Indian Car Market

The automotive industry in India is one of the largest automotive markets in the world. It was previously one of the fastest growing markets globally, but it is currently experiencing flat or negative growth rates. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand, overtaking Thailand to become third in 2010. As of 2010, India was home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making India the second fastest growing automobile market in the world (after China). India's passenger car and commercial vehicle manufacturing industry recently overtook Brazil to become the 6^th largest in the world with an annual production of more than 3.9 million units in 2011. From 2011 to 2012, the industry grew 16-18%, selling around three million units.  According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, not 5 million as previously projected.

In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made US$6 million in annual revenue with profits close to US$400 thousand.

Weighed down by crippling economic slowdown and high interest rates, car sales in 2014 fell below the numbers sold even in the year 2010, highlighting the depression in the Indian car market, once seen as the brightest spot in the global automotive space. 

So what ails the Indian car market and why have the numbers moved in reverse gear? RC Bhargava, Chairman of Maruti Suzuki, reasons that lack of focus on manufacturing is among the major reasons that kept the Indian economy from taking off. "Had the previous governments focused on boosting the manufacturing sector and ushered in crucial reforms, the car industry would have also flourished," Bhargava told TOI as he lauded the Modi's government's efforts to promote manufacturing through campaigns like 'Make in India'. 

The poor run of the Indian car market has also seen some of the relatively-new investments go sour. Europe's top carmaker Volkswagen, that started a new factory in India in 2010 amidst much fanfare, has failed to take off meaningfully. The company has drastically cut its 2018 group market share target for India to single digit from the high 18% targeted earlier.

With the increasing growth in demand on back of rising income, expanding middle class and young population base, in addition to a large pool of skilled manpower and growing technology, will propel India to be among the world's top five auto-producers by 2015.

The automobile industry accounts for 22 per cent of the country's manufacturing gross domestic product (GDP). The auto sector is one of the biggest job creators, both directly and indirectly. It is estimated that every job created in an auto company leads to three to five indirect ancillary jobs.

India is expected to become a major automobile manufacturing hub and the third largest market for automobiles by 2020, according to a report published by Deloitte.

India is currently the seventh-largest automobiles producer in the world with an average annual production of 17.5 million vehicles, and is on way to become the fourth largest automotive market by volume, by 2015.

With the increasing growth in demand on back of rising income, expanding middle class and young population base, in addition to a large pool of skilled manpower and growing technology, will propel India to be among the world's top five auto-producers by 2015.

The automobile industry accounts for 22 per cent of the country's manufacturing gross domestic product (GDP). The auto sector is one of the biggest job creators, both directly and indirectly. It is estimated that every job created in an auto company leads to three to five indirect ancillary jobs.

India is expected to become a major automobile manufacturing hub and the third largest market for automobiles by 2020, according to a report published by Deloitte.

India is currently the seventh-largest automobiles producer in the world with an average annual production of 17.5 million vehicles, and is on way to become the fourth largest automotive market by volume, by 2015.

The growth story for the Indian automobile industry in 2014 rode on the two-wheeler segment. The segment has clocked positive growth at 12.9 percent year-on-year to reach sales of nearly 13.5 million units by October 2014.

India's automobile sector has also picked up pace, with eight of the country's leading manufacturers' reporting combined passenger vehicle sales of 198,427 in November 2014, a 10 per cent annual rise. The rise in sales in November 2014 was led by Maruti Suzuki, whose sales increased 17 per cent to 100,024 units in the domestic market.

The commercial vehicles (CV) industry in India has registered an increase of 8.59 per cent in September 2014, as fleet owners have started to buy trucks in the anticipation of an improved economic activity.

The automobile sector in Andhra Pradesh has a potential for US$ 1 billion investment and US$ 1.50 billion output, according to a recent analysis by Automotive Components Manufacturers’ Association of India (ACMA) and city-based Andhra Chamber of Commerce and Industry Federation (ACCIF).

India is probably the most competitive country in the world for the automotive industry. It does not cover 100 per cent of technology or components required to make a car but it is giving a good 97 per cent, highlighted Mr Vicent Cobee, Corporate Vice-President, Nissan Motor’s Datsun.

The vision of AMP 2006-2016 sees India, “to emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion; accounting for more than 10 per cent of the GDP and providing additional employment to 25 million people by 2016.”