India’s position in the Global Auto industry

The automotive sector is one of the core industries of the Indian economy. Indian Auto 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 11th largest market

in the passenger car segment globally which is expected to become 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, OEM’s

and also the auto component manufacturers. India is a base for the manufacturing of small cars and has

attracted the attention of global giants for investing in this segment.

The graph below shows that Indian Auto industry has a potential to sell 31.96 million vehicles by 2015-2016.
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 has 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 five percent at

present.

Where India’s auto industry scores over the others

India’s Nano (the world’s cheapest car) and other small cars are forcing the world to go back to their drawing

boards. India’s obsession with hatchbacks has led to designs that score high on fuel and cost efficiencies without

compromising on the quality. According to Neeraj Garg, Volkswagen India group sales director: “Car
manufacturers are betting on hatchbacks in the B+ segment. We expect the segment to constitute nearly 75

percent of volumes in the coming years.” India’s Reva (electric car) is very popular abroad as its environment

friendly. Spark, the compact car from General Motors, will now come in an electric version, thanks to a tie-up with

Bangalore’s Reva Electric Car Co.  With such innovations abound, Indian auto industry is all set to grow strong

and become a visible and stronger power in the Global auto industry.

utomobile Industry in India – A background of the four-wheeler segment

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 companies,
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 closer look at the four-wheeler segment in India

The four wheeler segment comprises of the passenger vehicles, utility vehicles and multi-purpose vehicles. India
is the 11th largest passenger car market in the world and prominently features on the major automobile players’
road map. 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.

The graph shows the sales trajectory of four wheelers in million units. Car sales in India have risen rapidly since
2006 on the back of strong economic growth and government incentives and this trend will continue in 2010 too.
Industrial growth has also lead to an increase in

Major players
In the four wheeler segment, the most reputed Indian global brand is Maruti Udyog, a
joint venture between SuzukiMotors, Japan and the Government of India. It is a
listed company and is credited for producing and subsequent selling of more than
one million cars in a financial year. It is the largest producer of four wheeler
automobiles in the entire south Asia. Its popular products include Maruti 800, Maruti
1000, Omni, Esteem, Alto, Wagon -R and Zen.
Next in this segment, we have the world famous Tata Motors. India's biggest
automobile company, Tata Motors has an annual turnover of more than Rs. 24,000
Crores. It primarily produces passenger vehicles, multi utility vehicles and sports
utility vehicles. Some of its popular products are Sumo, safari, indica, Indigo and
Indigo Marina with their respective variants. Recently, it has also ventured into the
bus market by producing the luxurious Tata Star bus. The company currently is
working on its ambitious plans of launching a Rupees one lakh car. It exports its
automobiles to countries in the middle-east, Africa and Eastern Europe. Browse
more through www.automobileindia.com to know more on the Indian automobile
scenario.
Top ten players in the Indian automobile sector

The domestic players as well as the foreign players dominate the Indian automobile sector. The key
players contributing to the growth of the sector are discussed below.
The key players in Indian automobile industry are:

1) Maruti Udyog Limited

2) Hero Motors Limited
3) Tata Group
4) Bajaj Auto Limited
5) Mahindra Group
6) Ashok Leyland
7) Yamaha Motor India
8) Hyundai Motors India Limited
9) Toyota Kirloskar Motor Private Limited
10) Honda Siel Cars India Limited

INTRODUCTION Automobile industry is one of the main contributing sectors for

any economy. If we take example of Japan, is one of the economies which thrive on
technology, more specifically automobile industry and Japan is one of the major
economies of the world. Not only Japan most of the developed and major economies
of the world have automobile industry in advanced stage. Germany has Mercedes,
United States has General Motors and Ford, Japan has Toyota and Honda, Volvo
belongs to Sweden and Rolls Royce is of United Kingdom. All these countries are
major players in term of economy in the world. This clearly demarks that if any
economy wants to be a major player in the world market should have strong
fundamental and it should have strong automobile industry base. India is one of the
fastest growing economies of the world and testimony to this is the growth of
automobile industry which clocked a growth rate of approx. 45% (2009-2010). India
has companies like Hero-Honda, Tata Motors, Mahindra & Mahindra and Maruti-
Suzuki which are known brands world wide in their own field of expertise. Same is
with Brazil which has Marcopolo. Thus, it is very clear that for a developed economy
growth and existence of automobile industry is a pre-requisite.
(China is not exception to this it is land to the plant of world repute brands like GM,
Honda and etc.) ABOUT AUTOMOBILE Automobile not only provides with
employment in its own domain but a good amount of employment is generated in
allied and ancillary industry.
As far as India is concern automobile industry is expected to contribute about 7.20%
in the year 2010-2011.
In terms of revenue automobile industry is one of the major contributors to the
economy.
At the very basic automobile industry can be divided into the following segments
Two-Wheelers
Four-Wheelers (Passenger Cars)
Commercial Vehicles Mahindra and Mahindra is the only company in the Indian
automobile industry which operates in all segments right from Two-Wheelers to
Commercial Vehicles and Passenger Cars.
Tata Motors is another major player in the Indian as well as the world automobile
industry. It is few of the company which operates in Commercial Vehicle business as
well as in the Passenger Car segment also. When in the 2008 Tata Motors bought
JLR they proved the myth wrong that a “Truck Manufacturer Cannot and Should Not
Make Cars”.
They are a major player in the world market when we talk about Commercial
Vehicle.
India’s Marti-Suzuki is one of the largest passenger car sellers of the world and
Hero-Honda is world largest Two-Wheeler manufacturer as well as seller. India not
only provides conducive and congenial environment to automobile industry of home
origin but we give same facility to outsiders also.
Toyota and Honda have set up their manufacturing units in India and Hyundai has
not only manufacturing base in India but they are a major player in the Indian
passenger market. This shows how good the fundamentals of the Indian economy
are. FOLLOWING ARE THE LIST OF THE COMPANY (MAJOR) WHICH
OPERATES IN DIFFERENT SEGMENT. Two-Wheelers

 Hero-Honda
 Honda
 Baja
 Yamaha
 Royal Enfield
 TVS
 Mahindra & Mahindra

Four-Wheelers

 Maruti-suzuki
 Tata Motors
 Hyundai
 Mahindra & Mahindra
 Honda Siel India Ltd.
 Toyota
 (BMW, Mercedes and Fiat etc. account for a very low percentage)

Commercial Vehicle
  Tata Motors
 Ashok Leyland
 Swaraj Mazda
 Eicher
 AMW (Asia Motors Works)
 Mahindra & Mahindra
 Volvo
 Sonalika Tractors
 Escort

ANALYSIS The automotive Industry in India is now working in terms of the

dynamics of an open market. Many joint ventures have been set up in India with
foreign collaboration, both technical and financial with leading global manufacturers.
Also a very large number of joint ventures have been set up in the auto-components
sector and the pace is expected to pick up even further. The Government of India is
keen to provide a suitable economic frame, and business environment conducive to
the success of the established and prospective foreign partnership ventures. $5.7
billion is the investment envisaged in the new vehicles projects. The market research
report "Indian Automobile Industry - An Analysis (2005-2010)" clarifies all doubts
regarding sales satisfaction index and customer satisfaction index. With the inclusion
of initial quality study, and the Government policy and competitive analysis, this
report in itself is a complete guide to the producers and consumers in the auto
industry. SWOT ANALYSIS Strength Adventure Tourism

 It is self dependent industry.

 The business environment is very conducive
 Indian companies are open for the joint ventures
 Few Indian companies have done some major acquisitions in recent past
 They are focusing on the indigenous market as well as the overseas market at
the same time.

(Over 25% of revenue generated by Tata Motors and Maruti Suzuki are from
overseas) Weakness

 Technology wise we are still not the best.

 The demand for the indigenous product in the Passenger Car Business Unit
(PCBU) is not very high for Indian companies.

Rise in the technology and the investment by Indian companies in the overseas.
Opportunity

 This industry can grow multiple folds with the investment in the infrastructure
of the country.
 The growth in the household income of the general mass and increasing per-
capita income is increasing the demand in the passenger car and two wheeler
markets.
Market at this stage can help them capture up-coming market like that of Brazil,
South Africa, Tanzania and etc. Threat

 The cloud of double fold recession in the US economy may slow the growth
process in the Indian market.
 Law and order situation in Naxal and Terror hit states can be a cause of
worry.
 Advent of easy mode of commutation like metro and local trains can slow the
growth of Passenger Car and Two Wheeler business segment. Indian
Railways are set to make a dedicated freight corridor which may slow down
the

FUTURE Future for automobile industry is looking bright as a lot infrastructure in

going to improve in near future and this means a lot of growth is there in the box as
for the automobile industry growth is directly dependent on the improvement,
development and growth of the infrastructure.
This would mean a lot investment in automobile industry and lot more jobs in this
sector.
Not only technical but people in the HR and Marketing and IT have great future in
the automobile industry. CAREER OPPORTUNITIES As automobile industry is
showing rapid growth in India, the country becomes a house to numerous well-
established automobile companies. They offer excellent job opportunities to develop
a career in Automobile Industry. Some of the popular car-producing companies
that offer jobs in the automobile industry are- Suzuki, Toyota, Tata, Fiat, Honda,
Mahindra & Mahindra, Ford, Hyundai and Skoda. Manufacturing of two-wheelers is
dominated by the companies TVS, Bajaj Auto, LML, Kinetic, Yamaha and Hero
Honda. The tractors are manufactured by the popular companies like Escorts, L&T,
Mahindra & Mahindra, Punjab Tractors, John-Deere, New Holland and ITL-Renault.
In the Commercial Vehicle segment entry of companies like AMW, Mahindra &
Mahindra etc are also creating a lot of job opportunities in the sector as well as in
the ancillary units i.e. allied industries. It has been clarified by SIAM (Society of
Indian Automobile Manufacturer) that in coming future at least 25000 professionals
will be required by different companies. Job opportunities are in plenty for this
sector and preference is given to a B.tech. (Mech) plus MBA candidate. “Future is
bright enough for everybody, its just the matter of time when we react to it”