AutoInfoMe: Automobile Industry in India

1.3 Automobile Industry : India

The automobile industry, along with the auto components industry, is one of the core industries in India. A well-developed transportation system plays a key role in the development of an economy, and India is no exception to it.

Automobile is one of the largest industries in the global market. Owing to its strong forward and backward linkages with several key segments of the economy.

Automobile Sector occupies a prominent place in the fabric of Indian Economy. Automobile sector is leader in product and process technologies in the manufacturing sector.

The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. From the singsong rhythm of the bullock cart to the jet-age, India has also traveled a long way. An average Indian’s dream car may not be the design-savvy Honda or the stately limousine, but he sure can dream, and afford, the Maruti now.

It was in 1898 that the first motorcar rode down India’s roads. From then till the First World War, about 4,000 cars were directly imported to India from foreign manufacturers. The growing demand for these cars established the inherent requirements of the Indian market that these merchants were quick to pounce upon.

The Hindustan Motors (HM) was set up in 1942 and in 1944 Premier Automobile (PAL) was established to manufacture automobiles in India. However, it was PAL who produced the first car in India in 1946, as HM concentrated on auto components and could produce their first car only in 1949.

It was left to another company, Mahindra and Mahindra (M&M) to manufacture sturdier utility vehicles, namely the American Jeep. In the 50s, the Government of India granted approval to only 7 car dealers to operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco.

The protectionist policies continued to remain in place. The 60s witnessed the establishment of the two-three-wheeler industry in India and in the 70s, things remained much the same.

Since the 80s, the Indian car Industry has seen a major resurgence with the opening up of Indian shores to foreign manufacturers and collaborators.

The 90s have become the melting point for the car industry in India. The consumer is king. He is being constantly wooed by both the Indian and foreign manufacturers. Though sales had taken a dip in the first few months of 1999, it is back to boom time.

New models like Maruti’s Classic, Alto, Station Wagon, Ford’s Ikon, the new look Mitsubishi Lancer are all being launched with an eye on the emerging market. In these last years of the millennium, suffice it is to say that Indian cars will only grow from strength to strength.

The automobiles sector is divided into four segments - two-wheelers, passenger vehicles, commercial vehicles, three wheelers & two wheelers.

India is one of the world’s fastest growing passenger car markets it is second largest two wheeler manufacturer and fifth largest commercial vehicle manufacturer. It is also home for the largest motor cycle manufacturer.

Moreover, India is fourth largest passenger car market in Asia. Presently following is the segment-wise position of market share in Automobile Industry:

2017-18

Fig 1.2: Indian automobile cars market share

Segment wise scenario of major automobile manufacturers is as mentioned below:

Passenger Vehicles:

In the passenger vehicle segment market share of Maruti Udyog is 52%. Hyundai Motor’s share is 19%. Share of Tata motors is 16%. Other players in this segment are Honda Siel cars and Ford India Pvt. Ltd. Thus Maruti Udyog is still leader in passenger vehicle segment in automobile industry.

Utility Vehicles:

The leader in utility vehicles segment with market share of 42% is Mahindra and Mahindra. It is followed by Toyota Kirlosker and Tata Motors. Other utility vehicle manufacturers are Maruti Udyog, General Motors and Hyundai India.

Medium and heavy Commercial Vehicles:

In this segment Tata Motors is leader with 61%market share. It is followed by Ashok Leyland, Eicher Motos and Swaraj Mazda.

Light Commercial Vehicles:

With 46% share in the market, Tata Motors leads the passenger carriers segment. It is followed by Mahindra and Mahindra, Swaraj Mazda and Force Motors. In good carriers segment also with 58% shares Tata Motors is the leader. Other players in this segment are Mahindra and Mahindra, Swaraj Mazda and Force Motors.