The document traces the history of automobiles from the first steam-powered vehicle created in 1769 to the introduction of gasoline-powered internal combustion engines in 1885. It then discusses the growth of the automobile industry in India, starting with a few domestic manufacturers in the 1940s and experiencing rapid growth after economic liberalization in the 1990s, which attracted many global automakers to set up assembly operations in India. The industry now contributes significantly to India's GDP and employment.

2. 
The design of the
Cugnot Steam
Trolley (1769)

History of the automobile begins as
early as 1769, with the creation of
steam-powered automobiles capable
of human transport In 1806.
The first cars powered by internal
combustion engines running on fuel gas
appeared, which led to the introduction
in 1885 of the ubiquitous modern
gasoline or petrol-fueled internal
combustion engine.

3. AUTOMOBILE
2 WHEELER
3 WHEELER
L.C.V.
MOTORCYCLE
SCOOTERS
PASSENGER
VEHICLE
COMMERCIAL
VEHICLE
M.C.V.
H.C.V.
SCOOTERETTES
MOPEDS

4. Globally Diesel cars are less in demand
vs the demand in India.
Prices of cars globally are cheaper
compared to the prices in India
Eg: Toyota Fortuner in Thailand 11 lakhs
approx vs Toyota Fortuner in India 27 lakhs
Emission norms very strict abroad
compared to India
Global market turning green as
compared to the Indian market.

5. In India high end cars
are only imported.
Indian fuel prices are
regulated. Developed
countries fuel prices are
unregulated.
Poor road condition in
the country is a big
challenge for the
automobile industry.
India is more prone to
hatch back and small
cars while developed
countries are inclined
towards spacious and
luxurious cars.
Safety norms in the
Indian automobile
industry is yet to pick up
while internationally
there are high safety
standards and norms.

6. •
•
Hindustan Motors – the
first Indian Car
company to start
production in India founded in 1942 by Mr.
B.M. Birla; Ambassador –
The flagship car
Establishment of other
car manufacturing
companies like Premier
Automobiles(1944);
Premier Padmini – The
flagship car, now also
used for cab services

7. Growth very slow because of Low Demand and
Low Economic Status of the country
Government restrictions provided no motivation or incentive for firms to
do technological upgradation.
Supply was low and there weren’t many competitors
Impact on Consumers –Consumers did not have
many choices; the Demand was fairly low as Cars
were still a Luxury and availability of same models

8. •
•
Sanjay Gandhi owned Maruti Technical Services
Limited which was liquidated
After his death, Indira Gandhi government
collaborated with Suzuki Motors, a Japanese firm, for
collaboration – Formation of Maruti Udyog Limited
and renamed later Maruti Suzuki in 2007
+
=

9. •
Policy changes introduced in 2 doses:
1.
Partial de-regulation in 1985 – eased
licensing requirements, allowed
selective capacity-expansion, partial
relaxation of controls with regard to
foreign collaboration, imports.
However, trade and investment
regulations continued,
constraining
growth of big business houses.
2. 1991 policy changes – Dispensed
with bulk controls and regulations
•
Partial de-regulation allowed
technology inflow into India

10. •
New Industrial Policy in July 1991 by Congress
Government led by Mr. Narsimha Rao:

•
It introduced Liberalization policies – Abolishment
of License Raj
April 1993 – Government removed motor cars from
list of industries reserved for compulsory licensing

11. •
•
•
New firms, including
foreign players, entered
with modern engineering,
efficient processes and
modern shop-floor layouts
Indian automobile industry
grew at 14.31% per annum
in post-1991 era
compared to 8.56% per
annum during 1985-91
Delicencing of sector
attracted many major
Global OEMs (GM, Ford,
Honda, Hyundai etc.) to
start assembly in India

12. Finance Bill 2006 – reduction of excise duty
on small motor vehicles, reduction in duty of
raw materials from 10% to in-between 5%7.5% - Infrastructure boost
Extension of 150% weighted tax deduction
on R&D expenditure – increase in budgetary
allocation towards R&D
Allowing automatic approval for foreign
equity investment upto 100%, with no
minimum investment criteria

14. Key Segment
Of The
Economy
It
Contributes
About 4% In
India's GDP
And 5% In
India's
Industrial
Production.
Generates
About 4.5
Lakh Of
Direct
Employment
And About
One Crore Of
Indirect
Employment.
Developed
Globally
Competitive
Auto
Ancillary
Industry And
Established
Automobile
Testing And
R&D Centers.
The Lowest
Cost
Producers Of
Steel In The
World.

15. Intense
competition
amongst various
players
30th December
1998 - Indica
launched by Telco
for `2,59,000
(petrol) and
`2,85,000
(Diesel)
31st December
1998 – Maruti
slashes prices by
5-12%; Maruti
800 price slashed
to `1,85,000
from `2,09,000
Ratan Tata –
“Even for those
who do not own
or buy an Indica,
good news, we’ve
triggered price
drops in Maruti
and made the car
market a
friendlier place”

16. •
Tata has come up with ` 1 Lakh car – Tata
Nano
•
This again has created price war
•
Nissan-Renault to develop a $3000 car using
India’s “frugal engineering expertise”
•
Bajaj to experiment with the idea of a small
car

17. In the Passenger Car category, Maruti Suzuki is still the
market leader with around 50% market share

18. •
Considering huge market potential, production of
passenger cars is projected to grow at CAGR of
11% between 2010-11 and 2013-14.
 Comparison:
•
1982
•
2009:
Number of manufacturers: 3
Vehicle sales: 20000
Number of models: 3
Number of manufacturers: 15
Vehicle sales: 19,80,000 approx.
Number of models: 53

19. Passenger
Cars
52%
17%
19%
-
1%
5%
2%
2%
2%
1%
-
<1%
<1%
Utility
Vehicles
2%
18%
1%
42%
21
%
1%
10
%
1%
<1
%
-
4%
-
<1%
Multi
Purpose
Vehicles
100%
-
-
-
-
-
-
-
-
-
-
-
<1%
4th largest Passenger
Vehicle Market in Asia

20.  Diesel
car or a Petrol car?
 Important
for consumers to know they're
getting value for money when they buy a
car.
 Petrol
car running cost is Rs.5/KM where
as Diesel car running cost is Rs.2.5/Km.

21. 

Less KM Run people prefer Petrol cars
and for more KM Run people prefer
Diesel cars.
Petrol car users= 1/ KM Run.
Business class prefer Diesel car more
than Petrol Cars, Where as Service class
prefer more petrol car than diesel car

22. 100
82
90
78
72
80
62
70
60
51
44
45
50
Petrol
39
32
Diesel
Both
40
30
14
20
10
21
18
5
10
10
12
6
4
0
Better Resale Value
More Fuel
Consumption
More Comfortable
More Expensive for
Maintenance
More Economic
More Happier

23. Year
Petrol Price
Diesel Price
Jun-10
51.43
39.88
Dec-10
55.87
41.98
Dec-11
65.64
45.84
May-12
70.18
46.17
Dec-12
71.02
46.25
Jul-13
77.73
58.29
Nov-13
79.49
59.46

24. 90
80
70
60
50
Petrol
Diesel
40
30
20
10
0
Jun-10
Dec-10
Dec-11
May-12
Dec-12
Jul-13
Nov-13

25. 



Customer like to go for Petrol vehicle for
advantage of less maintenance cost and
less Purchase price
Customer like to go for Diesel vehicle for
getting the advantage of extra Mileage &
better features
Customer buying a Diesel vehicle is not
much bothered about the price of the
vehicle
Customer buying Petrol vehicle is not much
bothered about the mileage of the vehicle

26.  Convergence
of government policies
 Economy’s growth
 Increase in People’s purchasing power.
 Pursuit of better lifestyle
 Growth in the road infrastructure

27.  Relatively
inelastic demand for Mercedes
car owner compared to a Maruti Suzuki
car owner who will have a relatively
elastic demand
when it comes to charging him for
service .
This is because owner of mercedes wont
mind in paying higher amount.

29. The change in price of
Honda Jazz from
7,25,000 to 6,10,000 in
2012 lead to substantial
increase in quantity
demanded for Jazz from
316 units in 2009 to
1209 units in 2012.


This effect explains that the
automobile market in India is
highly price sensitive when it
comes to middle level segment
cars.

30. The
increase in price of Audi A6 in India from 50,25,000 to 51,90,000
in 2012 lead to very small decrease in quantity demanded for Audi
A6 from 712 units in 2011 to 689 units in 2012.
This
shows that consumers are very less price sensitive when it comes
to luxury cars.

32.  CRISIL
Reports
 http://auto.indiamart.com/
 http://www.wikinvest.com
 http://india-reports.in
 http://wheelsunplugged.in/
 http://en.wikipedia.org