Indian Auto Industry

Overview of the Automobile Sector The liberalisation of the Indian industry saw significant growth in the Indian Automotive Industry. Today, the Indian Automotive Industry is a significant contributor to the Indian economy, contributing nearly 5% to the country’s GDP and about 17-18% to the kitty of indirect taxes to the Government, while investment outlay stood over Rs. 83,500 crore in 2008-09. With its wide penetration and strong influence on the country’s economic and industrial development, the auto sector is indeed one of the major drivers of our economy. Moreover, economic liberalization coupled with its technological, cost and manpower advantage have made India one of the prime business destination for many global automotive players. With its strong influence on the country’s economic and industrial development it is indeed one of the major drivers of our economy.

The sector has moderate direct employment and significant indirect employment; it is estimated that the sector provides direct and indirect employment to over 13 million people. Evolution of the Indian Automotive Industry The Pre-1980s era was defined by a closed market, availability of outdated models and limited supply of vehicles leading to limited growth of the market. The industry was in its nascent stages without any significant players in the market and neither were there a significant base of customers. Automobiles were largely unaffordable and objects of desire for most people. This changed in the next few years of 1983 to 1993 wherein Maruti Udyog Limited entered the Indian Automotive Sector. The era saw the formation of several joint ventures in the space of commercial vehicles and auto components. With the de-licensing of the automotive sector in 1993, several global players entered the market as a consequence of which the market grew, leading to stiffer competition and a large variety of products for the customers to choose from - currently, the Indian customer has over 30 Auto...