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    Automobile Industry in India Assignment PDF

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    vinod babu
    The Indian automobile industry has grown significantly in recent years, becoming the 4th largest in the world, with domestic sales increasing at a 6.71% CAGR between 2013-2019. Two-wheelers dominate the market due to India's growing middle class and young population. The government has taken several initiatives to further develop the industry such as increasing investment in R&D and establishing testing centers. If recent trends continue, the Indian automotive industry is expected to reach $251-283 billion by 2026.

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    Automobile Industry in India Assignment PDF

    Uploaded by

    vinod babu
    504 views2 pages
    The Indian automobile industry has grown significantly in recent years, becoming the 4th largest in the world, with domestic sales increasing at a 6.71% CAGR between 2013-2019. Two-wheelers dominate the market due to India's growing middle class and young population. The government has taken several initiatives to further develop the industry such as increasing investment in R&D and establishing testing centers. If recent trends continue, the Indian automotive industry is expected to reach $251-283 billion by 2026.

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    The Indian automobile industry has grown significantly in recent years, becoming the 4th largest in the world, with domestic sales increasing at a 6.71% CAGR between 2013-2019. Two-wheelers dominate the market due to India's growing middle class and young population. The government has taken several initiatives to further develop the industry such as increasing investment in R&D and establishing testing centers. If recent trends continue, the Indian automotive industry is expected to reach $251-283 billion by 2026.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    504 views2 pages

    Automobile Industry in India Assignment PDF

    Uploaded by

    vinod babu
    The Indian automobile industry has grown significantly in recent years, becoming the 4th largest in the world, with domestic sales increasing at a 6.71% CAGR between 2013-2019. Two-wheelers dominate the market due to India's growing middle class and young population. The government has taken several initiatives to further develop the industry such as increasing investment in R&D and establishing testing centers. If recent trends continue, the Indian automotive industry is expected to reach $251-283 billion by 2026.

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    Automobile Industry in India

    Introduction
    The Indian auto industry became the 4 th largest in the world with sales increasing 9.5
    per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was
    the 7th largest manufacturer of commercial vehicles in 2018.
    The Two Wheelers segment dominates the market in terms of volume owing to a
    growing middle class and a young population. Moreover, the growing interest of the
    companies in exploring the rural markets further aided the growth of the sector.
    India is also a prominent auto exporter and has strong export growth expectations for
    the near future. Automobile exports grew 14.5 per cent during FY 2019. It is
    expected to grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several
    initiatives by the Government of India and the major automobile players in the Indian
    market are expected to make India a leader in the two-wheeler and four wheeler
    market in the world by 2020.
    Market Size
    Overall domestic automobiles sales increased at 6.71 per cent CAGR between
    FY13-19 with 26.27 million vehicles getting sold in FY19 .Domestic automobile
    production increased at 6.96 per cent CAGR between FY13-19 with 30.92 million
    vehicles manufactured in the country in FY19
    In FY19, year-on-year growth in domestic sales among all the categories was
    recorded in commercial vehicles at 17.55 per cent followed by 10.27 per cent year-
    on-year growth in the sales of three-wheelers.
    Premium motorbike sales in India crossed one million units in FY18. During January-
    September 2018, BMW registered a growth of 11 per cent year-on-year in its sales in
    India at 7,915 units. Mercedes Benz ranked first in sales satisfaction in the luxury
    vehicles segment according to J D Power 2018 India sales satisfaction index
    (luxury).
    Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in
    2017-18.
    Investments
    In order to keep up with the growing demand, several auto makers have started
    investing heavily in various segments of the industry during the last few months. The
    industry has attracted Foreign Direct Investment (FDI) worth US$ 21.38 billion during
    the period April 2000 to March 2019, according to data released by Department for
    Promotion of Industry and Internal Trade (DPIIT).
    Some of the recent/planned investments and developments in the automobile sector
    in India are as follows:

     Ashok Leyland has planned a capital expenditure of Rs 1,000 crore (US$ 155.20 million) to launch 20-
    25 new models across various commercial vehicle categories in 2018-19.
     Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to invest
    US$ 310 million in India.
     Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per year,
    highest for any luxury car manufacturing in India.
     As of October 2018, Honda Motors Company is planning to set up its third factory in India for launching
    hybrid and electric vehicles with the cost of Rs 9,200 crore (US$ 1.31 billion), its largest investment in
    India so far.
     In November 2018, Mahindra Electric Mobility opened its electric technology manufacturing hub in
    Bangalore with an investment of Rs 100 crore (US$ 14.25 million) which will increase its annual
    manufacturing capacity to 25,000 units.

    Government Initiatives
    The Government of India encourages foreign investment in the automobile sector
    and allows 100 per cent FDI under the automatic route.
    Some of the recent initiatives taken by the Government of India are -

     The government aims to develop India as a global manufacturing centre and an R&D hub.
     Under NATRiP, the Government of India is planning to set up R&D centres at a total cost of US$ 388.5
    million to enable the industry to be on par with global standards
     The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country for
    introduction of electric vehicles (EVs) in their public transport systems under the FAME (Faster Adoption
    and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme. The government will also set up
    incubation centre for start-ups working in electric vehicles space.
     In February 2019, the Government of India approved the FAME-II scheme with a fund requirement of Rs
    10,000 crore (US$ 1.39 billion) for FY20-22.

    Achievements
    Following are the achievements of the government in the past four years:

     Number of vehicles supported under FAME scheme increased from 5,197 in June 2015 to 192,451 in
    March 2018. During 2017-18, 47,912 two-wheelers, 2,202 three-wheelers, 185 four-wheelers and 10
    light commercial vehicles were supported under FAME scheme.
     Under National Automotive Testing And R&D Infrastructure Project (NATRIP), following testing and
    research centres have been established in the country since 2015
    o International Centre for Automotive Technology (ICAT), Manesar
    o National Institute for Automotive Inspection, Maintenance & Training (NIAIMT), Silchar
    o National Automotive Testing Tracks (NATRAX), Indore
    o Automotive Research Association of India (ARAI), Pune
    o Global Automotive Research Centre (GARC), Chennai
     SAMARTH Udyog – Industry 4.0 centres: ‘Demo cum experience’ centres are being set up in the
    country for promoting smart and advanced manufacturing helping SMEs to implement Industry 4.0
    (automation and data exchange in manufacturing technology).

    Road Ahead
    The automobile industry is supported by various factors such as availability of skilled
    labour at low cost, robust R&D centres and low cost steel production. The industry
    also provides great opportunities for investment and direct and indirect employment
    to skilled and unskilled labour.
    Indian automotive industry (including component manufacturing) is expected to
    reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers are
    expected to grow 9 per cent in 2018.
    References: Media Reports, Press Releases, Department of Industrial Policy and
    Promotion (DIPP), Automotive Component Manufacturers Association of India
    (ACMA), Society of Indian Automobile Manufacturers (SIAM), Union Budget 2015-
    16, Union Budget 2017-18

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