sales

rose by 29.73 per cent to 19,82,702 units from 15,28,337 units in the previous fiscal.
Hyundai Motor India also saw its market share

declining to 18.10 per cent in FY 2011 from 20.61 per cent in the previous year.
Tata Motors too lost its market share during the said

period, falling to 12.92 per cent with sales of 2,56,202 units.

General Motors India (GMI) and Honda Siel cars India

(HSCI) also lost their market share last fiscal. While GMI's share fell to 4.40 per cent from 4.62 per cent,

MAJOR PLAYERS IN THE INDUSTRY

Mahindra & Mahindra Limited Hyundai Motor India

Maruti Suzuki India Ltd

Ashok Leyland

OTHER PLAYERS IN THE INDUSTRY

TATA Motors

The Bajaj Group

Hero Group

Ford India

GLOBAL PLAYERS IN INDIA

Audi

Honda
Mercedes Ferrari Nissan BMW

MARKET SHARE OF MAJOR PLAYERS

MARKET SHARE
Maruti Suzuki India: Passenger Vehicles

46.07%
Hyundai Motor India: Passenger Vehicles

14.15%
Mahindra & Mahindra: Commercial Vehicles

10.01%, Passenger Vehicles 6.50%, Three Wheelers 1.31%

Ashok Leyland: Commercial Vehicles 22%

MARKET SHARE OF DIFFERENT VEHICLES IN THE INDIAN AUTOMOBILE INDUSTRY

Passenger Vehicles : 15.86% Commercial Vehicles : 4.32%

Three Wheelers : 3.58%

Two Wheelers : 76.23%

CHALLENGES
Rising oil price Human resources Nurturing Talented Chinese Competition Environmental Issue Low R&D Orientation Rising cost of raw Fuel Technology

Manpower
materials
Too much competition

Increasing rates of

interest

IMPACT OF GLOBAL CRISIS ON INDUSTRY

The automotive industry crisis of 20082010 was a

part of a global financial downturn

The crisis affected European and Asian automobile

manufacturers, but primarily felt in the American automobile manufacturing industry

Citing falling production numbers, the State Bank of

India reduced interest rates on automotive loans in February 2009

Manufacturer hopes the low cost will encourage

customers to purchase the vehicle despite the ongoing credit crisis

RECENT TRENDS
Unlike in the past, the Indian Government has

gone through a total role reversal by becoming the enabler rather than the controller.
In the recent past it has started providing better

infrastructure, conducive atmosphere to attract investments and implementing growth oriented economic policies.

 Competition: Immense pressure has grown on

the Indian companies. A lot of joint ventures have taken place, some others have invested heavily on R&D.

 Customer: Armed with higher buying power and

an ever increasing expectation from products and services, the customer is undoubtedly the king and has propelled a fierce competition among the major players in the market.

 Safety Norms: cars as well as two-wheelers

have met the most stringent international norms of pollution. Euro II vehicles have become the norm of the day all over India. Unfortunately, in the Indian context, safety in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of adequate safety features in the vehicles such as airbag and crumple zone needs immediate attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory.

 Bikes: Keeping apace with the global trends the

two-wheeler segment has witnessed tremendous growth both qualitatively and quantitatively. Bikes with higher engine capacities have done commendably well on the Indian roads. Bike styling and fuel efficiency has also seen major developments

THANK YOU