Chapter Four: Progress of Automobile Industry - Jayakar ...
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Chapter Four:
Progress of Automobile
IndustryPAGE NO.
Contents of Chapter Four
Chapter IV Progress of Automobile Industry 187-246
4.1) Researcher’s Overview 187
4.2) Introduction 187
4.3) Etymology 188
4.4)History of Automobile Industry in the World 189
4.4.1)History of Automobile Industry in the 192
Japan
4.4.2) History of the Automobile Industry in 192
America
4.4.3.) History of the Automobile Industry in 193
India
4.4.4) Landmark of Indian Automobile 207
Industry
4.5) Classification of Vehicles in India 208
4.5.1) Two-Wheelers
208
4.5.2) Three Wheelers
211
4.5.3) Four Wheelers
2124.6) Study of the Performance of Indian 216
Automobile Industry
4.6.1) Indian Automobile Production 216
4.6.2) Indian Automobile Export 220
4. 6.3) India's Position in the Global Auto 224
Industry
4.6.4) Where India's auto Industry Scores over 225
the others?
4.6.5) What makes the Indian Auto Market 225
attractive?
4.6.6) The Future of Indian Auto Industry 228
4.6.7) Vision 2020' of ACMA
229
4.6.8) Indian Automobile Industry SWOT
Analysis 231
4.6.9) Indian Auto Industry - Joint Ventures 232
4.7) Some of the Salient Recommendations for 234
the Government
4.8) Automobile Industry in Maharashtra 237
4.9) References 2434.1) Researcher’s Overview
This chapter highlights history of Automobile Industry of India and
Maharashtra, also the present position of this Industry. The scope of
Automobile Industry in the near future is also explained.
4.2) Introduction
Transport sector is the backbone of country's economic growth and
development. Transportation throughout the world has made possible an
unprecedented level of mobility across the geographical boundaries. The
mobility has given many people more options about where to live, and
work than they had years ago. Similarly, mobility has broadened the access
the business to new markets and more choices by increasing the available
pool of resources. From the economic point of view, transportation is a
vital factor for steady economic growth and development. The trade
facilitated by transportation has been a growing component of national
income in all the countries. Studies show that the contribution of
transportation in GDP has a positive impact. The structure of the economy
also influences the transport system because consumer expenditure on
transportation contributes to national economy. Transport sector is equally
important for both industrialized and developing economies. Transport
sector including water transport, aviation and surface transport are major
players of Gross Domestic Product (GDP), which includes the value of all
goods and services. Being the largest transport networking in the world,
particularly in road transportation, automobile industry plays a significant
role in the GDP of the country.
187Automobile industry is a major constituent of surface transport.
Automobiles as a commodity include passenger cars: Commercial
vehicles, three wheelers and two wheelers.
India has growing market potential for automobiles due to rise in
demand. As a result more and more manufacturers are bringing in new
forms of the existing product because diffusion of a new product depends
upon demand statistics. Automobile manufactures, particularly car
manufacturers are attracting buyers with new model shopping to tap
growing demand for automobiles. Utility vehicles also posted significant
growth. Further, two and three wheelers industries specially the motor
cycle segments have shown a steep jump, while the volume growth of all
the players has recorded pretty good market share. Therefore, automobile
industry has been selected for this study in order to determine its financial
and operational performance during the study period. In this study
researcher focuses on automobiles such as commercial vehicles, passenger
cars and multiutility vehicles and two and three wheelers.
4.3) Etymology
The word automobile comes, via the French automobile, from the
Ancient Greek word autoq (autos, "self") and the Latin mobilis
("movable"); meaning a vehicle that moves itself, rather than being pulled
or pushed by a separate animal or another vehicle. The alternative name car
is believed to originate from the Latin word carrus or carrum ("wheeled
vehicle"), or the Middle English word carre ("cart") (from Old North
French), or from the Gaulish word karros (a Gallic Chariot).
An Automobile, motor car or car is a wheeled motor vehicle used for
transporting passengers, which also carries its own engine or motor. Most
188definitions of the term specify that automobiles are designed to run
primarily on roads, to have seating for one to eight people, to typically
have four wheels, and to be constructed principally for the transport of
people rather than goods.
The term motorcar has also been used in the context of electrified rail
systems to denote a car which functions as a small locomotive but also
provides space for passengers and baggage. These locomotive cars were
often used on suburban routes by both interurban and intercity railroad
systems.
There are approximately 600 million passenger cars worldwide (roughly
one car per eleven people). Around the world, there were about 806 million
cars and light trucks on the road in 2007; they burn over a billion cubic
meters (260 billion US gallons) of petrol/gasoline and diesel fuel yearly.
The numbers are increasing rapidly, especially in China and India.
4.4) History of the World's Automobile Industry
The automobile as we know, it was not invented in a single day by a
single inventor. The history of the automobile reflects an evolution that
took place worldwide. It is estimated that so many patents created the
modern automobile. However, we can not to the many firsts that occurred
along the way several Italians recorded designs for wind driven vehicles.
The first was Guido Da Vigevano in 1335. Vaturio designed a similar
vehicle, which was also never built. Later Leonardo Da Vinci resigned
clockwork driven tricycle with tiller steering and a differential mechanism
between the rear wheels.
189A Catholic priest named Father Ferdinand Verbiest has been said to
have built a steam powered vehicle for the Chinese Emperor Chine.' Lung
in about 1678. Since James Watt didn't invent the steam engine until 1705
it is guessed that this was possibly a model vehicle powered by a
mechanism like Hero's steam engine, and on the cobble stone streets of
Pans this was probably as fast anyone wanted to go it.
The early steam powered vehicles were so heavy that they were only
practical on a perfectly flat surface as strong as Iron. A road thus made out
of iron rails became the norm for the next hundred and twenty-five years.
The vehicles got bigger and heavier and more powerful and as such they
were eventually capable of pulling a train of many cars filled with freight
and passengers.
Many attempts were being made in England by the 1830's to develop a
practical vehicle that didn't need rails. A series of accidents and
propaganda from the established railroads caused a flurry of restrictive
legislation to be passed and the development of the automobile bypassed
England. Several commercial vehicles were built but they were more like
trains without tracks the development of the internal combustion engine
had to wait until a fuel was available to combust internally. Gunpowder
was tried but did not work out. Gunpowder carburetors are still hard to
find. The first gas really did use gas. They used coal gas generated by
heating coal in a pressure vessel or boiler. A Frenchman named Etienne
lenoir patented the first practical gas engine in Paris in 1860 and drove a
car based on the design from Paris to Joinville in 1862. His one-half
horsepower engine had a bore of 5 inches and a 24 inch stroke. it was big
and heavy and turned 100rpm.
Lenoir had a separate mechanism to compress the gas before
combustion. In 1862, Alphonse bear de Rochas figured out how to burn,
which is the way we still do it. This process of bringing the gas into the
190cylinder, compressing it, combusting the compressed mixture, then
exhausting it is known as the Otte cycle, or four cycle engine. Lenoir
claimed to have run the car on benzene and his drawings show an electric
spark ignition. If so, then his vehicle was the first 1871, Dr. 3. W. Carhart,
professor of physics at Wjsconsm University, and the J. I. Case Company
built a working steam car.
By 1390 Ransom E. Olds had built his second steam-powered car. One
was sold to a buyer in India, but the ship it was on was lost at Running by
February, 1893 and ready for road trials by September, 1893 the car built
by Charles and Frank Duryea, brothers, was the first gasoline powered car
in America. The first run on public roads was made on September 21, 1893
in Springfield, MA.
Henry Ford had an engine running by 1893 but it was 1896 his first car.
By the end of the year Ford had sold is first car which he called a
Quadracycte, for $200 a no used the money to build another one with the
financial backing of the Mayer of Detraft. William C. Maybury and other
we wealthy Detrotters, Ford formed the detroit automobile company in
1899. A few prototypes were built but no production cars were ever made
by this company. It was dissolved in january 1901. Ford would not offer a
car for sale until 1903.
Olds build first petrol-powered car. This car was running by 1856 but
production of the olds motor vehicle company of Detriot did not begin
until 1899. After an early failure with luxury vehicles they established the
first really successful production with the chassis carved Dash old mobile.
It sold for $550. In 1901 600 were sold and the next years were 2902-2500,
1903-4,000, and 1904-5000. In august 1904 Kerson olds left the company
to form Reo (for Ransom El olds).
191It dos was the first mass producer of gas online powered automobiles in
the United states, even though duryer was the first auto manufacturing with
their 13 cars.
The rolls Royte Silve Ghost of 1906 was a six cylinder car that in
production until 1925. It represented the best engineering and technology
available at the time and these cars still run smoothly and silently today.
This period marked the end of the beginning of the automobile.
4.4.1) History of the Japan Automobile Industry:
The first Japanese car manufacturing companies at a full scale was
established by Nissan Automobile in 1933 and by Toyota Automobile in
1937.
In the fifties and more years since the Japanese began producing cars
domestically, Japanese automotive technology has made remarkable
progress and come to be one of the international was 1980 Japan became
the top automobile-producing country the world The domestic auto
industry has grown to the point where it Is today one of the key industries
supporting the Japanese economy. Today, looking further toward the
twenty-first century, utilizing new materials, high-tech electronics, new
power sources, and artificial intelligence, the type of car which automakers
are capable of producing cannot even be imagined.
4.4.2) History of the Automobile Industry in America:
Charies E. and J. Frank Duryea, two brothers from rural Illinois, were
the founders of the American automobile Industry. The Duryea Motor
wagon company was the first company organized in the United States for
the manufacture of automobiles the automobile has changed the way
people live and work all over the world. In America very few people had
cars prior to Henry Ford's assembly line this one industrial marvel was
192instrumental in changing America from a rural, agricultural way of life to
an urban, more industrial way of life.
Nissans’ production strategy include having suppliers ford features and
components in the same sequence as, the vehicle, are focused and the
production line, in increasing numbers, suppliers support services also are
locating plants adjacent to, or near one new Niasan plant. By late
November 2001, Nissan had announced the Intention of nearly a dozen
suppliers to build new giants. As well as the development of a supplier
logistics center and formation of a transportation services company.
4.4.3) History of the Automobile Industry in India
Inception - 1940s to 1990s
In 1940s the Indian automotive industry was at a very nascent stage. An
embryonic automotive industry emerges in India.
In the initial years after independence Indian automobile industry was
plagued by unfavorable government policies. All it had to offer in the
passenger car segment was a 1940s Morris model called the Ambassador.
In 1953, government of India and private sector came together to build an
automotive component manufacturing industry to meet the rising needs of
the automobile industry. Nonetheless the growth was not on the expected
lines, rather relatively slow in the 1950s and 1960s due to the prevalence of
nationalization and license raj. Jamsetji Tata and the other three also by
Parsis. That same year, the first pneumatic tires arrived in Bombay, with
Dunlop opening an office in the city.
Madras, it would appear, lagged behind, though it is related that a car was
seen on Mount Road on a brief outing in 1894. If that unconfirmed
appearance is ignored, the first recorded date of a car being in regular use
193in Madras is 1901. The car was owned by A J Yorke, a director of Parry &
Co. He drove it daily from Ben's Gardens, Adyar, to Parry's in 'Black
Town'. The South's first registered car, MC-1, belonged to Francis Spring,
at that time Secretary of the Madras Railway Board and, in 1904, to
become the Chairman of the Madras Port Trust and 'father' of the Madras
Harbour. The first Indian-owned car was in Madras, MC-3, wag building
contractor T Namberumal Chetty's.
In 1903, Samuel John Green of Simpson & Co, Madras, built India's first
steam car and caused a sensation on the roads of the city. Two years later,
Simpson's built the first steam bus. It ran between Bezwada (Vijayawada)
and Masulipatam (Machilipatnam) in what was possibly the first motor bus
service in the country.
When TVS commenced operations in 1912, motor transport received a
fillip in South India. The firm was founded by T V Sundram Iyengar to
operate a bus service. T V Sundram Iyengar and Sons Ltd (now Sundaram
Motors) became a vehicle dealer in 1922 after the lifting of Government
restrictions on imported vehicles of all types had been put in place during
the Great War (1914-18). By 1920, the number of imported vehicles of all
types had grown to nearly 13,500 and two international automobile
manufacturers, Ford and General Motors, sensing the potential, set up local
companies that year to sell and service their motor cars and trucks.
In 1928, General Motors India Ltd commenced assembling trucks and
cars in its factory in Bombay, the first car assembled in India rolling off the
assembly line on December 4th. Two years later, Ford Motor Co of India
Ltd commenced assembly of automobiles in Madras, and the next year in
Bombay and Calcutta. And in 1936, Addison & Co Ltd commenced
assembly of cars and trucks in Madras.
Hindustan Motors Ltd, Calcutta, and Premier Automobiles Ltd,
Bombay, were established in 1942 and 1944 respectively to progressively
194manufacture complete automobiles. Hindustan Motors, a Birla group
company, began manufacturing operations in 1948 by assembling Morris
Oxford cars and Bedford trucks, gradually indigenizing the components. In
1957, the Morris Oxford, substantially indigenized, was re-introduced as
the Hindustan Ambassador.
Premier Automobiles Ltd (PAL) was promoted by Walchand
Hirachand, in collaboration with the Chrysler Corporation of the US. In
March 1947, the company began assembling Chrysler products: Dodge,
De Soto, and Plymouth cars and Dodge, De Soto and Fargo trucks.
Indigestion started in 1949 with the manufacture of radiators, mufflers,
springs, propeller shafts, shock absorbers, etc.
In 1950 PAL entered into collaboration with Fiat, SpA of Italy and
started assembly of Fiat 1100 cars. In 1953, following the Tariff
Commission report, the Government of India granted protection to the
automobile industry, thus enabling Premier Automobiles to step up its
manufacturing program with full vigour and, in 1954, the first Indian-made
'Fiat 1100' cars rolled out.
In the early years of the automotive industry, more attention was paid to
manufacturing cars than buses and trucks. The progressive manufacture of
Tata-Mercedes-Benz diesel trucks and buses in India began in Poona in
October 1954, after Tata Motors and Daimler-Benz had tied up. And the
next year Ashok Leyland began manufacture of its Comet trucks. Fords
and General Motors, not confident of indigenizing production, may have
pulled out, but the Indian manufacturers confidently forged ahead. And the
Indian Automobile Industry had by the late 1950s put down firm roots.
Starting in the 1950s with the
Automobile Products of India (API) that manufactured the Lambrettas
and Bajaj Auto Ltd. with its association with Piaggio of Italy
(manufacturer of Vespa scooters).
195Automobile Products of India (AUTOPRD) was founded in 1949. The
company manufactured Lambretta scooters and ancillaries under licence
but has not been operational since 2002. Most of the scooters were sold
under the Lamby brand name while the ancillaries usually bore the API
moniker.
It was in the year 1954 that the Indian government ordered for total
number of 800 motorcycles to man the Pakistani borders. In came the
Bullets which were initially launched in England as a 350cc bike and it was
upgraded to 500cc a year or so later. These bikes have remained unaltered,
barring some cosmetic changes which have undergone over the years.
Thus one can say without much of a doubt that the 1955 Bullet was one of
the initial hits of the Indian two-wheeler industry and till today it continues
to be a darling of the motorcycle enthusiasts.
Enfield Bullet had a close competition with another sturdy bike named
Rajdoot; as the bike was strong enough to handle the rough Indian roads.
The company had roped in Indian He-man Dharmendra for the promotion
of the bike. With more than 1.6 million vehicles on the road the Rajdoot
motorcycle was one of the initial hits of the earlier years of two-wheeler
history in the country.
Ideal Jawa (India) Limited popularly known as JAWA started
operations in the year 1960 with the main objective to manufacture
motorcycles among other things. The idea was to deliver to the consumers
a product that defined value for money.
The logo "For Ever Bike For Ever Value" very aptly signifies the
ideology behind the product. This motive remains unchanged to this day,
even in the face of stiff competition.
196JAWA started commercial production of motorcycles in the year 1961
in technical collaboration with Jawa Limited of erstwhile Czechoslovakia
and during the years 1961 to 1985 put up a good performance and achieved
good profitability levels. The peak capacity utilization was 85% with
36,000 vehicles on a capacity of 42,000 vehicles per annum. The
collaboration agreement with JAWA of Czechoslovakia which, among
other things ensured continuous availability of technical knowledge from
the said collaborator ended in 1968, by which time JAWA had established
an in house expertise for achieving wholly indigenous manufacturing
technology and also design of vehicles known under the brand name of
"YEZDI".
JAWA had established market and had brand loyalty in Southern,
Western and Northern regions and till 1985-86, they were in the seller's
market. It was now that there was an aggressive entry into the domestic
market by Japanese technology backed vehicles of 100cc category which
were more fuel efficient, with sophisticated design, and state-of-the-art
technology.
The Bajaj Group was formed in the first days of India's independence
from Britain. Its founder, Jamnalal Bajaj,
The precursor to Bajaj Auto had been formed on November 29,1945 as
M/s Bachraj Trading Ltd. It began selling imported two- and
three-wheeled vehicles in 1948 and obtained a manufacturing license from
the government 11 years later. The next year, 1960, Bajaj Auto became a
public limited company.
Rahul Bajaj reportedly adored the famous Vespa scooters made by
Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for
the make; Bajaj Auto began producing its first two-wheelers the next year.
197He lived next to the factory in Pune, an industrial city three hours' drive
from Bombay. By 1970, the company had produced 100,000 vehicles. The
oil crisis soon drove cars off the roads in favor of two- wheelers, much
cheaper to buy and many times more fuel-efficient.
A number of new models were introduced in the 1970s, including the
three-wheeler goods carrier and Bajaj Chetak early in the decade and the
Bajaj Super and three-whegled, rear engine Auto rickshaw in 1976 and
1977. Bajaj Auto produced 100,000 vehicles in the 1976-77 fiscal year
alone.
The technical collaboration agreement with Piaggio of Italy expired in
1977. Afterward, Piaggio, maker of the Vespa brand of scooters, In 1963,
the cars had a little more local content. The 2 tone combinations or paint
were not offered anymore, and the front sidelights were now of the single
bulb design, (62 had larger dual bulb units). The dash now was covered
with a wood veneer sheet, and local Yenkay meters were incorporated
(separate Speedo, fuel guauge, and amp). The switches were now black.
In late 69-70, the factory had indigenously developed a station wagon
version, called the Herald Mark III Companion. Extremely rare, it featured
a fiberglass tailgate and roof. These cars had bonnets with twin headlights
just like the Vitesse. These cars are practically nonexistent today.
Finally in 71, the Gazel was indigenously developed. While based on the
mk III, it featured the live rear axle and suspension from the Toledo. This
was because the herald’s rear suspensions were just not suitable for Indian
roads, and were notorious for axles cracking. The car was Indians first
indigenous design, designed by Nazir Hussein.
Then in 1981, STAMPRO bought the tooling for the Rover SD1, and
began production, but with a 1991cc vanguard engine! The car was a
miserable failure, with a lot of people putting down deposits, and getting
no refunds after production ceased! There were plenty of problems with
198the employees, who were on strike for years! In fact, just last month there
was a tender floated in the newspaper announcing that the banks are
auctioning off whatever remains of the factory, the final nail in the coffin.
1980 to 1990 - Japanese Autos Invades India (Maruti and M-800)Maruti
Udyog's inception came in the country in 1981 under the provisions of the
Indian Companies Act, 1956. During this era, scooters or two-wheelers
had a long waiting as industrial production was low in numbers. There
were only two car models in the name of Indian car industry, Hindustan
Ambassador and Fiat Padmini. Later, Maruti Suzuki made a successful
move with its ever running Maruti 800 in 1983. With the launch of Maruti
800, Indian manufacturing and car industry saw a new dawn. 1983 -
(Hindustan Contessa)The Hindustan Contessa is a model of car
manufactured by Hindustan Motors of India, utilizing the tooling of the
British 1972-1978 Vauxhall Victor FE/VX series. It was a popular choice
for government limousines. It was one of the few Indian manufactured
luxury cars in the market in 80's and early 90's. The production of this car
was stopped in 2002.
(Maruti Gypsy) lt was introduced in the Indian market in 1985 with the
970cc F10A Suzuki engine and was an instant hit in the civilian market as
well as with law enforcement. It was codenamed MG410 that stood for
Maruti Gypsy 4 cylinder 1.0 liter engine - Production and Launch of first
light commercial vehicle, Tata 407, indigenously designed Hero Honda -
CD 100 and Sleek ,1983 Joint Collaboration Agreement with Honda
Motor Co. Ltd. Japan signed Shareholders Agreement signed and 1984
Hero Honda Motors Ltd. Incorporated and 1985 First motorcycle "CD
100" rolled out ,1987 100,000th motorcycle produced and 1989 New
motorcycle model - "Sleek" introduced Hero Honda CD 100 was launched
in the year 1985. As soon as it was launched, it was a total hit. The design
199and everything was superb and the fuel consumption was too less which
made this bike the best bike in India.
1986 - Fiat 118NE The Fiat 124 was introduced in India by Premier
Automobiles in 1986 as the Premier 118NE. At the end of production an
improved model called Viceroy was released in collaboration with
Peugeot, France. Later on it was outmoded by other modern cars and
production was stopped in 2001. A few well maintained versions are still
found today.
1981 - Bajaj M-50 & 1986 - Bajaj M-80 Since the mid-1980s, the Bajaj
M80 has been the best selling step-thru' even though more technologically
advanced and refined rivals were launched in the intervening years. The
M80 saw light of day as the M50 back in 1980. Over the twin decades since
she has seen a hike in capacity to 80cc and after weathering initial
bugbears, claimed market recognition as a strong, rugged product capable
of withstanding sustained abuse. This ruggedness was coupled to very
good fuel economy that made her the darling of rural folk while at the same
time appealing to the urban masses.
1986, Kawasaki Bajaj KB 100 the KB100 was Bajaj Auto's response to
the opening up of the Indian markets to Japanese collaboration. Bajaj Auto,
had lead in the manufacture of scooters partnered with Kawasaki to bring
in the KB100. Production began in 1986-87 and went on till 1996 when the
KB125was launched.
1990 - Bajaj Sunny
The Bajaj Sunny was a scooter produced and sold in India. Bajaj Auto no
longer produces this vehicle.
Force Motors - Till 1990
Force Motors founded in 1958 as Bajaj Tempo Ltd. is a manufacturer of
three wheelers, multi- utility and cross country vehicles, light commercial
200vehicles, tractors, buses and now heavy commercial vehicles. Abhay N.
Firodia is the Chairman & Managing Director.
The Maruti 1000
The Maruti 1000, made by Maruti Udyog was the first ever
contemporary sedan-type car launched in India. The car was introduced in
October, 1990. Sold at Rs. 3.81 lakh, it was back then the costliest car
released in the Indian market. With a large waiting list for all Maruti cars, a
computerised lottery was used to decide who got a chance to buy a Maruti
1000. The car came with a 970 cc engine whose output was just 45 bhp and
proved underpowered for a car that weighed 850 kg.
Indian Auto Industry in 90s
The automobile sector in India underwent a metamorphosis as a result of
the liberalization policies initiated in the 1991. Measures such as relaxation
of the foreign exchange and equity regulations, reduction of tariffs on
imports, and refining the banking policies played a vital role in turning
around the Indian automobile industry. Until the mid 1990s, the Indian
auto sector consisted of just a handful of local companies. However, after
the sector opened to foreign direct investment in 1996, global majors
moved in. Automobile industry in India also received an unintended boost
from stringent government auto emission regulations over the past few
years. This ensured that vehicles produced in India conformed to the
standards of the developed world.
Maruti launched a few more models in the form of Maruti 1000 (a sedan,
the predecessor of the now-discontinued Esteem) and a super stud, the
Gypsy. Meanwhile, PAL (makers of Padmini) had tied up with French car
major Peugeot; and HM had given the Amby quite a few nose jobs
201(ironically Amby still doesn't look far different from the original Morris
Oxford despite the facelifts). They also had filler, the Coritessa which
didn't make a fortune for them like the Ambassador did. PAL failed with
the Peugeot 309 and also failed to keep up the development pace for the
Padmini, while Maruti had just discovered another masterpiece, the Zen.
Nothing noteworthy happened till 1996, when a few foreign manufacturers
decided to set up shop here. The major ones Fiat, Hyundai and Daewoo
launched Uno, Santro and Matiz respectively. Ill- fated Fiat India has
struggled to make an impression from day one. The Santro became an
unbeatable package because of the top-notch quality and service (and
partly because of Shahrukh Khan's endorsement!) A new war was waged.
We all know it as the "small car war". Everybody wanted to have a piece of
the pie, and the Santro was the car to beat. Maruti launched the Wagon R
with drastically unconventional looks which took a while to catch up.
Improvements in road infrastructure led a few more manufacturers to
India. Those were Ford, General Motors (Opel), Honda and Toyota;
however none of them tried their luck with a small car. Those who did were
going to lead the Indian automobile industry.
The Tata Sierra or Tata Sierra Turbo was a sport utility vehicle produced
by Tata Motors of lndia.lt was the first automobile fully designed and
produced in India. The vehicle also forms the basis for DC Design's Arya
Concept vehicle. The Sierra is powered by a 1.9 turbo diesel. Initially it
had naturally aspirated engine but latter version were Turbo-charged. The
Sierra Turbo is believed to be the first turbo charged engine on cars in India
at the time. Being the first automobile from Tata Motors, part of the India's
largest industrial house the Tata Group and better known for its dominance
in the commercial vehicle segment, the Sierra is a concept suited to Indian
conditions of driving. This is the first diesel vehicle to be accepted as a
personal car in that country without the derogatory connotations associated
202with diesels. The design though not class leading is quite acceptable. It
featured some firsts in India, such as adjustable steering. Engine noise is
also remarkably well suppressed, while cruising in top gear it is difficult to
tell that the power train under the hood is a diesel one. Other features
included power windows, power steering and a tachometer. The body is
very sturdy and so is the chassis. Durability is the hallmark of this machine.
The Tata Sierra is no longer in production.
1991: Introduction of Mahindra Commander, 1992 Launch of the Tata
Estate. Tata Motors launched Tata Estate in 1992. The car was equipped
with coil spring rear suspension and provided a spacious and a comfortable
ride. It was the company's first attempt at building a car. The car was
considered fairly advanced during its time and had many features which
were not common among cars in India at the time including power
windows, power steering and a tachometer. The car was a replica of
Mercedes-Benz Estate, though in looks it resembled it, an unassailable gap
existed in the performance. Tata Estate did better than what many had
anticipated it would but not well enough to be continued in the market. The
car had the TATA 207 Engine.
1994 Launch of Tata Sumo - the multi utility vehicle
This was first launched in 1994 and deluxe version came in 1997 and
was one of the first passenger vehicles designed in India. The Sumo
received an extensive facelift in 2004 and was renamed the Sumo Victa in
face of competition from relatively modern competitors.
The Sumo is based on Tata Motors' 207 pick-up platform and thus,
shared most of its other mechanics with other Tata vehicles like the Tata
Sierra, Tata Estate, Tata Tata mobile, Tata Telcoline (TL) and Tata .207DI.
In 1994, the Tata Sumo originally came with a 1948cc normally aspirated
203diesel engine. Later, an option of a turbo charged version of the same
engine was also offered.
1993 - Maruti Zen
Maruti Zen has acquired significant popularity in India since the
nameplate was first introduced in 1993. The word "ZEN" is an acronym
standing for Zero Engine Noise. It also stands for the Japanese word "Zen"
which derives from the Sanskrit word "Dhyana" and means "To figure out
something by meditation or by a sudden flash of enlightenment."
It underwent a facelift in 2003. The production of this model ended in
March 2006.
1994 - Maruti Esteem
The Esteem was introduced in the global market in 1995 as Suzuki's first
attempt in the compact segment.
It was pulled from the market in Europe and North American in 2002, after
one year of overlapping. The car remained available in many developing
countries, including India and Southeast Asia, where it was sold until
2007, when production stopped at the Maruti factory, with the assembly
line giving way to the SX4 Sedan.
1995 - Ford Motors and Honda in India J996-Ford Escort
Mahindra Ford India Limited, a 50:50 joint venture company between
Ford Motor Company and Mahindra & Mahindra Ltd got the government
approval in November 1995 and subsequently, the first locally
manufactured car Ford Escort was sold in within 10 months of their
existence in India.
2041996 - Honda City
Honda Siel Cars India Limited (HSCI) is a joint venture between the
Honda Motor Company of Japan and Siel Limited, a Siddharth Shriram
Group company. It was begun in December 1995. The venture was begun
with the aim of delivering Honda's passenger car models and technologies
to the Indian market. The third-generation Honda City, codenamed SX8,
was based on the EF Civic platform. It was designed for and sold in the
South East Asian market only.
1997 - Fiat Uno
After an abortive launch in 1996 when its CKD joint partner PAL
delivered only 617 cars of the 30,000 ordered, Fiat started its venture as a
50-50 Industrial Joint Venture between Fiat Group Automobiles S. p. A.
(Fiat) and Tata Motors Limited in January 1997.
1998 Tata Safari & Indica Launched
Tata Safari- India's first sports utility vehicle launched. It was released
with a 1.9-litre Turbo Diesel engine.
The Safari had 87 PS (64 kW) power. It came with a synchromesh
forward five-speed gearbox, with a 4X4 option. However, it was regarded
to be grossly underpowered, with a heavy body rollover.
Tata Indica - India's first fully indigenous passenger car launched.
It is the first passenger car vehicle from Tata Motors. The Tata Indica is
also considered India's first indigenously developed passenger car. On 30
December 1998, Tata Motors (previously called TELCO) introduced the
most modern car ever to be designed by an Indian company: the Indica.
Marketed with slogans like "The Big... Small Car" and "More cars per car,"
the ad campaign focused on roomy interiors and affords ability. Within a
205week of its unveiling in 1999, the company received 115,000 bookings. In
two years, the Indica became the number one car in its segment.
Hyundai in India
1996 - May 6 - Hyundai Motor India Ltd. incorporated.
1996 - December 10 - Ground-breaking ceremony at the Irrungattukottai
plant near Chennai. May 27 - Pilot production of Santro at plant begins
within a record 17 months of ground breaking.
1998 - September 23 - Hyundai Santro (Atos Prime) makes its world debut
in India.
The Hyundai Autos (Arnica in the UK, Santro Xing in India) is a city car
produced by the Hyundai Motor Company. The original Autos were
introduced in 1997. In 1999, it was joined by the less controversially styled
Autos Prime. It uses the G4HC Epsilon straight-4 engine. The mkll version
comes with a 1086 cc G4HG engine. It is one of the best selling models in
India.
1998, Daewoo Matiz: The Daewoo Matiz started production in 1998 and
sold in South Korea and many European markets with the code name
Ml00.
The Matiz was originally launched with just a 0.8 L 3-cylinder engine.
This engine was developed from the TICO unit by Tickford, a UK
company based in Milton Keynes. The Tickford connection was
acknowledged in the brochures distributed in UK showrooms.
1998- Mitsubishi Lancer It was actually Seventh generation Mitsubishi
Lancer, in collaboration with Hindustan Motors.
1999 - Maruti's Baleno and Wagon R_The Suzuki Esteem is an export
name plate for the Suzuki Cultus Crescent — also marketed in Europe,
Australia and many Asian countries as the Suzuki Baleno — manufactured
206by Suzuki Motor Corporation. In India, it was manufactured by Maruti
Suzuki and sold as the Maruti Baleno.
Maruti in 2000
The 5th generation Alto (HA12/22) was introduced in 1998, in India it
came in 2000 Suzuki produced two "classic-style" versions: the Alto C
with a deep chrome grille and a curious headlamp arrangement by which
circular main lamps were joined with ovoid sidelights and indicators,
which was shared with the Alto Works and the Alto C2 which had separate
headlamps and sidelights and a wider grille.
4.4.4) Landmark of Indian automobile industry
1897 First Person to own a car in India - Mr. Foster of M/s Crompton
Greaves Company, Mumbai 1901 First Indian to own a car in India –
Jamsetji Tata 1905 First Woman to drive a car in India - Mrs. Suzanne RD
Tata
1905 Fiat Motors 1911 First Taxi in India 1924 Formation of traffic police
1928 Che verolet Motors 1942 Hindustan Motors
1944 Premier Automobiles Limited
1945 Tata Motors
1947 Mahindra & Mahindra Limited 1948Ashok Motors
1948 Standard Motors 1974Sipani Motors 1981 Maruti Suzuki
1994 Rover Company 1994Mercedes-Benz
1994 General Motors India -Opel brand launch
1995 Ford Motor Company 1995 Honda Siel Cars India
1995 REVA Electric Car Company 1995 Daewoo Motors
2071996 Hyundai Motor Company
1997 Toyota Kirloskar Motors 1997Fiat Motors (Re-Entry)
1998 San Motors
1998 Mitsubishi Motors 2001 Skoda Auto
2003 General Motors India -Chevrolet brand launch
2005 BMW
2007 Audi
4.5) Classification of Vehicles in India:
The companies under automobile industry are classified into below
sectors namely; commercial vehicles, passenger car and multi utility
vehicles, Two and Three wheelers:
4.5.1) Two-Wheelers
Two wheelers have a special place on the Indian roads. They are
extremely popular and versatile not only as passenger carriers but also as
good carriers.
It comes as no surprise when India is ranked as the second largest
two-wheeler market in the world.
Hero Honda and Bajaj Auto are the leaders in the two wheeler market in
India. In India, the two wheeler segment was the first to secure export
others. Motorcycles segment dominates with an 80% market share. The
demand is huge for new and powerful variants. The 125cc motorbikes are
finding favor with majority of the motor cycle owners. Apart from the
motorcycles that are traditionally used by men, the scooters (60cc
upwards) have also contributed towards a spurt in two-wheeler sales.
These allow the housewives, high-school and college going children,
working women and the elderly to be mobile. Then there are mopeds that
208are nothing but a sophisticated motorized cycle. Your neighborhood green
grocer or kirana store may use it for home deliveries these as they are
highly affordable.
Why are Two Wheelers so popular in India?
The growing middle class population, prosperous rural India and the
paucity of reliable public transport system is leading to a large number of
two wheelers added to the roads every day. Indian roads in most cities,
villages and towns are narrow. Two-wheelers allow people to navigate
such roads easily.
Fuel-efficiency is a huge advantage. With the cost of petrol increasing
steadily, two-wheeler makes the daily travel both affordable and
convenient. Easy availability of auto finances at attractive schemes has
made a two-wheeler a must in most urban and rural homes.
Two Wheeler Models
The two wheelers have played a pivotal role in the surging growth of the
Indian automobile industry. Over the years the domestic sale of various
brands of two wheelers has grown in large numbers. Even, in exports, the
two wheelers have been able to maximize the profit margin of various two
wheeler manufacturers.
There are mainly three models of two wheelers namely, scooters,
motorcycles and mopeds. In recent years, (the two wheeler industry has
witnessed a sea change. During the yesteryears the scooters used to have
about 50% of the market share and the rest were divided between the
motorcycles and mopcds. But now the trend indicates that people are
preferring motorcycles more than the scooters. At present there is a huge
demand for the motorcycle models in India.
209They are even equipped with more features for faster travel. Based upon
the engine displacements and power capacity motorcycles are further
classified as: road bikes, trail bikes, racing bikes and touring bikes. Most of
the motorcycles in India come with engine capacity of about 100 cc to 250
cc.
The engine capacity of scooters usually vary between 100 cc to 150 cc.
Mopeds have small engine capacity ranging between 50cc to 100 cc. Most
of the automobile companies in this segment are always coming up with
newer variants of different models of two wheelers.
India also is the largest manufacturer of motorcycles and the second largest
manufacturer of scooters in the world.
Two Wheeler Companies
There are a number of two wheeler companies in India that produce
vehicles of extremely high standard. Some of the leading two wheeler
manufacturers in India are Bajaj Auto, TVS Motor, Kinetic Motor, Suzuki
Motor Corporation, Royal Enfield Motors India, and Hero Honda Motors,
Yamaha Motor India, LML India and Monto Motors. Many of two
wheelers manufactured by these companies are exported to countries in
South East Asia, Africa and South America. Motorcycles are usually
priced higher than that of the scooters and mopeds.
To be in the long run these companies are even adding more number of
features to these vehicles. Bike models become popular when they are as
good in appearance as in the performance. Two wheeler bike models in
India also get popular when they are in good price range along with other
attractive features.
Bajaj Auto
Hero Honda
Honda Motorcycle & Scooter
210 Kinetic Motor
Monto Motors
Roval Enfield
Suzuki Motorcycle
TVS Motor
Yamaha Motor
4.5.2) Three Wheelers
Over the years, the world has been witnessing fantabulous development
in the sector of automobile industry. With their advanced engineering
techniques, the major auto giants like Mercedes. Ford Motors. General
Motors, Audi, BMW, Hyundai. Mitsubishi etc have come up with some of
the most sophisticated vehicles that a human mind could have hardly
imagined just a few years ago. The global automobile manufacturers have
found huge potential markets in a number of developing countries. It is not
only the cars. Consumer vehicles and two wheelers that are sold in these
various countries in large numbers, but the three wheeler market are also
quite big in these nations. You will get to see innumerable three wheelers
running on the roads of various Southeast Asian countries like India,
Thailand, Sri Lanka, Pakistan, Philippines, Nepal and Bangladesh etc.
There are a number of reasons that have resulted into the proliferation of
the three wheelers in umpteen countries. Three wheelers are quite
economical in terms of manufacturing and maintenance. They have also
earned huge popularity due to their easy maneuvering capabilities through
the narrow lanes that are prevalent in most of the developing countries.lt is
not that three wheelers are used only in the developing nations.
211Three Wheeler Companies
There are various brands of three wheelers in the different parts of US,
UK and some of the European nations. Reliant and Morgan Motor
Company are the two major three wheeler manufacturers in UK. One of the
US based three wheeler manufacturers; ZAP has even come up with
eco-friendly three wheelers that operate with battery, Bajaj Auto, Piaggio
are the leading players in the three wheeler industry in most of the
Southeast Asian nations.
The vehicles have also given rise to the three wheeler accessory industry
in many countries. It is believed that numerous people have got employed
in various countries due to these three wheelers. Apart from serving the
daily need of the commuters the three wheelers also play commendable
role in the transportation of several commodities. Seeking the increasing
demand of three wheelers, more automobile companies are considering
manufacturing these vehicles.
Bajaj Auto 3W
Force motors
Scooters India
Piaggio
TVS
4.5.3) Four Wheelers in India
Indian roads saw very less of the four wheelers until the 1980s. They
were seen as the symbol of those who had arrived. Premier Padminis and
the Ambassador were favorites on Indian roads.
With liberalization, Government abolished licensing and removed
restrictive trade policies. Automobile industry benefited greatly from these
measures. Indian manufacturers started to collaborate with international
212companies, invested in research and development and introduced fuel and
cost efficient products.
Mahindra & Mahindra's Automotive Chief, Pawan Goenka, who is also
President of industry body, Society of Indian Automobile Manufacturers
(SIAM) says that "The Indian auto industry and the Indian auto market
have become internationally very important and therefore, no one can
ignore this market,"
A) Passenger Cars
The passenger cars segment is has the largest share in the domestic
passenger vehicles industry. It contributes to a total volume of 78% and the
rest of the share is enjoyed by utility and sports vehicles. Some of the key
players in the market are Maruti Udyog Ltd. Tata Motors Ltd, Hyundai,
Toyota, Honda, Ford and GM.
The newer entrants are the marquee brands like Mercedes-Benz, BMW
and Volkswagen.
BMW
Chevrolet
Fiat
Ford
Hindustan Motors
Honda Siel
Hyundai
International cars
Mahindra & Mahindra
Mahindra & Renault
Maruti Udyoq
Mercedes
Mitsubishi Motors
213 Nissan
Skoda
Tata Motors
Toyota Volvo Cars
Volvo cars will be coming soon to India.
But they already make Volvo flgses & Trucks in India- Imported brands
Some car brands that are imported and sold in India are:
Audi
Rolls Royce
B) Commercial Vehicle in India
India is the fourth largest commercial vehicle market worldwide.
However in spite of such credentials, the commercial vehicles segment has
probably grown at the most sedate pace since the de-licensing of Indian
auto industry in 1991. However, post-2006 the industry showed a sudden
surge in demand. However post 2006. There has been a How According to
the IBEF report of 2008. Commercial vehicles segment enjoyed the
highest growth rate in the automobile industry.
Types of Commercial Vehicle
Commercial vehicles are of two types - Goods vehicles and Passenger
vehicle. Good vehicle used for transport are the trucks, tempos, containers,
trailers and tankers. In this segments are medium and heavy commercial
vehicles goods occupy a maximum market share of 48%. The light
commercial vehicles enjoy a market share of 38%. The industrial
revolution started post-Independence and contributed to urban migration
led to a huge demand for these goods vehicle. In the recent years, with the
214retail boom all over the country, it has been noticed that the market share of
Light Commercial Vehicles (LCVs) is increasing .The boom in the
economy has also contributed to increase in passenger, business and
leisure travel. These segments have also contributed to the passenger
vehicles sales increase. With the expansion of the cities, the travel of die
urban dwellers has also increased manifold. This is also one of the prime
factors in increasing the passenger travel.
Commercial Vehicle Manufacturers in India
There are about nine main manufacturers of commercial vehicles in
India. Some of them are Eicher Motors Ltd, Tata Motors Limited, Ashok
Leyland, Mahindra and Mahindra Limited and Volvo Motors. The
commercial vehicles segment is dominated by leading domestic players
like in 2008 Tata Motors with a total market share of 62%, Ashok Leyland
Ltd, with a total market share of 15%, M & M Ltd, with a total market
share of 11%, Eicher Motors Ltd, with a total share of 6%, and others.
Ashok Leyland
Eicher Motors
Force Motors (Other products)
Mahindra & Mahindra Trucks
Swaraj Mazda
Tata Motors (Other products)
Volvo Buses & Trucks
2154.6) Study of the Performance of Indian Automobile Industry
4.6.1) Indian Automobile Production
The automotive industry of India is categorized into these sectors
namely; commercial vehicles, passenger car and multi utility vehicles,
Two and Three wheelers. More than 75% of the vehicles sold are two
wheelers. Nearly 59% of these two wheelers sold were motorcycles and
about 12% were scooters. Mopeds occupy a small portion in the two
wheeler market however; electric two wheelers are yet to penetrate.
The passenger vehicles are further categorized into passenger cars,
utility vehicles and multipurpose vehicles. All sedan, hatchback, station
wagon and sports cars fall under passenger cars. Tata Nano is the world's
cheapest passenger car, manufactured by Tata Motors, that leading
automaker of India. Multi-purpose vehicles or people-carriers are similar
in shape to a van and are taller than a sedan, hatchback or a station wagon,
and are designed for maximum interior room. Utility vehicles are designed
for specific tasks. The passenger vehicles manufacturing account for about
15% of the market in India.
Commercial vehicles are categorized into heavy, medium and light.
They account for about 5% of the market. Three wheelers are categorized
into passenger carriers and goods carriers. Three wheelers account for
about 4% of the market in India, the productions obtained for production of
commercial vehicles, passenger car and, two and three wheelers listed in
table 4-1 shows the amount of the productions by the numbers. And the
table no 4-2 shows the rate of the growth of production in the period of
study. From these tables we can understand that the automobile industry
had the beast rate of growth at 2009-10.the tables 4-3 and 4-4 show the
amount of domestic sales and also the rate of growth .so we can understand
easily that the automobile industry is growing and has the positive role in
216economic development. It has been shown in table 4-1 that the
two-wheelers constitute a major part of total automobile production in
number, with gradually expanding share. Two-wheelers form the
predominant category of vehicles in India, in terms of sales as well. Cars
continue to constitute the major and expanding share in passenger vehicles
segment. Light commercial vehicles are expanding their shares in the sales
of commercial vehicles segment, though heavy and medium commercial
vehicles are still dominant in this segment.
Table 4-1: Automobile Production Trends (nos)
category 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles
1,309,300 1,545,223 1,777,583 1,838,593 2,351,240
Commercial
Vehicles 391,083 519,982 549,006 416,870 566,608
Three
Wheelers 434,423 556,126 500,660 497,020 619,093
Two
Wheelers 7,608,697 8,466,666 8,026,681 8,419,792 10,512,889
Grand
Total 9,743,503 11,087,997 10,853,930 11,172,275 14,049,830
.Source: Society of Indian Automotive Manufacturing (SIAM)
217chart 4-1: Automobile Production Trends
12,000,000
10,000,000
8,000,000
6,000,000 PV
CV
4,000,000
Three W
Two W
2,000,000
0
2005-06 2006-07 2007-08 2008-09 2009-10
Table 4-2: Analysis of Automobile Production Trends
category 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles
8.22% 18.02% 15.04% 3.43% 27.88%
Commercial
Vehicles 10.57% 32.96% 5.58% -24.07% 35.92%
Three
Wheelers 16.02% 28.01% -9.97% -0.73% 24.56%
Two
Wheelers 16.52% 11.28% -5.20% 4.90% 24.86%
Grand Total 15.06% 13.80% -2.11% 2.93% 25.76%
• Source: Society of Indian Automotive Manufacturing (SIAM)
218Table 4-3
Automobile Domestic Sales Trends (Number of Vehicles)
category 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776
Commercial
Vehicles 351,041 467,765 490,494 384,194 531,395
Three
Wheelers 359,920 403,910 364,781 349,727 440,368
Two
Wheelers 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231
Grand Total
8,906,428 10,123,988 9,654,435 9,724,243 12,292,770
• Source: Society of Indian Automotive Manufacturing (SIAM)
Chart 4-2: Automobile Domestic Sales Trends
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000 PV
5,000,000 CV
Three W
4,000,000
Two W
3,000,000
2,000,000
1,000,000
0
2005-6 2006-7 2007-8 2008-9 2009-10
• Source: Society of Indian Automotive Manufacturing (SIAM)
219Table 4-4: Analysis of Automobile Domestic Sales Trends
2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles 20.73% 12.31% 0.18% 25.57%
Commercial
Vehicles 33.25% 4.86% -21.67% 38.31%
Three
Wheelers 12.22% -9.69% -4.13% 25.92%
Two
Wheelers 11.63% -7.91% 2.60% 26.00%
Grand Total 13.67% --4% .72%. 26.41%.
Source: Society of Indian Automotive Manufacturing (SIAM)
4.6.2) Indian Automobile Export
In the year 1961 Tata began exporting its product first to Sri Lanka, then
called Ceylon. It was named 312. Later they began exporting to African
countries. It has been shown in table 4-5 that the two-wheelers and
passenger car constitute a major part of total automobile production in
number, with gradually expanding share. Two-wheelers form the
predominant category of vehicles in India, in terms of export as well. Cars
continue to constitute the major and expanding share in passenger vehicles
segment. Light commercial vehicles are expanding their shares in the
export of commercial vehicles segment, though heavy and medium
commercial vehicles are still dominant in this segment. The Chart 4-3
shows that the export of automobile has growing rate in the period of
study.
220Table 4-5:
Automobile Exports Trends (Number of Vehicles)
category 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles 175,572 198,452 218,401 335,729 446,146
Commercial 40,600 49,537 58,994 42,625 45,007
Vehicles
Three 76,881 143,896 141,225 148,066 173,282
Wheelers
Two 513,169 619,644 819,713 1,004,174 1,140,184
Wheelers
Grand Total 806,222 1,011,529 1,238,333 1,530,594 1,804,619
• Source: Society of Indian Automotive Manufacturing (SIAM)
Chart 4-3: Automobile Exports Trends
1,200,000
1,000,000
800,000
PC
600,000 CV
THREE W
400,000 TWO W
200,000
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
• Source: Society of Indian Automotive Manufacturing (SIAM)
221Table 4-6: Analysis of Automobile Exports Trends
category
2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles 5.51% 13.03% 10.05% 53.72% 32.89%
Commercial
Vehicles 35.60% 22.01% 19.09% -27.75% 5.59%
Three
Wheelers 15.10% 87.17% -1.86% 4.84% 17.03%
Two
Wheelers 40.05% 20.75% 32.29% 22.50% 13.54%
Table 4-7: analysis Automobile Exports Trends bases sales
2004-5 2005-6 2006-7 2007-8 2008-9
Motor 8,467,85 9,743,50 11,087,9 10,853,9 11,175,4 Units
Vehicle 3 3 97 30 79
Production3
Industry 24,379 26,969 30,507 32,383 33,342 USD
Revenue1 millin
Exports3 629,544 806,222 1,011,52 1,238,33 1,530,66 Units
(Units) 9 3 0
Exports1 1,915 2,231 2,552 3,008 3,718 USD
(Revenue) millin
• Source: 'Department of Heavy Industry, 3Society of Indian Automotive
Manufacturing (SIAM), 1National Accounts Division, *Imaging More
estimates, USD 1 = INR 45 Strengths
222Analysis of Indian Exports:
Cost competitiveness in terms of labor and raw material.
Established manufacturing base
Economics of scale due to domestic market
Potential to harness global brand image of the parent company
Table 4-8: SWOT analysis for Indian export
Strengths • Global hub policy for small car like Hyundai, Suzuki, etc.
Weakness • Perception about quality.
• Infrastructure bottlenecks.
Opportunities • Huge export markets such as Europe, America, Africa, and
others for Indian cars.
Threats • China, Malaysia, Thailand, etc.
• Many other countries also have strategies for export
promotion.
Export Imperatives:
Internal Factors:
• Attaining high quality for global standards.
• Continuous cost reduction for global competitiveness.
• Supply chain management (logistics).
• Attaining economies of scale & scope.
External Factors:
• Improve infrastructure (ports, roads, etc).
• Improve EXIM regulations.
2234.6.3) India's Position in the Global Auto industry
The automotive sector is one of the core industries of the Indian
economy; Indian industry has come of age only since the complete
de-licensing of 1991. Indian auto industry defied global economic
recession, and continued to register high sales both in domestic and export
markets,
In 2007, India was ranked as the 12th fastest growing market in the
world. Presently, India is the 2nd largest two wheeler market in the world
and 4th largest commercial vehicle market worldwide. India is the 1th
largest market in the passenger car segment globally which is expected to
hccomc the 7th largest market by 2016.
India holds a total of 3% share in global four wheeler production and
ranks 9th in the world in the production of cars. There is a huge potential
which needs to be tapped through an integrated effort of the government.
India is a base for the manufacturing of small cars and has attracted the
attention of global giants for investing in this segment.
It is expected that Indian automobile industry will be among the world's
top five automotive economies by 2025 Due to the huge future potential
for growth.
Ernst and Young have predicted the Indian passenger car market to grow
at 12 percent annually over the next five years to touch 3.75 million units
by 2014 from 1.89 million units at present. Analysts with Ernest and
Young say that "The industry's turnover is estimated to touch $155 billion
by 2016, this would make the Indian auto industry the seventh largest in
the world, and the third largest by 2030 Behind China and the US.
The government's Automotive Mission Plan also envisages India
emerging as the world's seventh largest carmaker by 2016, contributing
over 10 percent to the country's $1.2-trillion economy from under live
percent at present.
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