The automotive sector is one of the core industries of the Indian economy. Indian Auto industry has come of age only since the complete de-licensing of 1991. Indian auto industry defied global economic recession and continued to register high sales both in domestic and export markets.
In 2007, India was ranked as the 12th fastest growing market in the world. Presently, India is the 2nd largest two wheeler market in the world and 4th largest commercial vehicle market worldwide. India is the 11th largest market in the passenger car segment globally which is expected to become the 7th largest market by 2016.
India holds a total of 3% share in global four wheeler production and ranks 9th in the world in the production of cars. There is a huge potential which needs to be tapped through an integrated effort of the government, OEM’s and also the auto component manufacturers. India is a base for the manufacturing of small cars and has attracted the attention of global giants for investing in this segment.
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The graph below shows that Indian Auto industry has a potential to sell 31.96 million vehicles by 2015-2016.
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It is expected that Indian automobile industry will be among the world’s top five automotive economies by 2025, due to the huge future potential for growth.
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Ernst and Young has predicted the Indian passenger car market to grow at 12 percent annually over the next five years to touch 3.75 million units by 2014 from 1.89 million units at present. Analysts with Ernest and Young say that “The industry’s turnover is estimated to touch $155 billion by 2016, this would make the Indian auto industry the seventh largest in the world, and the third largest by 2030, behind China and the US. “
The government’s Automotive Mission Plan also envisages India emerging as the world’s seventh largest carmaker by 2016, contributing over 10 percent to the country’s $1.2-trillion economy from under five percent at present.
Where India’s auto industry scores over the others
India’s Nano (the world’s cheapest car) and other small cars are forcing the world to go back to their drawing boards. India’s obsession with hatchbacks has led to designs that score high on fuel and cost efficiencies without compromising on the quality. According to Neeraj Garg, Volkswagen India group sales director: “Car manufacturers are betting on hatchbacks in the B+ segment. We expect the segment to constitute nearly 75 percent of volumes in the coming years.” India’s Reva (electric car) is very popular abroad as its environment friendly. Spark, the compact car from General Motors, will now come in an electric version, thanks to a tie-up with Bangalore’s Reva Electric Car Co. With such innovations abound, Indian auto industry is all set to grow strong and become a visible and stronger power in the Global auto industry.
Read articles on The Automobile Industry in India:
- The Emergence of the Automobile Industry in India
- Prime Factors Leading to the Growth and Demand of the Auto Industry in India
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