Automobile Industry in India Essay

1105 WordsNov 25, 20125 Pages
FRA PROJECT Deliverable 1: Industry: Automobile (4-wheeler) Industry Manufacturing industry has been contributing about 14-16% to GDP of India and Automobile industry is a major contributor to the Manufacturing sector. The industry has exhibited robust growth of 15-35% (in various segments of commercial and passenger vehicles) in the last 5 years and is a cyclical industry. It is also a monopolistic industry dominated by Maruti Suzuki, Tata motors, Hyundai and Mahindra and Mahindra in the passenger vehicles and Eicher, Ashok Leyland and Tata Motors in the commercial vehicles industry. Entry of foreign players has changed the dynamics of the industry. Contribution to GDP 2006 – 5.20% 2010 – 7.20% 2016 (Estimated) – 10.40% The Indian Automobile Industry produced 8.5 million vehicles in 2004-05 amounting to around USD 25 billion. During the financial year 2005-06, Indian Automobile Industry produced more than 9.7 million vehicles amounting to almost USD 28 billion. The growth in production was 15%. India is the second largest market for two wheelers in the world. However, in value terms, the value of the market for passenger cars and CVs is higher than the market size for two wheelers. Sales of passenger cars post 2000 have been driven by increase in the number of available models, purchasing power, especially of the middle class, easy availability of car finance, conducive government policies and growth of used car market. Further reduction in cost of ownership would fuel demand for passenger vehicles. Commercial vehicles sales have grown at a 4.4% CAGR over the last decade and the segment has also demonstrated cyclical trends. Last year, however, growth was over 10% in domestic sales and production. Exports have also picked up – registering a growth of 36% over the last year. Growth in the commercial vehicle sector is dependent on the general

More about Automobile Industry in India Essay

Open Document