Indian auto industry is one of the core industries. Post-independence due to the thrust on industrialization Indian auto industry indirectly benefited as transport of goods across the country increased manifold.
Liberalization of the economy that started in 1980 has also had a positive impact on the Indian Auto industry. India is considered as a crucial business destination for reputed automotive players across the globe. The automotive sector in India is growing at around 18 per cent per annum.
How did the joint-ventures in the Auto Industry in India start
The collaborative phase with the foreign players started in early 1980s through a joint venture between Maruti (a government of India Undertaking) and Suzuki Motor Corporation, a Japanese corporation to manufacture four wheelers. But, during that period even the industry was subject to control and excess of regulations.
With de-licensing in 1991, the industry witnessed a remarkable growth in the Indian automotive sector. This is because the economy was opened up and was allowed automatic approval up to 51% for foreign ownership in 1997, after the de-licensing of car segment in 1993.
The automobile policy of 2002, permitted complete foreign equity investment in manufacturing of automobiles and components. This led to an entry of international players like Hyundai, Mercedes Benz, Toyota, Ford, General Motors, Mitsubishi, Daewoo and Daimler Chrysler for manufacturing and sourcing components. This took the Indian automobile production from 5.3 Million Units in 2001-02 to 10.8 Million Units in 2007-08.
The joint ventures in the Indian Auto-Industry today
At present, the joint ventures in the Indian auto industry are creating records and notching up impressive sales. The table below gives details of the joint ventures in the four wheeler market:
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Some other JVs in this segment are that of Renault-Nissan Automotive India. This is a 50:50 JV between Nissan Motor Company of Japan and Renault from France. Fiat Motors has an alliance with Tata Motors for jointly manufacturing cars at its plant in Ranjangaon, Pune. It is estimated that, both will be making around 2,00,000 cars annually and they also have a distribution and a service partnership.
The pie chart below illustrates the market share for 2007-2008 in percentages.
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The international manufacturers are expanding base and investing more money due to huge cost efficiencies. India has emerged as one of the world’s largest manufacturers of small cars. With the world looking at using small cars for cost and fuel efficiencies, Indian exports of cars will rise significantly after the new and expanded manufacturing facilities of players such as Nissan, Hyundai, Toyota and Suzuki become operational.
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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Read more on the Automobile Industry in India
