RE: AUTOMOBILE INDUSTRY IN INDIA
||Idian Automobile Industry
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Indian automobile industry has grown leaps and bounds since 1898, a time when car touched the Indian streets for the first time. Now it is the one of the major industrial sector in India.Subsequent to the liberalization , the automobile sector has been aptly described as the sunrise sector of the Indian aconomy as this sector has witnessed tremendous growth. It contributes about 4% in India’s GDP and 5% in India,s industrial production. This sector has generated about 4.5 Lack of direct employment and about 1 crore of indirect employment.
The Indian automobile segment can be divided into six segments . two-wheelers (motorcycles, geared and ungeared scooters and mopeds), three wheelers, commercial vehicles (light, medium and heavy), passenger cars, utility vehicles and tractors.
At present it holds a promising tenth position in the entire world with being No. 1 in Two wheelers and No. 4 in commercial vehicles.According to the industrial policy 1991 no industrial licence is required for setting of any unit for manufacture of automobiles except in some special cases.Now 100% Foreign Direct Investments permissible.The technology on royalty payment of 5% without any duration limit.
Investments related details:
• Chrysler is setting up a local sourcing unit in Chennai and is expected to start sourcing for its global plant .
• Palfinger AG, the Austrian hydraulic lifting, loading and handling systems manufacturer, has joinedhands with Western Auto LLC, Dubai, the vehicle dealership arm of ETA Star group, have invested US$ 1.7 million to set base in India.
• IFCI Venture Capital Funds Ltd is launching a private equity fund in association with German consultancy UBF-B worth US$ 144.67 million focussed entirely on domestic automotive components industry.
• The world’s third largest auto components maker, Magna International Inc., plans to bring two more group companies to India and is considering the Gurgaon, Chennai and Pune regions for these manufacturing facilities.
• Auto parts maker Robert Bosch of Germany will invest US$ 201.4 million in its Indian subsidiaries over the next two years.
• Ashok Leyland and Nissan Motor have invested US$ 500 million in three joint ventures to manufacture light commercial vehicles (LCVs), LCV engines and power train components. Not only global investors, Indian component companies are also pumping in huge sums into expanding operations
Automobile exports of India:
While India has managed to be the 7th largest producer of vehicles in the world but it remains a small player in the global market, observed FICCI Study on Indian Automobile Exports. The share of India in global automobile exports is a meager 1% in 2009 and India ranks 22nd in automobile exports falling behind countries like Thailand, China, Mexico, Argentina, Brazil and Turkey, noted FICCI Study. Despite this, Indian automobile industry is confident of achieving its export target of $12 billion 2013-14 itself, which will be good two years ahead of the target year of 2016 laid-out in Automotive Mission Plan 2006-16. Currently, India exports $ 4.5 billion of automobiles which include tractors, passenger vehicles, commercial vehicles and two-wheelers.
The automotive industry remains one of the highest revenue-earning industries in India and contributed over 5% to India’s GDP in 2009, providing direct and indirect employment to more than 13 million people. The market outlook for the industry remains promising, especially in the small car segment. The Indian automobile market is currently dominated by the two-wheeler segment but with an expanding middle class population, growing earning power and industrial development, the demand for passenger cars and commercial vehicles will increase exponentially.
Also, the low vehicle presence (with passenger car stock of only around 11 per 1,000 population in 2008) indicates a very low base with significant growth potential. As per ‘Just-Auto’ analyst reports, sales of passenger cars in 2008-2016 are expected to grow at a CAGR of around 10%.
In addition to increased domestic demand, there is also likely to be increased investment by global auto manufacturers to India due to its strong technological capability and availability of trained manpower at competitive prices. Currently, the foreign auto companies with assembly plants in India include, General Motors, Ford, Hyundai, Honda, Suzuki, Nissan Motors, Toyota, Volkswagen, Audi, Škoda, BMW, Fiat and Mercedes Benz.