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Passenger Car Segment in India - The Changing Trends
Stiff competition in the automobile industry in India has opened the doors to a number of choices for the Indians, be it a luxury car or a premium compact. Global car manufacturers have set their bases in India and every other day we hear about some new car launch or the other. In 2010, the Indian automobile industry is expected to see witness a growth rate of around 12-14%.
The economic crisis in the past two years or so created quite a stir, but the Indian auto industry suffered the least of the consequences. In fact, the passenger car sector in India raced in top gear. Industry experts predict that the segment would grow at 10-14 per cent this year as compared to 26 per cent last year.
The economic crisis in the past two years or so created quite a stir, but the Indian auto industry suffered the least of the consequences. In fact, the passenger car sector in India raced in top gear. Industry experts predict that the segment would grow at 10-14 per cent this year as compared to 26 per cent last year.
The Past and the Present
The year 1991 brought economic liberalization in India which served as a boon for many businesses in the Indian automotive industry. Since then India has seen increased growth and fewer restrictions in the market. Various Indian car manufacturers like Tata Motors, Maruti Suzuki and Mahindra and Mahindra expanded their domestic as well as global operations.
The automobile industry in India is the ninth largest in the world and had an annual production of over 14,049,830 units in 2009-10. In the year 2009, India surfaced as Asia's fourth largest automobiles exporter, behind Japan, South Korea and Thailand. In the same year, the Automobile Domestic Sales increased to 12,292,770 units from 9,724,243 units in 2008-09.
The automobile industry in India is the ninth largest in the world and had an annual production of over 14,049,830 units in 2009-10. In the year 2009, India surfaced as Asia's fourth largest automobiles exporter, behind Japan, South Korea and Thailand. In the same year, the Automobile Domestic Sales increased to 12,292,770 units from 9,724,243 units in 2008-09.
Evolution
After the independence in 1947, the government of India and the private sector started their efforts to create an automotive component manufacturing industry to supply to the automobile industry. But it was only after 1970 that the Indian automotive industry started to grow. But then the growth was mainly concentrated in the by tractors, commercial vehicles and scooters categories. Then Japanese auto manufacturers entered the Indian scene and ultimately led to the establishment of joint ventures with Indian companies.
In the 1980s, quite a few leading Japanese manufacturers entered into joint ventures for manufacturing motorcycles and light commercial-vehicles. It was during this time that the Indian government formed a joint-venture with Suzuki to manufacture small cars for the Indian masses. Rest is history as they say. Since then automotive component and automobile manufacturing growth has accelerated and satisfied not only domestic demand but export needs too.
In the 1980s, quite a few leading Japanese manufacturers entered into joint ventures for manufacturing motorcycles and light commercial-vehicles. It was during this time that the Indian government formed a joint-venture with Suzuki to manufacture small cars for the Indian masses. Rest is history as they say. Since then automotive component and automobile manufacturing growth has accelerated and satisfied not only domestic demand but export needs too.
Exports
India has become one of the most preferred hubs for manufacturing small cars for a number of car makers. According to New York Times, the strong engineering base of the country and expertise in the manufacturing of low-cost, fuel-efficient cars has lured a number of car makers, such as Hyundai, Nissan, Volkswagen and Ford to set up their manufacturing plants in India.
In the last quarter of Financial Year 2009, 2010 Hyundai Motor India Ltd, the country's third largest car manufacturer and the largest passenger car exporter, achieved the feat of selling 162,273 units as compared to 121,565 units sold in the same period last year. In March 2010, exports grew 23,534 units in contrast with 21,405 units in same period a year ago. Even General Motors announced its plans of exporting about 50,000 cars manufactured in India by 2011.
In September 2009, Ford Motors also announced its plans to invest about US$500 million to set up a plant in India with the manufacturing capacity of 250,000 cars annually. This facility will be utilised for manufacturing cars for both domestic and export markets. The company also mentioned that the plant was a part of the plan to make India the centre for its global production operations. According to Bloomberg L.P., in 2009 India surpassed China as Asia's fourth largest exporter of cars.
In the last quarter of Financial Year 2009, 2010 Hyundai Motor India Ltd, the country's third largest car manufacturer and the largest passenger car exporter, achieved the feat of selling 162,273 units as compared to 121,565 units sold in the same period last year. In March 2010, exports grew 23,534 units in contrast with 21,405 units in same period a year ago. Even General Motors announced its plans of exporting about 50,000 cars manufactured in India by 2011.
In September 2009, Ford Motors also announced its plans to invest about US$500 million to set up a plant in India with the manufacturing capacity of 250,000 cars annually. This facility will be utilised for manufacturing cars for both domestic and export markets. The company also mentioned that the plant was a part of the plan to make India the centre for its global production operations. According to Bloomberg L.P., in 2009 India surpassed China as Asia's fourth largest exporter of cars.
Potential of the Automobile Industry
Seeing the growing Indian automobile market, many luxury car makers also made their foray in the country. The turnover of the entire industry in April-February 2009-10 stood at Rs. 1,62,708.77 crore as compared to Rs. 1,28,384.53 crore in the same period last year. India has lured a number of global car makers to establish their manufacturing plants here. Some of the car manufacturers who are making their vehicles here are Audi, BMW, General Motors, Fiat, Honda, Hyundai, Mercedes Benz, Mitsubishi, Volkswagen and Toyota.
India - The Second Biggest Car Buyer in the World
Easy loan options and reduction in the excise duties from the Indian government led to the high growth in the automobile industry. This led India to become the fastest growing automobile market in the world, just behind China. Society of Indian Automobile Manufacturers (SIAM) has said that the Indian automobile market will grow at the rate of 10-14% in this Financial Year.
Industry experts suggest that factors like the government sponsored stimulus package, low interest rates and the aggressive competitiveness of auto manufacturers to launch new models have played a pivotal role in this growth. China registered a growth of 42% last year and Germany witnessed 23% growth. And all these happened while the other markets in the world were having a negative growth in the market.
However, the floating automobile market in India is set to cool down relatively, and register a growth rate that would range in the low double-digits in 2010-11, mainly because of the high standard set in the previous year.
Industry experts suggest that factors like the government sponsored stimulus package, low interest rates and the aggressive competitiveness of auto manufacturers to launch new models have played a pivotal role in this growth. China registered a growth of 42% last year and Germany witnessed 23% growth. And all these happened while the other markets in the world were having a negative growth in the market.
However, the floating automobile market in India is set to cool down relatively, and register a growth rate that would range in the low double-digits in 2010-11, mainly because of the high standard set in the previous year.
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