INTRODUCTION OF AUTOMOBILE INDUSTRY

The automobile industry has changed the way people live and work. The earliest of
modern cars was manufactured in the year 1895.
Shortly the first appearance of the car followed in India. As the century turned,
three cars were imported in Mumbai (India). Within decade there were total of
1025 cars in the city.

The dawn of automobile actually goes back to 4000 years when the first wheel was
used for transportation in India. In the beginning of 15th century, Portuguese
arrived in China and the interaction of the two cultures led to a variety of new
technologies, including the creation of a wheel that turned under its own power.
By 1600s small steam-powered engine models was developed, but it took another
century before a full-sized engine-powered vehicle was created.

Brothers Charles and Frank Duryea introduced the actual horseless carriage in the
year 1893. It was the first internal-combustion motor car of America, and it was
followed by Henry Ford’s first experimental car that same year.

One of the highest-rated early luxury automobiles was the 1909 Rolls-Royce Silver
Ghost that featured a quiet 6-cylinder engine, leather interior, folding windscreens
and hood, and an aluminum body.
Chauffeurs usually drove it and emphasis was on comfort and style rather than
speed.
During the 1920s, the cars exhibited design refinements such as balloon tires,
pressed-steel wheels, and four-wheel brakes.
Graham Paige DC Phaeton of 1929 featured an 8-cylinder engine and an
aluminum body.
The 1937 Pontiac De Luxe sedan had roomy interior and rear-hinged back door
that suited more to the needs of families. In 1930s, vehicles were less boxy and
more streamlined than their predecessor was.
The 1940s saw features like automatic transmission, sealed-beam headlights, and
tubeless tires.
The year 1957 brought powerful high-performance cars such as Mercedes-Benz
300SL. It was built on compact and stylized lines, and was capable of 230 kmph
(144 mph).
This was the Indian automobile history, and today modern cars are generally light,
aerodynamically shaped, and compact.
Facts & Figures

The automobile industry in India is on an investment overdrive. Be it passenger car

Hyundai will also be unmasking the Verna and a brand new diesel car. General
Motors will be launching a mini and may be a compact car.

Most of the companies have made their intentions clear. Maruti Udyog has set up
the second car plant with a manufacturing capacity of 2.5 lakh units per annum for
an investment of Rs 6,500 Crore (Rs 3,200 Crore for diesel engines and Rs 2,718
Crore for the car plant itself).

Hyundai and Tata Motors have announced plans for investing a similar amount
over the next 3 years. Hyundai will bring in more than Rs 3,800 Crore to India.
Tata Motors will be investing Rs 2,000 Crore in its small car project.
General Motors will be investing Rs 100 Crore, Ford about Rs 350 Crore and
Toyota announced modest expansion plans even as Honda Siel has earmarked Rs
3,000 Crore over the next decade for India - a sizeable chunk of this should come
by 2010 since the company is also looking to enter the lucrative small car segment.

.Talking about the commercial vehicle segment, Ashok Leyland and Tata Motors
have each announced well over Rs 1,000 Crore of investment. Mahindra &
Mahindra's joint venture with International Trucks is expected to see an infusion
of at least Rs 500 Crore.

Industry performance in 2008-09

The Indian automotive market managed to stand up to the vagaries of the economic
meltdown to show slightly growth during fiscal 2008-09. Overall vehicle sales at
97.23 lakh grew 0.71 per cent from 96.54 lakh units in 2007-08.

When major automotive markets reported a 30-40 per cent decline, only a handful
of countries managed to show growth. A few months ago, India was looking at
negative growth but has turned around. It is actually better than expected.

Passenger vehicle sales at 15.51 lakh registered flat growth while commercial
vehicle sales showed a 21 per cent drop.

SIAM has a positive outlook for the current financial year. While it foresees a 7-8
per cent growth for the commercial vehicle segment, the industry body predicts a
3-5 per cent growth for passenger vehicles. The three-wheeler segment may grow
5-8 per cent growth while two wheelers may show 3-5 per cent growth.

The passenger vehicle market has weathered the downturn largely due to market
leader Maruti Suzuki which holds 48 per cent of the market. The compact car
giant clocked 7.22 lakh units for 2008-09. Closest rival Hyundai Motor India sold
2.44 lakh cars, a growth of 13 per cent. Tata Motors’ sales grew 1.3 per cent at
2.30 lakh units while Mahindra & Mahindra posted 2.5 per cent growth at 1.06
lakh units.

Most premium carmakers saw volumes shrink last fiscal. Toyota Kirloskar
Motor’s numbers fell 15 per cent to 46,892 units while Ford India’s sales were
down 17 per cent to 27,976 units. Honda Siel Cars India also saw a 17 per cent
drop at 52,420 units while General Motors India was down 8 per cent to 61,526
units.

Among commercial vehicle makers, all major players saw substantial fall in
volumes. Market leader Tata Motors with a 60 per cent plus share, showed 22
per cent drop in numbers at 2.34 lakh units while Ashok Leyland showed 37 per
cent drop at 47,632.
Eicher’s sales volume fell 37 per cent at 17,341 units and Force Motors was down
28 per cent at 7,819 units. “The freight movement is unlikely to improve this
fiscal which will impact truck sales.

Two-wheeler sales grew 2.6 per cent to 74.38 lakh units. “Hero Honda has made
up for the erosion of sales volume for other two-wheeler makers including Bajaj
Auto and TVS Motor Company,” said Mr. Matta. Hero Honda clocked 36.40 lakh
units, a growth of 12.5 per cent. Bajaj Auto’s volumes dropped 23 per cent to
12.86 lakh units while TVS saw a marginal decline at 11.36 lakh units. Honda
Motorcycle and Scooter India’s sales surged 16 per cent to 10.15 lakh units.