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Size of Indian Automobile Industry

By: EconomyWatch Date: 30 April 2010

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Since its inception in 1898, the Size of Indian Automobile Industry has grown over the years. One of the major contributors in the progress of Indian economy, the automotive industry of India also plays a major role in the development of the transport network of the country.

A wide range of vehicles are produced by the manufacturers of Indian Automobile Industry. These include two-wheelers like motorcycles, scooters and mopeds, three-wheelers, passenger cars, multi-utility vehicles, heavy, medium and light commercial vehicles.

The automotive industry of India comprises 15 passenger cars and multi-utility vehicles' manufacturers, 14 manufacturers of two and three-wheelers, 9 commercial vehicles' manufacturers and 14 tractor manufacturers. 5 engine manufacturers are also present.

The amendments in the government policies have helped in the development of the Indian automobile industry. According to the new policies, 100% Foreign Direct Investment is allowed. Foreign Direct Investment is also permissible in the segment of passenger cars.

Indian automobile industry is known for its achievements in various segments. India is known for the following:

Largest two-wheeler manufacturer in the world
Largest three-wheeler market in the world
Second largest tractor manufacturer of the world

Fifth largest commercial vehicle manufacturer in the world

S. No	Production	2005-2006	2005-2006 (Apr-Nov.2005)	2006-2007(Apr-Nov.2006)
1.	Two-wheelers	7600801	4990487	5739861
2.	Three-wheelers	434424	275579	361525
3.	Cars	1045881	666898	792446
4.	Commercial Vehicles	391078	247277	325475
5.	Multi-Utility Vehicles	263032	263032	173407
	Total	9735216	6353648	7414420

The export section of the automotive industry of India has also achieved huge success in recent years. Vehicles as well as component parts are exported from India to foreign countries. This has also given a boost to the Indian economy. The details of the exports of the Indian Automobile Industry is as follows:

S. No.	Production	2005-2006	2005-2006 (Apr-Nov.2005)	2006-2007(Apr-Nov.2006)
1	Two-wheelers	513256	343446	430412
2	Three-wheelers	76885	50805	89039
3	Cars	170193	113280	126734
4	Commercial Vehicles	40581	24443	31363
5	Multi-Utility Vehicles	76885	50805	89039
	Total	806494	535588	681531

The investment in the automotive industry of India was more than Rs. 50,000 crore in 2002-03 and the estimated investment in the year 2007 is about Rs.80,000 crore. The annual turnover of the Indian automobile industry Rs. 1,65,000 crore (34 billion USD).

The contribution of the Indian automotive industry in the GDP has increased to 5% in 2005-06 from 2.77% in 1992-93. The annual growth rate in terms of production have reached 16.07% in 2006-07. The growth rate in the exports of automobile industry of India has risen to 27.25% in 2006-07.

The ever increasing size of the Indian automobile industry showcases the growth of this section of trade and industries of the country. The expansion, the profit and the liberalized policies have also attracted foreign investment in this sector.