India has a large population and is the second largest two wheeler market and 13th largest commercial vehicle market in the world. Government policies aim to promote the automotive industry through foreign investment and developing vehicles with alternate energy sources. The industry benefits from a stable political system, effective judicial system, and tax deductions for research and development. However, infrastructure lacks transportation infrastructure. Growth in the economy, manufacturing sector, urbanization, and income levels is increasing demand for small cars and fuel efficient vehicles. Global companies establishing manufacturing plants in India has increased technology and fueled development of alternate fuels and hybrid vehicles. The automobile market is expected to grow to $120-159 billion with 13% growth over the next decade, attracting major global players

1. PESTL Analysis Of
India
Automobile Industry
1

2. Developing Country with 1.21 billion population
Protectionist Economic Policy
2nd Largest Two Wheeler Market
13th largest Commercial Vehicle Market
World’s largest three wheeler market
2

3. Aimed at promoting an integrated, phased
growth of the Indian automotive industry.
No minimum criteria for foreign
investment
Assist development of vehicles propelled
by alternate energy sources
3

4. Effective
Judicial System
Political stability
Allow tax
deduction for
R&D activities
4

5. Lack of
transportation
infrastructure
Wide
Financing
Low interest
rates
Mature
Market
5

6. Economy
growth 8.5%
Manufacturing
sector growth
8-10%
Overloading
Restriction
Established
Manufacturing
Hub
6

7. Upward
migration in
income
levels
Small cars
Fuel
Efficiency
Growth in
urbanization
7

8. With the entry of global companies into the
Indian market, advanced technologies ,both in
product and production processes have
developed.
Evolution of alternate fuels, hybrid cars have
made entry into the market.
Few global companies have setup
their R&D centre in India.
8

9. Major global players like Audi, BMW, Hyundai
etc. have setup their manufacturing units in
India
Government initiatives regarding tax rebates
has led to global players setting up their R&D
centre in India
9

10. Marketer’s
Heaven
120 to 159
billion USD
Investment
13% expected
growth for
future decade
10

11. Indians are patriotic, they prefer Indian cars
Its difficult to enter in global mature market
Extensive R&D required
Aggressive Promotional Campaign
Joint Ventures, Long term contractual partners
Distribution Network
11

12. “Mery des ki car” like campaign to gain approval
Give a strong reason to chose you
Collaborations with oil co. & petrol distributors
Racing competitions, Automobile exhibitions
Celebrities & sportsmen advertising campaign
Develop alliances with mechanical garages & distributors
12