The automotive industry in India has experienced significant growth in recent decades. It is now the seventh largest producer of vehicles worldwide, with annual production exceeding 11 million vehicles and exports of around 1.5 million vehicles. Major automakers like Hyundai, Nissan, and General Motors are exporting hundreds of thousands of vehicles manufactured in India to global markets each year. India has emerged as a leading center for small car manufacturing due to its strong engineering capabilities and expertise in producing low-cost and fuel-efficient vehicles. However, continued growth will depend on the broader economy sustaining its expansion.

1. Industry Profile
The automotive industry designs, develops, manufactures, markets, and sells the
world's motor vehicles. The automotive industry is one of the most
important economic sectors by revenue.
The term automotive industry usually does not include industries dedicated to
automobiles after delivery to the customer, such as repair shops and motor
fuel filling stations.
Worldwide Trends
In 2007, worldwide production reached a peak at a total of 73.3 million new motor
vehicles produced worldwide. In 2009, worldwide motor vehicle production
dropped 13.5 percent to 61 million. Sales in the U.S. dropped 21.2 percent to 10.4
million units; sales in the European Union (supported by scrapping incentives in
many markets) dropped 1.3 percent to 14.1 million units. China became the world's
largest motor vehicles market, both by sales as by production. Sales in China rose
45 percent in 2009 to 13.6 million units. In recent years, private Chinese
manufacturers emerge.
About 250 million vehicles are in use in the United States. Around the world, there
were about 806 million cars and light trucks on the road in 2007; they burn over
260 billion gallons of gasoline and diesel fuel yearly. 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.
History
The first practical automobile with a petrol engine was built by Karl Benz in 1885
in Mannheim, Germany. Benz was granted a patent for his automobile on 29
January 1886, and began the first production of automobiles in 1888, after Bertha

2. Benz, his wife, had proved with the first long-distance trip in August 1888 -
from Mannheim to Pforzheim and back - that the horseless coach was absolutely
suitable for daily use. Since 2008 a Bertha Benz Memorial Route commemorates
this event.
Soon after, Gottlieb Daimler and Wilhelm Maybach in Stuttgart in 1889 designed a
vehicle from scratch to be an automobile, rather than a horse-drawn carriage fitted
with an engine. They also are usually credited as inventors of the
first motorcycle in 1886, but Italy's Enrico Bernardi, of the University of Padua, in
1882, patented a 0.024 horsepower (17.9 W) 122 cc(7.4 cu in) one-cylinder petrol
motor, fitting it into his son's tricycle, making it at least a candidate for the first
automobile, and first motorcycle; Bernardi enlarged the tricycle in 1892 to carry
two adults.
Automotive industry crisis of 2008–2010
The automotive industry crisis of 2008–2010 was a part of a global financial
downturn. The crisis affected European and Asian automobile manufacturers, but it
was primarily felt in the American automobile manufacturing industry. The
downturn also affected Canada by virtue of the Automotive Products Trade
Agreement.
The automotive industry was weakened by a substantial increase in the prices
of automotive fuels linked to the 2003-2008 energy crisis which discouraged
purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel
economy. The popularity and relatively high profit margins of these vehicles had
encouraged the American "Big Three" automakers, General Motors, Ford,
and Chrysler to make them their primary focus. With fewer fuel-efficient models to
offer to consumers, sales began to slide. By 2008, the situation had turned critical
as the credit crunch placed pressure on the prices of raw materials.
Car companies from Asia, Europe, North America, and elsewhere have
implemented creative marketing strategies to entice reluctant consumers as most
experienced double-digit percentage declines in sales. Major manufacturers,
including the Big Three and Toyota offered substantial discounts across their
lineups. The Big Three faced criticism for their lineups, which were seen to be

3. irresponsible in light of rising fuel prices. North American consumers turned to
higher-quality and more fuel-efficient product of Japanese and European
automakers. However, many of the vehicles perceived to be foreign were actually
"transplants," foreign cars manufactured or assembled in the United States, at
lower cost than true imports.
Effect of 2008 oil price shock and economic crisis
In 2008, a series of damaging blows drove the Big Three to the verge of
bankruptcy. Part of the cause was very high labor costs (much higher than the
foreign plants in the U.S.). The Big Three had in recent years
manufactured SUVs and large pickups, which were much more profitable than
smaller, fuel-efficient cars. Manufacturers made 15% to 20% profit margin on an
SUV, compared to 3% or less on a car. When gasoline prices rose above $4 per
gallon in 2008, Americans stopped buying the big vehicles and Big Three sales and
profitability plummeted. Robert Samuelson has advocated a more consistent
energy policy, arguing "wild swings between low and high fuel prices have
crippled the U.S. industry by erratically shifting buyer preferences -- to and from
SUVs.
The financial crisis played a role, as GM was unable to obtain credit to buy
Chrysler Sales fell further as consumer credit tightened and it became much harder
for people with average or poor credit to obtain a bank loan to buy a car. During
2007, nearly 2 million new U.S. cars were purchased with funds from home equity
loans. Such funding was considerably less available in 2008. In addition, stock
prices fell as shareholders worried about bankruptcy; GM's shares fell below 1946
levels. Furthermore, the instability of the job market and individual consumers'
finances discourages consumers who already have a working vehicle from taking
on a new loan and payments, which affected almost all major manufacturers.
The annual capacity of the industry is 17 million cars; sales in 2008 dropped to an
annual rate of only 10 million vehicles made in the U.S. and Canada. All the
automakers and their vast supplier network account for 2.3% of the U.S. economic
output, down from 3.1% in 2006 and as much as 5% in the 1990s. Some 20% of
the entire national manufacturing sector is still tied to the automobile industry. The
transplants can make a profit when sales are at least 12 million; the Big Three

4. when sales are at least 15 million. The crisis has affected auto companies around
the world, with large sales decreases experienced by all. As of December 19, 2008,
oil prices had fallen to $33.87 per barrel, but the automobile crisis continues.
World motor vehicle production
Year Production Change
1997 52,987,000
1998 57,987,000 -2.70%
1999 56,258,892 2.98%
2000 58,374,162 3.80%
2001 56,304,925 -3.50%
2002 58,994,318 4.80%
2003 60,663,225 2.80%
2004 64,496,220 6.30%
2005 66,482,439 3.10%
2006 69,222,975 4.10%
2007 73,266,061 5.80%
2008 70,520,493 -3.70%

5. 2009 60,986,985 -13.50%
Country 1,000,000 2,000,000 3,000,000 4,000,000
China
Japan
United States
Germany
South Korea 3,512,916
Brazil 3,182,617
India 2,632,694
Spain 2,170,078
France 2,049,762
Mexico 1,557,290
Canada 1,489,651
Iran 1,395,421
United Kingdom 1,090,139
Czech Rep. 974,569
Thailand 968,305
Poland 879,186
Turkey 869,605
Italy 843,239
Russia 722,431
Belgium 522,810

6. INDIA
The Automobile industry in the Republic of India is the seventh largest in the
world with an annual production of over 11 million vehicles and exports of about
1.5 million. In 2009, India emerged as Asia's fourth largest exporter of
automobiles, behind Japan, South Korea and Thailand. By 2050, the country is
expected to top the world in car volumes with approximately 611 million vehicles
on the nation's roads. A major chunk of India's car manufacturing industry is based
in and around the city of Chennai and hence it is known as "Detroit of India".
Chennai accounts for 60 per cent of the country's automotive exports.
History
Following economic liberalization in India in 1991, the Indian automotive industry has
demonstrated sustained growth as a result of increased competitiveness and relaxed
restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti
Suzuki and Mahindra and Mahindra, expanded their domestic and international
operations. India's robust economic growth led to the further expansion of its domestic
automobile market which attracted significant India-specific investment by
multinational automobile manufacturers. In February 2009, monthly sales of passenger
cars in India exceeded 100,000 units.
The first car ran on India's roads in 1897. Till the 1930s, cars were imported directly.
Embryonic automotive industry emerged in India in the 1940s. Following
the independence, in 1947, the Government of India and the private sector launched
efforts to create an automotive component manufacturing industry to supply to the
automobile industry. However, the growth was relatively slow in the 1950s and 1960s
due to nationalization and the license raj which hampered the Indian private sector.
After 1970, the automotive industry started to grow, but the growth was mainly driven by
tractors, commercial vehicles and scooters. Cars were still a major
luxury. Japanese manufacturers entered the Indian market ultimately leading to the
establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with
Indian companies.

7. In the 1980s, a number of Japanese manufacturers launched joint-ventures for
building motorcycles and light commercial-vehicles. It was at this time that the Indian
government chose Suzuki for its joint-venture to manufacture small cars. Following the
economic liberalization in 1991 and the gradual weakening of the license raj, a number
of Indian and multi-national car companies launched operations. Since then, automotive
component and automobile manufacturing growth has accelerated to meet domestic
and export demands.
Exports
India has emerged as one of the world's largest manufacturers of small cars. According
to New York Times, India's strong engineering base and expertise in the manufacturing
of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of
several automobile companies like Hyundai
Motors, Nissan, Toyota, Volkswagen and Suzuki.
In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors
plans to export 250,000 vehicles manufactured in its India plant by
2011. Similarly, General Motors announced its plans to export about 50,000 cars
manufactured in India by 2011.
In September 2009, Ford Motors announced its plans to setup a plant in India with an
annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both
for the Indian market and for export. The company said that the plant was a part of its
plan to make India the hub for its global production business. Fiat Motors also
announced that it would source more than US$1 billion worth auto components from
India.
According to Bloomberg L.P., in 2009 India surpassed China as Asia's fourth largest
exporter of cars.
In recent years, India has emerged as a leading center for the manufacture of small
cars. Hyundai, the biggest exporter from the country, now ships more than 250,000 cars
annually from India. Apart from shipments to its parent Suzuki, Maruti Suzuki also
manufactures small cars for Nissan, which sells them in Europe. Nissan will also export
small cars from its new Indian assembly line. Tata Motors exports its passenger

8. vehicles to Asian and African markets, and is in preparation to launch electric vehicles
in Europe in 2010. The firm is also planning to launch an electric version of its low-cost
car Nano in Europe and the U.S. Mahindra & Mahindra is preparing to introduce its
pickup trucks and small SUV models in the U.S. market. Bajaj Auto is designing a low-
cost car for the Renault Nissan Automotive India, which will market the product
worldwide. Renault Nissan may also join domestic commercial vehicle
manufacturer Ashok Leyland in another small car project. While the possibilities are
impressive, there are challenges that could thwart future growth of the Indian
automobile industry. Since the demand for automobiles in recent years is directly linked
to overall economic expansion and rising personal incomes, industry growth will slow if
the economy weakens.
Domestic Indian automotive companies
Chinkara Motors: Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster,
Sailster
 Hindustan Motors: Ambassador
 ICML: Rhino Rx
 Mahindra]: Major, Xylo, Scorpio, Bolero
 Premier Automobiles Limited: Sigma, RiO
 San Motors: Storm
 Tata Motors: Nano, Indica, Indica Vista, Indigo, Indigo Manza, Indigo
CS, Sumo, Safari, Xenon, Aria

9. Foreign automotive companies in India
Vehicles manufactured or assembled in India
 BMW India: 3 Series, 5 Series.
 Fiat India (in collaboration with Tata Motors): Grande Punto, Linea, Palio Stile.
 Ford India: Ford Figo, Ikon, Fiesta, Endeavour.
 General Motors India
 Chevrolet (CSPIL): Spark, Beat, Aveo U-VA, Aveo, Optra, Cruze, Tavera.
 Honda Siel: Jazz, City, Civic, Accord.
 Hyundai Motor India: Santro, i10, i20, Accent, Verna Transform, Sonata Transform.
 Mahindra Renault: Logan
 Maruti Suzuki: 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift
DZire, SX4, Omni, Versa, Eeco, Gypsy, Grand Vitara
 Mercedes-Benz India: C-Class, E-Class.
 Mitsubishi (in collaboration with Hindustan Motors): Lancer, Lancer Cedia
 Nissan Motor India: Micra.
 Toyota Kirloskar: Corolla, Innova, Camry.
 Volkswagen India: Polo, Jetta, Passat.
 Audi India: A4, A6, Q5.

10.  Škoda Auto India: Fabia, Octavia, Laura,Superb.