AUTO INDUSTRY The year 1898 saw the first car rolling out, on the streets of Mumbai. A land of Premier Padminis, Ambassadors, scooters, temps, trucks and autos galore, India had not seen much of choice in vehicles. Since then Indian auto industry has witnessed a lot of change.
PROTECTIONISM – EARLY 1980s The manufacturing of automobiles especially cars was subject to strict licensing, restrictive tariff structure and limited avenues for expansion. The foreign technology collaboration came with the inception of Maruti Udyog in collaboration with Suzuki of Japan in the passenger car segment. Indian roads saw the launch of Maruti 800. It was still not very easy to own a car, first was affordability and next was a long waiting period.
LIBERALISATION – 1990s With liberalization, some more Japanese manufacturers entered the two-wheeler and the commercial vehicle segment in a collaborative arrangement. This period characterized joint ventures in India and the market started opening up. Automobile Industry was delicensed in July 1991 with the announcement of the New Industrial Policy. The passenger car industry was, however, delicensed in 1993.
The era of controls and protection came to an end. Decrease in customs and excise duties meant that a vehicles started getting affordable. The entry of foreign banks with attractive auto finance schemes helped garner a huge base of middle class population. However the market was still ruled by the sellers.
GLOBALISATION – 2000s A Core Group on Automotive Research and Development (CAR) was established in 2003 for encouraging R&D activities. Indian economy also witnessed rapid industrialization. Factories needed transport both for goods and for their employees. Pushed the demand for efficient logistics and that in turn increased the number of commercial vehicles.
GROSS TURNOVER YEAR (IN USD MILLION)2004-2005 20,8962005-2006 27,0112006-2007 34,2852007-2008 36,6122008-2009 38,238 Source: Society of Indian Automobile Manufacturers (SIAM)
RECENT FACTS & FIGURES In 2010-11, the overall domestic passenger car sales rose by 29.73 per cent to 19,82,702 units from 15,28,337 units in the previous fiscal. Hyundai Motor India also saw its market share declining to 18.10 per cent in FY 2011 from 20.61 per cent in the previous year. Tata Motors too lost its market share during the said period, falling to 12.92 per cent with sales of 2,56,202 units. General Motors India (GMI) and Honda Siel cars India (HSCI) also lost their market share last fiscal. While GMIs share fell to 4.40 per cent from 4.62 per cent,
MAJOR PLAYERS IN THE INDUSTRY•Mahindra • Hyundai Motor India & Mahindra Limited• Maruti Suzuki •Ashok LeylandIndia Ltd
OTHER PLAYERS IN THE INDUSTRYTATA Motors • The Bajaj Group• Hero Group • Ford India
GLOBAL PLAYERS IN INDIA Audi Honda Mercedes Ferrari Nissan BMW
MARKET SHARE OF DIFFERENTVEHICLES IN THE INDIAN AUTOMOBILE INDUSTRY Passenger Vehicles : 15.86% Commercial Vehicles : 4.32% Three Wheelers : 3.58% Two Wheelers : 76.23%
CHALLENGES Rising oil price Chinese Competition Human resources Environmental Issue Nurturing Talented Low R&D Orientation Manpower Rising cost of raw Fuel Technology materials Increasing rates of Too much competition interest
IMPACT OF GLOBAL CRISIS ON INDUSTRY The automotive industry crisis of 2008–2010 was a part of a global financial downturn The crisis affected European and Asian automobile manufacturers, but primarily felt in the American automobile manufacturing industry Citing falling production numbers, the State Bank of India reduced interest rates on automotive loans in February 2009 Manufacturer hopes the low cost will encourage customers to purchase the vehicle despite the ongoing credit crisis
RECENT TRENDS Unlike in the past, the Indian Government has gone through a total role reversal by becoming the enabler rather than the controller. In the recent past it has started providing better infrastructure, conducive atmosphere to attract investments and implementing growth oriented economic policies.
Competition: Immense pressure has grown on the Indian companies. A lot of joint ventures have taken place, some others have invested heavily on R&D.
Customer: Armed with higher buying power and an ever increasing expectation from products and services, the customer is undoubtedly the king and has propelled a fierce competition among the major players in the market.
Safety Norms: cars as well as two-wheelers have met the most stringent international norms of pollution. Euro II vehicles have become the norm of the day all over India. Unfortunately, in the Indian context, safety in motor vehicles is a relatively neglected area. Bad roads coupled with the absence of adequate safety features in the vehicles such as airbag and crumple zone needs immediate attention. But awareness is on the increase and the use of seat belts while driving has been made mandatory.
Bikes: Keeping apace with the global trends the two-wheeler segment has witnessed tremendous growth both qualitatively and quantitatively. Bikes with higher engine capacities have done commendably well on the Indian roads. Bike styling and fuel efficiency has also seen major developments