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A Nations economy is well known from its transport system. For instant and
rapid growth in economy, a well-developed and well-networked
transportation system is essential. As India's transport network is developing
at a fast pace, Indian Automobile Industry is growing too. Also, the
Automobile industry has strong backward and forward linkages and hence
provides employment to a large section of the population. Thus the role of
Automobile Industry is very essential in Indian economy. Various types of
vehicles are manufactured by the Automobile Industry. Indian Automobile
Industry includes the manufacturing of trucks, buses, passenger cars,
defense vehicles, two-wheelers, etc. The industry can be broadly segmented
into into the Car manufacturing, two-wheeler manufacturing and heavy
vehicle manufacturing units. The major Car manufacturer are Hindustan
Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd ., General Motors
India Pvt. Ltd., Honda Siel Cars India Ltd. Hyundai Motors India Ltd., Skoda
India Private Ltd., Toyota Kirloskar Motor Ltd.

The two-wheeler manufacturing is dominated by companies like TVS, Honda

Motorcycle & Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The
heavy motors like buses, trucks, defense vehicles, auto rickshaws and other
multi-utility vehicles are manufactured by Tata-Telco, Ashok Leyland, Eicher
Motors, Bajaj, Mahindra and Mahindra, etc.

The Indian Automobile Market growth is expected to grow at a CAGR of 9.5

percent amounting to Rs. 13,008 million by 2010 which is a big in number.
The Commercial Vehicle Segment has been contributing to the automobile
market to a great extent. So as in passenger luxury cars now/

Many foreign companies like

Mercedes,Suzuki,chevorlet,Honda,mitsubushi,Toyota,Hyundai etc. have been
investing in the Indian Automobile Market in various ways such as
technology transfers, joint ventures, strategic alliances, exports, and
financial maruti joined hands with Suzuki in passenger
cars,same as Mahindra with Renault,hero joint ventures Honda in two
wheeler segment,ashkoa with Leyland in commercial vehicle segment.The
auto market in India can boast of attractive finance schemes, increasing
purchasing power, and launch of the latest in the
automobile industry by the foreign companies in india help in strengthening
the india`s economy.

India`s giant automotive manufacturer company TATA MOTORS has largest

share in commercial vehicle.and now they have acquired the jaquar and
range rover globally,capturing international market too,also they are
exporting their key products in the international market.

Total sales of major car manufacturers in India registered a figure of 0.674

million units at the end of March, 2007. The number of car exports in India
was 39,295 units. General Motors, Maruti, and Honda accounted for 60
percent of the market sales at the end of April, 2007. As the increase in per
capita income is observed in india,There has been an increase in the
purchase of motorcycles and cars both in the rural as well as urban
areas.{figures from reliable sources}

Some vital statistics regarding the automobile market in India has been
mentioned below:

• Two wheelers - 2nd largest in the world

• Commercial Vehicle - 4th largest in the world
• Passenger car- 11th largest in the world

The Indian automobile market consists of a wide variety of vehicles such as

light, medium, and heavy commercial vehicles, cars, scooters, mopeds,
motor cycles, 3 wheelers, and multi-utility vehicles such as jeeps and small

The modern automobile market in India has been considering key issues in
the process of growth:

• Customer care, and not just 'service'

• Domestic as well as multinational investments
• Searing through cut-throat competition
• Road safety
• Anti-pollution norms
• Coordination with the government to enable advancement
• Used vehicle trade

The future of Indian Automobile market is bright as it looks forward to

manufacturing and implementing new innovations such as electric cars as
provided by Reva,CNG technology is used in new upcoming models of maruti
and Honda has launched their new hybrid car in the Indian market. alternate
fuels like CNG and LPG, and probably customized Internet automobile orders.

Segmentation of automobile industry

Among the two-wheeler segment, motorcycles have major share in the

market. Hero Honda contributes 50% motorcycles to the market. In it Honda
holds 46% share in scooter and TVS makes 82% of the mopeds in the

40% of the three-wheelers are used as goods transport purpose. Piaggio

holds 40% of the market share. Among the passenger transport, Bajaj is the
leader by making 68% of the three-wheelers.

Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52%
share in passenger cars and is a complete monopoly in multipurpose
vehicles. In utility vehicles Mahindra holds 42% share.

In commercial vehicle, Tata Motors dominates the market with more than
60% share. Tata Motors is also the world's fifth largest medium & heavy
commercial vehicle manufacturer.
{figures from reliable sources}


The online vehicle market in India has been providing excellent services to
online vehicle sellers as well online vehicle buyers. The advantage of online
vehicle buying is that one can get an exhaustive list of cars and bikes and
even make a purchase without having to leave the comforts of one's house.
Many websites like, are their to promote online
business of auto industry.

Sellers can make their vehicles available instantly through the Internet to
millions of buyers at the domestic level. Online vehicle selling sites advertise
in daily newspapers and magazines ensuring buyer as well as seller attention
benifitting both.

Online Vehicle Market in India provides valuable information on vehicle

overviews, dealers, financing institutions, insurance companies, and also
product comparisons. All information is with regard to the region of the
online vehicle purchaser.many customer services are offered online.The
online Indian automobile market is part of the growing automobile industry in

The Online Vehicles market in India provides full security to its buyers and
sellers. Some of the security measures have been mentioned below:

• Good online companies do not keep a record of the transactions made

nor are they involved in the transacting process.
• No trustee or financial department services offered by the websites.
• Discouraging the practice of advance payment. Thus, avoiding the
possibility of fraud.
• Reliable websites like, make sure that
that their customers are not victims of manipulated electronic paper

All these services are offered free for the customers and hence they facilitate
the growth of the online vehicles market in India. Some of the companies
that offer their services in this area are,,,,,,, and

Online Vehicle Market in India has thus made vehicle purchase potentially
easier for the modern Indian automobile enthusiast and comes equipped
with unparalleled market research and valuable utility tools that make
vehicle-buying a lot less complicated a procedure than it used to be.


ARAI provides technical expertise in R&D, testing, certification, homologation

and framing of vehicle regulations. ARAI is a co-operative industrial research
association established by the automotive industry with the Ministry of
Industries, Government of India. It works in harmony and complete
confidence with its members, customers and the Government of India to
offer the finest services, which earned for itself ISO 9001, ISO 14001, OHSAS
18001 and NABL accreditations. ARAI is well-equipped with state-of-the-art
infra-structural facilities and highly qualified manpower.

The Indian Auto Industry is harmonizing both Safety & Emission regulations
with International Standards for sustained growth of the Industry for
combating the environment and become a global export hub.

India has a well established and Regulatory Framework under the Ministry of
Shipping, Road Transport and Highways in which SIAM(SOCIETY OF INDIAN
AUTOMOBILE MANUFACTURERS plays a very important role. All the stake
holders are part of the regulation formulation setup. The ministry issues the
notifications under the Central Motor Vehicle Rules and Motor Vehicles Act.

The Safety Regulations are being aligned with the ECE regulation and the
MANUFACTURERS envisages alignment by 2010.

The In use Vehicle Emission norms have been tightened with effect from 1st
October 2004 and computerization model has been developed by
place in the Major Metro Cities and would be extended throughout the
country in a phased manner.

 India’s huge geographic spread- Mass transport system.

There is a very large transportation system in India for the public which helps
the economy to the large scale.

 Increasing road development

The new development of road system is contributing a lot towards the
transportation system of the country. Better and wide roads and the material
used to build the roads is very long lasting and environment friendly. With
the better material used the life of the roads is increased which is helping the
economy of the country as less expenses will occur.

 Higher GDP growth

With the better transportation system the material is moved to different
places in short time and easily which helps in increase of the GDP as more
products can be made in same time.

 Increasing Per Capita income

The per capita income of India is increasing due to which the buying power of
the consumers has also increased making people buy cars and bikes.

 Cheaper (decline interest rates) and easier finance scheme

The banking system in India is in a good shape. It provides people with easier
and cheaper finance schemes which help the consumers to buy vehicles
easily. This helps in the increase in sales of the automobile industry which
also helps in the th increase of country’s economy.

India is harmonizing its Emission Norms for Four Wheelers with the
European Regulation and has adopted Euro III, equivalent norms in 11
Metropolitan Cities from Apr 1 2005. For Two Wheelers, which constitutes
70% of the vehicle population unique Indian emission norms, which are
one of the tightest in the world have been adopted.

The Fuel Quality plays a very important role in meeting the stringent
emission regulation. The fuel specifications of Gasoline and Diesel have
been aligned with the Corresponding European Fuel Specifications for
meeting the Euro II, Euro III and Euro IV emission norms.

The use of alternative fuels has been promoted in India both for energy
security and emission reduction Delhi and Mumbai have more than
100,000 commercial vehicles running on CNG fuel. Delhi has the largest
number of CNG commercial vehicles running anywhere in the World. India
is planning to introduce Biodiesel; Ethanol Gasoline blends in a phased
manner and has drawn up a road map for the same.

The Indian auto Industry is working with the authorities to facilitate for
introduction of the alternative fuels. India has also setup a task force for
preparing the Hydrogen road map. The use of LPG has also been
introduced as an auto fuel and the oil industry has drawn up plans for
setting up of Auto LPG dispensing station in major cities.

The latest technology is being adopted by the companies and is being

launched in India as well. One of the latest technologies is the Hybrid
Engines which are launched by Honda motors in India.

A lot of new safety measures are now taken into consideration before the
car or any other motor vehicle is launched to ensure its safety and

The Automotive Research Association of India ( ARAI ) has been playing a

crucial role in assuring safe, less polluting and more efficient vehicles.
Reducing pollution helps creating a better and healthy environment for the

85% of the cars in India are financed. The banks are giving finance options
easily helping the people who cannot afford to buy themselves. Low interest
rates translating to low financing and acquisition costs hence greater

The new technology of Hybrid engines launched in India (Honda CIVIC) is

very much safe and helps the environment making it better for the social
community. This technology is coming worldwide and is also available in
Canada now.

New measures are being taken to make the automobiles less polluting. This
well help in reducing the exploitation of atmosphere. Better atmosphere
gives better life.



The automotive sector is one of India’s largest and fastest growing manufacturing
sectors. It is ranked the 11th largest passenger car producer in the world. In the
category of motorcycles and scooters, India is ranked 1st and 2nd respectively. With
India increasingly liberalizing its market place, many new joint ventures evolved,
resulting in close to 24 global auto manufacturers setting up their shop in India.

Competition in India

As a result, competition in India’s automobile had been heating up in the recent years.
Many global players in the automobile have already set up presence in India. Most of
them are through tie-ups with dominant local players, while some are done entirely on
their own.

In the absence of strong competition in the past, the local car manufacturer Maruti
Udyog Ltd (MUL) has virtually dominated the Indian automotive market in the passenger
segments since the 1980s. As the automotive manufacturing sector rapidly evolved
through the dynamics of open market and deregulation, many new joint ventures (both
technical and financial) were formed between local players with leading global
manufacturers. In 1982, MUL, then a wholly government-owned company, signed up a
collaboration agreement with Suzuki of Japan to establish the volume production of
contemporary models. Subsequently, the licensing regime was scrapped in 1993 paving
way for 17 new ventures, of which 16 are now manufacturing cars

since then; there has also been an emergence of new competition for higher value
segments of the passenger car market. Hence, local players like MUL also began to
face competition from new foreign car makers. Ford entered the mid-range market with
the Ikon model in April 1998, a move which was followed by Honda, Mitsubishi,
Hyundai, and Daewoo. Other players, Hyundai and Daewoo, have since improved their
share of the passenger car market with new models

For the 4-wheelers segment, MUL/Suzuki dominates the automotive landscape holding
a 33% share of the passenger car market in 2004/05. In the second place is Tata
Motors, a local company, commanding 26% share, while Hyundai Motor ranked third
with 15% share and the rest split amongst close to 2 dozen other manufacturers.

For the 2-wheelers segment, it remains quite a local dominant game but global players
also have obvious presence in the market. Major players in this segment include Bajaj
Auto, TVS Suzuki, LML Limited, Hero-Honda Motors, Yamaha Motor India, Kinetic
Engineering, Maharashtra Scooters Majestic Auto, Kinetic-Honda Motors, Royal Enfield
(India), Scooters (India), Greaves Ltd. Foreign manufacturers also have presence in
India through their 100% owned subsidiaries, e.g. Honda Motorcycle, Scooter India Pvt.
Ltd. M/s Honda Motor Co., Japan, Yamaha Motor, Japan. The largest player is Hero
Honda Motors, accounting for 40% of market share, followed by Bajaj Auto and TVS
Motor, which account for 27% and 18% respectively.

Competition in the International Market

Besides on the competition observed amongst all global players in the domestic Indian
market, India as an automotive manufacturing country is also pitting against other
competitors in the international market. In terms of exports of automobile, India is
ranked 29th, while China, the other huge automotive factory ranked 17th. For exports of
auto parts, India was 26th, while China came in 11th. The top country for exports of
automobile and auto parts was Germany.