Concluding Remarks on Indian Automobile Industry

Termed as the “Sunrise Sector” by the Indian Prime Minister Manmohan Singh, the growth of the automobile sector in the coming years is something to look forward to. Within a decade, the automobile industry in India has witnessed tremendous change. Foreign brands have also made their presence felt in the automobile industry

Termed as the “Sunrise Sector” by the Indian Prime Minister Manmohan Singh, the growth of the automobile sector in the coming years is something to look forward to. Within a decade, the automobile industry in India has witnessed tremendous change. Foreign brands have also made their presence felt in the automobile industry

Automobile industry has managed to script a success story within a span of a few years. The tremendous growth that it registered has made India one of the growing automobile markets in the world. At present the automobile industry employs almost half a million people who are part of the organized sector. It also employs about ten million people through the unorganized sector. India has also emerged as a center for automobile research and development. With estimates pointing the growth in the number of vehicles to 1.3 billion within 2030, the future of the Indian automobile industry surely seems promising enough.

There have been large scale investments in the Indian automobile sector. Available statistics indicate that the sector is expected to record investment of Rs 30,000 crore. It is not only regarded as a potential market but also as a base for supplying and manufacturing of auto parts by global automotive giants. The introduction of new technology has given an impetus to the growth of the industry.

The growth of the industry is attributed to numerous factors. The last decade has witnessed a steep rise in the per capita disposable income of the population. Moreover, there are more dual income families these days. The average age of first time car users has also come down. Ownership cost is comparatively low than earlier and the production of steel has also gone up considerably. Buying a car these days is easy with the availability of numerous financing options.

The growth has become evident from the sales record in the domestic market. It shows that the sales have risen at CAGR of 14.27% in the years from 2001-02 to 2005-06. The sale of commercial vehicles has gone up at CAGR of 24.35% while passenger vehicles have recorded a CAGR of 18.24%.

Exports in the automobile sector have also increased considerably and thus boosted its development. The export records in the automobile sector suggest that the highest annual growth rate has been 61.42% from 2001-02 to 2005-06.

Some of the major players in the auto market include Maruti Udyog Limited, Mahindra & Mahindra Limited, Tata Motors Limited, Ashok Leyland Limited, Hyundai Motor India Limited, Hero Honda Motors Limited, TVS Motor Company Limited, Toyota Motors and Bajaj Auto Limited.

At present the industry is working as per the dynamics of an open market. The international collaborations with leading automobile manufactures in terms of both finances and technicalities have put India on the global map. Joint ventures have also been carried out in the auto components sector. The national Government is also putting its best foot forward in creating a desirable business and economic environment in view of investments worth $5.7 billion. With everything in favor of it, the Indian automobile industry is poised to make it big in the global arena.