The automobile industry in India in 2017 and 2018 Industry profile sales and growth of automobiles in India and in world In detail about the auto industry in India in 2017 the share of different cars and car models in India different cars and originated countries domestic automakers in India

1. INDUSTRY PROFILE
Automobile industry is one of the leading and best industries across the world. From
the day of industrial revolution to till date, automobile industry was given utmost
importance. The reason was that the human beings depend on automobiles because
wants to move from one place to other for doing different works and for transporting
goods and services. When compared with other ways of transportation, Automobiles
are way cheaper and easy to maintain. So because of many other reasons,
Automobiles became part of our lives.
Developed countries like USA, UK, JAPAN and GERMANY, automobile industry
play a crucial role and it is the leading industry. Even in developing countries like
INDAI, CHINA and many more, have seen a great demand for automobiles in 20th
century. Automobile has shown a great impact on society. Automobile industries
have seen ups and down over the period of time.
We all know that Ford model T was one of the best sold cars in the history. Model T
was produced by Ford in 1900’s. It was one of the first mass produces cars in and
around USA. It was the first affordable automobile for middle class family and also
available for the mass market across the world. This was possible because of
introducing assembly line in to the car manufacturing industry. Automobiles are not
new to the man, they are already existed for decades, they where expensive and
scarce. Through the introduction of model T the automobile industry has changed.
Concept of assembly line was adopted quickly by all most all other car manufactures
and by the other industries. By using assembly line the cost, time and inventory came
down, ultimately the cost of the car was way cheaper than it was before.
One of the first car companies to implement assembly line was FORD. Later on in
the world war assembly line was used for the production of military vehicles,
equipment and ammunition. Once the war was over the demand for commercial
vehicles like personal cars and Farm vehicles, equipment has increased a lot, because
all most all countries focused more on Reconstruction and sustainable development.
Till 1950’s, United States of America was the global leader in the production of
motor vehicles, as well as it is the big market. It produces around 60% of automobile
till 1950’s. Because many countries like UK, FRANCE, GERMANY, JAPAN are
recovering from the war. By the end of 1950’s all the other countries have entered in
to the production of automobiles. During 1970’s oil crisis showed great impact on
automobile industry, and production reduced.
By the end of 1980’s they occupy 80% of the production and market. Later on it has
changed. Developing countries has emerged as the leader in automakers. China, India
has increased the production by 40% over the time and it is growing rapidly. Mean
while the productions in other countries are decreasing day by day during 1970’s Oil
Crisis has changed the face of automakers. Till then no one focused on alternatives
for fossil fuels.
The automotive industry designs, develops, manufactures, markets, and sells the
world's motor vehicles.

2. Recent time’s world has seen greater boom in the automobile industry. North
America is leading the market by sales quantity for long time. In 2008 great recession
time Asian market has crossed the sales; after recession the market has seen more
boom. After America Asia is leading the auto market. Major Asian countries are
China, Japan and India.
The above table shows the share according to the continent. Over the period of time
European market and African market share has been reduced when compared with
last 10 years. However the sales in Asian and north American market has raised buy
3% and growing day by day.
The following graph explains the last 10 years growth rate of automobile sales in the
world.
Worldwide, passenger car sales are expected to continue to grow to about 81.6
million units in 2018. Car sales started falling dramatically during the 2008-2009
economic crises. Today, the volume of automobiles sold is back to pre-crisis levels
thanks to increased demand, especially from Asian markets. China is ranked as the
largest passenger car manufacturer in the world, having produced more than 24.8
million cars in 2017, and accounting for almost 34 percent of the world’s passenger
vehicle production.
About 268.8 million vehicles are in use in the United States. Around the world, there
were 1.015 billion cars and light trucks on the road in 2010; they burn over 646
billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly,

3. especially in China and India. In the opinion of some, urban transport systems based
around the car have proved unsustainable, consuming excessive energy, affecting the
health of populations, and delivering a declining level of service despite increasing
investments. Many of these negative impacts fall disproportionately on those social
groups who are also least likely to own and drive cars. The sustainable transport
movement focuses on solutions to these problems.
In 2008, with rapidly rising oil prices, industries such as the automotive industry are
experiencing a combination of pricing pressures from raw material costs and changes
in consumer buying habits. The industry is also facing increasing external
competition from the public transport sector, as consumers re-evaluate their private
vehicle usage. Roughly half of the US's fifty one light vehicle plants are projected to
permanently close in the coming years with the loss of another 200,000 jobs in the
sector, on top of the 560,000 jobs lost this decade.
The global auto industry is more challenged than many people realize. On the
surface, performance is strong. Worldwide sales reached a record 88 million autos in
2016, up 4.8 percent from a year earlier, and profit margins for suppliers and auto
makers (also known as original equipment manufacturers, or OEMs) are at a 10-year
high. Nonetheless, viewed through the lens of two critical performance indicators,
the industry is in serious trouble.
Automotive Industry in India
The automotive industry in India is one of the largest worldwide with more than four
million cars and commercial vehicles produced in India, one of Asia's largest
markets. The automotive sector is growing and becoming more important for Indian
citizens with 14.9 million jobs projected to exist by 2022. It is estimated, during
2017-26, rate of growth of Indian auto industry is going to be 12.87%. In 2017, the
international automotive industry produced 73.5 million passenger cars. Next to
America Asian countries like China and India are leading the market. After recession
Indians are spending more on Automobiles after real estate. In 2011 and 2012 India
occupied 4th
place later it slipped to 5th
place.
Form the graph it is clear that the sales of automobiles in India are rising Year after
the Year, The main reason is the disposable income of the public has raised rapidly
over the period of time.
Even though the income has raised rapidly the auto market is dominated by two

4. wheel sales. Two wheeler production currently dominates the share of Indian
automobile production volume with some 18.8 million two wheelers produced in the
2016 fiscal year. Passenger car exports from India are also growing as evidenced by
some 16.2 percent growth in exports between the 2015-16 and 2016-17 fiscal years.
There’s huge presence of established domestic and international original equipment
manufacturers (OEMs).
The above graph shows year on year growth rate in Indian automobile market and
two wheels are produced more in quantity wise, and it is increasing day by day.
More about the Automobile industry in India
• 4rd largest automobile Industry
• Automobile sector split into four segments, each having few market leaders
• Two-wheelers and passenger vehicles dominate the domestic demand
• Two-wheelers account for 80 per cent of domestic demand
• Commercial vehicle segment expected to grow at 11.07 per cent during 2016-
26
• Strong market in terms of both, the domestic demand and exports.
• 7th largest manufacturer of commercial vehicles
• The only country among top seven car markets globally to achieve double
digit growth rate of 11 per cent during Jan-May 2017.
• Automobile exports to grow at a CAGR of 3.05 per cent during 2016-2026.

5. • Indian automotive industry is expected to reach Rs.16.16-18.18 trillion (US$
251.4-282.8 billion) by 2026.
Even though India is big market in Asia the domestic manufacturers has occupied
only 12% of the market. Japan and Korean Manufacturers’ has occupied nearly
80% of the market. Following graph shows last 5 years market share according to
the country wise originated manufacturers.
Major players in automobile market are Suzuki, Honda and others. Mostly from
Europe we import Mercedes Audi and Volkswagen other brands. From USA mostly
imports are two wheels. Indian government collect nearly 100% tax on many
vehicles that are imported from other countries. Because of that many companies are
establishing their manufacturing plants in India.
In the year 2017 the manufacturers share in Indian according to their share is as
follows.

6. Suzuki is leading the market with 50% of total Indian market. Hyundai is followed
by Suzuki. Domestic manufacturer Mahindra occupied 3rd
place.
Toyota is well known world leader; however it occupies only 4% of Indian market.
India's top 10 bestselling car Brands in 2017
Position BRAND 2017 Sales Market share in %
1 1602522 50.24
2 527320 17.02
3 371379 6.3
4 178755 6.01
5 169854 5.36
6 139566 4.57
7 12489 3.71
8 87588 2.16
9 47796 1.41
10 40443 1.18

7. The above table shows us the total sales of passenger vehicles in India in the year
2017, and ranks according to the sales quantity as well as share of overall market.
In India, Exports grew at 4.3 per cent CAGR between FY12-17. Whereas, Two-
wheeler production estimated to grow at 16 per cent CAGR between FY17-20.
Domestic sales of passenger vehicles are expected to increase at a CAGR of 12.87
per cent during 2017-26. The Indian Automobile industry is getting strong policy
support from government.
Recent Trends in Indian market
Over the time the Hatchbacks are dominating the sales in India. This segment cars occupies
around 50% of the market. Sedans are followed by SUV’s and MUV’s.
Over the time the hatchback sales are readusing and sedan and SUV’s market share
are constantly raising. Now most of the indian customers are focusing more on
SUV’s and Sedans.

8. Luxury Cars:
The luxury car segment has been seeing high growth rates and expanded at 37 per
cent CAGR between FY07-15. Sale of luxury cars stood at 33,279 units in 2016. The
luxury car market in India is expected to grow at 25 per cent CAGR till 2020.
Mercedes-Benz India and BMW Group India recorded their highest ever annual sales
in 2017 at 15,330 units and 9,800 units respectively
With 12th largest population of high net worth individuals (HNIs), India still has
huge room for this segment
New Financing Options:
• Carmakers such as BMW, Audi, Toyota, Skoda, Volkswagen &
Mercedes-Benz have started providing customized finance to
customers through NBFCs
• Major MNC & Indian corporate houses are moving towards taking
cars on operating lease instead of buying them
Electric Cars:
• The Indian government has shifted its focus on electric cars in order to
meet the emission reduction targets. It has aims to sell only electric
cars by 2030 under the National Electric Mobility Mission Plan which
was launched in 2013
• Mahindra has launched its new electric car and Tesla motors are also
set to enter the Indian market very soon. Electric buses from Tata
Motors and Ashok lay land are in testing phase. Suzuki Motors is
setting up a new plant in Gujarat to manufacture lithium ion batteries.
• KIA motors are also set to start an manufacturing plant in Andhra
Pradesh over coming years. Once the sales are increased to the motor
vehicles they are shifting to electric vehicles by 2020.

10. Automotive industry in India is one of the main pillars of the economy. With
strong backward and forward linkages, it is a key driver of growth. Liberalization
and conscious policy interventions over the past few years created a vibrant,
competitive market, and brought several new players, resulting in capacity
expansion in automobile industry and generation of huge employment. Aptly, the
sector was christened as the ‘Sunrise Sector’ of the economy. The contribution
of this sector to the National GDP, rose from 2.77% in 1992-93 to about 7.1%
now. It provides direct and indirect employment to over 19 million people. India is
fast turning into a global automotive hub. However, the sector displays an
uneven growth trajectory, at first taking a hit in 2007-08, then showing marginal
recovery, both in terms of sales as well as in production next year, that led to a
dramatic increase of 25-27% in 2009-10 and 2010-3.5. However, for the last two
financial years in continuation, the industry has gone into recession. Barring the
scooter segment, each and every other vehicle segment showed negative
growth in the year 2013-14, commercial vehicles being the most effected with
(-)21% growth in production and passenger vehicles showing a growth of (-)
4.6% indicating reduced demand among the common people who would have
aspired to buy a passenger car. Even commercial passenger carriers have
shown negative growth in production to the tune of (-)19.86% directly impacting
the growth of public transportation. After a capacity creation of Rs 2200 cr in
2011-12, the automotive industry is now suffering from excess capacity and
suppressed demand leading to lay-offs. Some of the areas causing distress in
the automotive sector are: slowdown in economic growth, high cost of vehicle
finance, high interest rates, high fuel prices, high inflation and negative market
sentiments, increase in the commodity prices, high customs duty on Alloy Steel,
Aluminium Alloy and Secondary Aluminium Alloy, high rate of service tax and
excise duty, high and varied rate of road taxes in the States, low growth of
export markets etc. Ministry of Heavy Industries and Public Enterprises has been
consistently taking up the matter of providing some kind of stimulus package
with prompt fiscal and other measures to put the industry back on track. As a
result, in the interim budget for the year 2014-15, reduction in excise duty in
case of cars, two wheelers and truck chassis was announced. Further, some
other measures are urgently required to be taken, such as, removal of customs
duty of raw materials such as steel. Aluminium etc. revisit of CENVAT rules,
review of import policy, duty draw back schemes, excise and customs rules,
direct tax benefit to promote automotive R&D, and , above all, containing
inflation and control of interest rates to make loans more affordable to the people
etc. Immediate steps are required so that the Indian Auto Industry once again
becomes the engine of growth of the Indian manufacturing sector.