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The Tata Nano - the cheapest car made in India The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010.[1] According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12.[2] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[3]. In 2010, India reached as Asia's third largest exporter of passenger cars, behind Japan and South Korea beating Thailand.
As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world.[4][5] According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020.[6] By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.[7] The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster near Chennai is the biggest with 35% of the revenue share. The western hub near Maharashtra is 33% of the market. The northern cluster is primarily Haryana with 32%.[8] Chennai, is also referred to as the "Detroit of India"[9] with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60% of the country's automotive exports.[10] Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based.[11] The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors[12][13] having assembly plants in the area. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat.[14] Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.[15][16][17]
Contents
[hide]
1 Overview 2 History 3 Industry Definition 4 Supply Chain of Automobile Industry 5 Key statistics o 5.1 Automobile Production o 5.2 Automobile Sales o 5.3 Automobile Exports o 5.4 Product and service segmentation o 5.5 Vehicle Registration o 5.6 Total Number of Vehicle Registrations in India from 2001 to 2008 6 Emission norms 7 Geographic Segmentation o 7.1 Geographical Segmentation:State-wise motor vehicles registration in India from 2001 - 2008 o 7.2 Geographical Segmentation: Category-wise number of registrations in States of India o 7.3 Geographical Segmentation: Category-wise registration in Union Territories
of India 8 Exports o 8.1 Top 20 Export destinations in 2007-2008 and growth from previous year 9 Passenger vehicles in India o 9.1 Indian automotive companies o 9.2 Foreign automotive companies in India 9.2.1 Vehicles manufactured or assembled in India 9.2.2 Vehicles brought into India as CBUs 10 Commercial vehicle manufacturers in India o 10.1 Indian brands o 10.2 Joint Venture Brands o 10.3 Foreign brands 11 Electric car manufacturers in India 12 Electric vehicle and Hybrid vehicle (xEV) industry 13 Market characteristics o 13.1 Market size o 13.2 Demand determinants 14 International Markets 15 International Markets Analysis 16 Basis of Competition 17 Life Cycle 18 Industry Conditions 19 Taxation o 19.1 Excise Duty o 19.2 MODVAT and CENVAT o 19.3 Customs Duty o 19.4 Service Tax 20 Industry Assistance 21 Capital and Labour Intensity 22 Industry Volatility 23 Key Competitors o 23.1 Tata Motors o 23.2 Maruti Suzuki India o 23.3 Hyundai Motor India o 23.4 Mahindra & Mahindra o 23.5 Ashok Leyland 24 Key Factors 25 See also 26 Further reading 27 Footnotes
[edit] Overview
The Indian Automobile Industry manufactures over 11 million vehicles and exports about 1.5 million each year.[18] The dominant products of the industry are two-wheelers with a market
share of over 75% and passenger cars with a market share of about 16%.[18] Commercial vehicles and three-wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes.[18] The industry has a turnover of more than USD $35 billion and provides direct and indirect employment to over 13 million people.[18]??? The supply chain is similar to the supply chain of the automotive industry in Europe and America. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition in the sector is high and increasing, and its life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged. With a high cost of developing production facilities, limited accessibility to new technology, and increasing competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%.[18] The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, India's increasing per capita disposable income which is expected to rise by 106% by 2015[18] and growth in exports is playing a major role in the rise and competitiveness of the industry. Tata Motors is leading the commercial vehicle segment with a market share of about 64%.[18] Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%.[18] Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26%[18] of the two-wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the threewheeler market. Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of car they buy.
The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India. Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favourable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.
[edit] History
The first car ran on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers. Embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles under license from Willys.[19] The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.[20] Following the independence, in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies.[21] In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the license raj, a number of Indian and multi-national car companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands.[21] Following economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant
India-specific investment by multinational automobile manufacturers.[22] In February 2009, monthly sales of passenger cars in India exceeded 100,000 units[23] and has since grown rapidly to a record monthly high of 182,992 units in October 2009.[24] From 2003 to 2010, car sales in India have progressed at a CAGR of 13.7%, and with only 10% of Indian households owning a car in 2009 (whereas this figure reaches 80% in Switzerland for example)[25] this progression is unlikely to stop in the coming decade.[26] Congestion of Indian roads, more than market demand, will likely be the limiting factor.[27] SIAM is the apex industry body representing all the vehicle manufacturers, home-grown and international, in India.[28]
also provide engineering resources for detailed designs. Some of their services may include welding, fabrication, shearing, bending etc. First Tier Suppliers: These companies provide major systems directly to assemblers. These companies have global coverage to follow their customers to various locations around the world. They design and innovate to provide "black-box" solutions for the requirements of their customers. Black-box solutions are solutions created by suppliers using their own technology to meet the performance and interface requirements set by assemblers. First tier suppliers are responsible not only for the assembly of parts into complete units like dashboard, breaks-axle-suspension, seats, or cockpit but also for the management of second-tier suppliers. Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs): After researching consumers' wants and needs, automakers begin designing models which are tailored to consumers' demands. The design process normally takes five years. These companies have manufacturing units where engines are manufactured and parts supplied by first tier suppliers and second tier suppliers are assembled. Automakers are the key to the supply chain of the automotive industry. Examples of these companies are Tata Motors, Maruti Suzuki, Toyota, and Honda. Innovation, design capability and branding are the main focus of these companies. Dealers: Once the vehicles are ready they are shipped to the regional branch and from there, to the authorised dealers of the companies. The dealers then sell the vehicles to the end customers. Parts and Accessory: These companies provide products like tires, windshields, and air bags etc. to automakers and dealers or directly to customers. Service Providers: Some of the services to the customers include servicing of vehicles, repairing parts, or financing of vehicles. Many dealers provide these services but, customers can also choose to go to independent service providers.
Year 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 [18] Motor Vehicle Production 8,467,853 9,743,503 11,087,997 10,853,930 11,175,479 [18] Industry Revenue USD Million 24,379 26,969 30,507 32,383 33,342* [18] Exports (Units) 629,544 806,222 1,011,529 1,238,333 1,530,660 [18] Exports (Revenue) 1,915 2,231 2,552 3,008 3,718*
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 629,544 806,222 1,011,529 1,238,333 1,530,660
Segment[18] Mopeds (%) Electric Two Wheelers (%) Total Two Wheelers[18] (%) Grand Total[18] (%)
where Bharat Stage IV has been imposed while the rest of the nation is still under Bharat Stage III.
[edit] Geographical Segmentation:State-wise motor vehicles registration in India from 2001 - 2008
2001 (in '000) Andhra Pradesh 1111 Arunachal Pradesh 21 Assam 542 Bihar 949 Chhattisgarh 857 Goa 341 Gujarat 5,576 Haryana 1,949 Himachal Pradesh 217 Jammu & Kashmir 330 Jharkhand 909 Karnataka 3,537 Kerala 2,112 Madhya Pradesh 3,095 Maharashtra 6,760 Manipur 77 Meghalaya 62 Mizoram 31 Nagaland 160 Orissa 1,096 Punjab 2,910 States\Year 2002 (in '000) 4,389 21 596 1,024 948 366 6,008 2,122 244 364 984 3,636 2,315 3,173 7,414 90 67 34 177 1,215 3,103 2003 (in '000) 5,002 21 657 1,121 1,076 397 6,508 2,279 269 399 1,101 3,738 2,552 3,459 8,134 97 73 37 162 1,359 3,308 2004 (in '000) 5,720 21 727 751 1,216 436 7,087 2,548 289 439 1,217 3,977 2,792 3,804 8,969 106 73 42 172 1,525 3,529 2005 (in '000) 6,446 21 798 726 1,367 483 7,892 2,883 329 493 1,341 4,338 3,180 4,119 10,055 114 78 48 186 1,717 3,859 2006 (in '000) 7,232 21 883 694 1,536 537 8,785 3,267 375 556 1,479 4,717 3,612 4,442 11,281 123 84 54 201 1,936 4,225 2007 (in '000) 8,042 21 973 647 1,726 585 9,633 3,689 421 628 1,630 5,036 4,034 4,710 12,477 134 89 61 215 2,159 4,571 2008 (in '000) 8,989 21 1,086 593 1,939 638 10,543 4,164 480 719 1,796 5,360 4,564 4,968 13,817 145 95 70 230 2,417 4,992
States\Year Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand Uttar Pradesh West Bengal Andaman & Nicobar Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Delhi Lakshadweep Pondicherry
2001 (in '000) 2,943 12 5,162 50 364 4,921 1,690 25 386 13 37 3,635 4 252
2002 (in '000) 3,197 13 5,658 57 406 5,171 1,690 28 386 13 41 3,699 5 270
2003 (in '000) 3,487 15 8,005 66 457 5,928 2,366 28 562 31 44 3,971 5 293
2004 (in '000) 3,834 17 8,575 76 516 6,460 2,548 28 586 35 48 4,237 5 313
2005 (in '000) 4,285 19 10,085 85 580 7,271 2,816 31 629 43 55 4,544 6 359
2006 (in '000) 4,791 21 11,901 95 651 8,144 3,138 34 677 54 63 4,868 7 418
2007 (in '000) 5,281 23 13,860 105 732 8,970 3,464 38 732 67 71 5,166 7 495
2008 (in '000) 5,815 25 16,207 117 822 9,919 3,833 42 799 86 79 5,469 8 552
Jh ar kh an d
K ar na ta ka
K er al a
M ah ar as htr a
M a ni p u r
M eg ha la ya
N M ag iz al or a a n m d
P O u ri nj ss a a b
T S a R i m aj k il as k N th i a an m d u
T ri p u r a
U Utt tt ar ar ak P ha ra nd de sh
W es t B e n g al
8 14 2, 3, 3, 32 1 14 3 8 7 9
3 2 18 14 0, 40, 8, 41 2, 7, 5 41 3 ,6 30 66 1 3 2 44 4 7 6 6
2 10 9, 62 73 77 24 0, 9 ,5 ,3 ,1 3,1 59 5 66 15 78 13 6 8
5, 17 14 3, 41 50 75 9 3, ,0 21 ,0 ,4 ,9 6 55 28 5 19 96 21 3 2
2 1, 27 6, 4 94 6 6, 3 9,7 1, ,4 1 23 2 99 0 82 9 5 1 3 5
A ru na A ch ss al a Pr m ad es h
H i m B Ch H G ac i hat G ar uj h h tis o ya ar al a ga a n at P r rh a ra de sh
J a m m u & K as h m ir
Jh ar kh an d
K ar na ta ka
K er al a
M a d h ya P ra de sh
M ah ar as htr a
M a ni p u r
M eg ha la ya
N M ag iz al or a a n m d
P O u ri nj ss a a b
T S a R i m aj k il as k N th i a an m d u
T ri p u r a
U Utt tt ar ar ak P ha ra nd de sh
W es t B e n g al
Lorri es Light Moto 1 3 r 66 4, 2, 55 Vehi ,8 3 2 5 cles 91 1 9 (goo 7 6 ds) 1 1 15 0, 0, Buse 66 ,4 2 9 s 5 98 8 6 6 1 1 1 81 0, 4, 29 Taxis ,6 3 0 9 27 6 0 8 0 Light Moto 2 r 26 9, 1, 9, Vehi 3, 5 43 8 cles 32 0 0 0 (pass 5 7 6 enger ) 1 9 Total 57 4 5, 7, Com 0, 7, 27 2 merci 48 9 2 8 al 8 6 0 6 Two 4, 10 4 4
1 20 16, 58 2, 2, 4, 68 ,3 34 2 33 6 25 0 7 6 2
13 1, 91 30 25 6, 2 ,7 ,0 6,0 18 0 55 30 82 1 6
20 1, 9, 35 34 13 3 5 57 4, 5,6 25 24 ,5 ,6 ,6 5 9 ,6 31 62 5 3 43 45 01 3 5 81 4
2 4, 45 9, 4, 0, 9, 29 2,0 8 ,6 36 87 1 53 ,7 43 6 69 9 2 3 9 10 8 9 1 8, 22, 40 14 14 0, 21 40 2 00 ,1 ,9 ,9 3 ,8 ,8 7 5 00 90 70 2 14 39 3 5
9, 7,4 3 74 7 5
1 27 19 29 37 2, 4, 36 45 49 6, 0, 4, ,8 78 2 ,2 ,1 3,1 90 36 24 41 3 5 57 46 42 8 2 4 5
5 88, 0, 62 8 1 4 2
8 74 26 13 45 68 23 1,1 66 6, 9, 8, 0, 3, 5, 8, 43, ,6 9 31 19 17 26 19 40 90 09 4 7 2 6 2 1 4 4 9
1 14 17 34 2, 24 10 66 6, 7, 0, 4 ,8 ,3 ,5 51 96 53 5 19 19 06 2 5 7 6
2 7, 82 28 38 0, 40, 3 8, 6, 8, 9 27 2 02 86 62 3 1 5 1 0 7 1
99 3 5, 1, 15 2 93 2, 1, 2, 6,2 7 21 19 36 1, 2, 2, 4, 6, 4 39 4, 1,
A ru na A ch ss al a Pr m ad es h
Whe 54 ,6 elers 3, 05 28 3
39 2, 7, Cars 34 73 0 8
K er al a
M a d h ya P ra de sh
M ah ar as htr a
M a ni p u r
M eg ha la ya
N M ag iz al or a a n m d
P O u ri nj ss a a b
T S a R i m aj k il as k N th i a an m d u
T ri p u r a
U Utt tt ar ar ak P ha ra nd de sh
W es t B e n g al
59 87 16, 5, 6, 79 80 19 4 8 1
5, ,0 ,5 ,7 22 58 69 6 73 4, 1,2 92 58 3 50 01 41 3, 7, 2, 8 4, 2 51 2, 1, 3 57 18 17 2 20 4 04 32 3 3 1 5 7 6 5 1
37 14 92 8, 8, 4,0 91 03 06 2 0
8, 26 20 14 4, 33 62 0 7, 3, ,5 85 ,2 ,5 3 37 99 95 0 73 53 0 9 1
1, 73 8, 39 49 42, 8 1, 6 1, 4, 22 7 38 7 44 50 0 0 0 2 3 5 2, 53 97 8 6,4 ,9 ,8 6 52 87 21 3 4 19 14 78 8 ,9 ,7 7 7 57 36
1, 45 40 71 1, 30 90 1 31, 48 2 44 20 9, 7, 8, 82 ,5 9 ,8 4 98 ,3 6 1 9 01 52 08 7 92 86 7 1 41 3 4 3 2 2, 24 57 3 25 69 41 ,1 ,0 0 4 6 0 81 13 4 3 9, 1, 8 10, 9 01 9 02 1 5 8 1 0
19 11 16, 2 11 8, 4, 4, 19 35 76 5 77 24 2,1 ,1 ,3 11 2 ,0 80 35 51 - ,8 4 ,1 ,1 2 7 22 02 08 1 1 18 6 4 1 88 64 95 1
A ru na A ch ss al a Pr m ad es h
J a m m u & K as h m ir 6 3 5 1, 6 4 7
Jh ar kh an d
K ar na ta ka
K er al a
M a d h ya P ra de sh
M ah ar as htr a
M a ni p u r
M eg ha la ya
N M ag iz al or a a n m d
P O u ri nj ss a a b
T S a R i m aj k il as k N th i a an m d u
T ri p u r a
U Utt tt ar ar ak P ha ra nd de sh
W es t B e n g al
1, 08 6, 78 2
3, 52 3, 32 2
2, 3, 7,8 10 56 24, 6, 5, 82 88 12 9 3 4
9 1, 3, 3, 10 3, 48 31 37 35 49 5, 8 ,5 ,8 8, 1, 3, 41 6 63 26 47 13 26 1 9 0 5 9
7, 5 6, 2, 9, 74 4, 47 17 15 9 7, 6 5,7 3, 9, 1 22 1 11 33 33 1 0 6 8 6
Type of Vehicle Multiaxled/Articulate d Vehicles/Trucks & Lorries Light Motor Vehicles (goods) Buses Taxis Light Motor Vehicles (passenger) Total Commercial Two Wheelers Cars Jeeps Omni Buses
270 408
6,588 2,923 1,831 1,421 4,283 17,046 235,438 47,642 3,838 2,545
7,439 5,019 233,212 678 17,88 2,665,75 30,351 3,978 1 0 1,192,38 9,270 12,278 78 9 429 295 122,283 85 6 38 8,386 5
Dama n& Delhi Diu 165 124 30 4,851 99 9,705 4,003,46 43,281 3
[edit] Exports
Mahindra Scorpio Jeep in service with the Italy's CNSAS. India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa.[30] India's automobile exports are expected to cross $12 billion by 2014.[31] According to New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki.[32] In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011.[33] Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011.[34] In September 2009, Ford Motors announced its plans to set up a plant in India with an annual capacity of 250,000 cars for US$500 million. The cars will be manufactured both for the Indian market and for export.[35] The company said that the plant was a part of its plan to make India the hub for its global production business.[36] Fiat Motors also announced that it would source more than US$1 billion worth auto components from India.[37] In July 2010, The Economic Times reported that PSA Peugeot Citron was planning to re-enter the Indian market and open a production plant in Andhra Pradesh with an annual capacity of
100,000 vehicles, investing EUR 700M in the operation.[38] PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010.
A Tata Safari on display in Poznan, Poland. In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after Japan (1.77m), Korea (1.12m) and Thailand (0.26m) by allowing foreign carmakers 100% ownership of factories in India, which China does not allow.[3] In recent years, India has emerged as a leading center for the manufacture of small cars. Hyundai, the biggest exporter from the country, now ships more than 250,000 cars annually from India. Apart from shipments to its parent Suzuki, Maruti Suzuki also manufactures small cars for Nissan, which sells them in Europe. Nissan will also export small cars from its new Indian assembly line. Tata Motors exports its passenger vehicles to Asian and African markets, and is in preparation to launch electric vehicles in Europe in 2010. The firm is also planning to launch an electric version of its low-cost car Nano in Europe and the U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and small SUV models in the U.S. market. Bajaj Auto is designing a low-cost car for the Renault Nissan Automotive India, which will market the product worldwide. Renault Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in another small car project.[39] While the possibilities are impressive, there are challenges that could thwart future growth of the Indian automobile industry. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes, industry growth will slow if the economy weakens.[39]
[edit] Top 20 Export destinations in 2007-2008 and growth from previous year
Rank 1 2 3 4 Country United States of America Italy Sri Lanka South Africa 2007-2008 (in USD Millions) 593.64 332.35 249.14 224.93 2008-2009 (in USD Millions) 525.24 359.68 216.11 188.57 Percentage Growth -11.52 8.22 -13.26 -15.79
Rank 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Country United Kingdom United Arab Emirates Algeria Bangladesh Egypt Germany Colombia Nepal Mexico Turkey Spain France Nigeria Greece Netherland Ghana
2007-2008 (in USD Millions) 165.57 164.44 147.34 137.26 134.43 133.52 118.88 111.33 93.80 83.53 81.01 76.77 66.01 65.75 65.19 59.91
2008-2009 (in USD Millions) 246.32 192.74 265.63 164.86 143.54 409.63 120.71 98.13 94.10 73.82 56.96 134.21 148.74 127.63 163.66 38.30
Percentage Growth 48.77 17.21 80.28 20.11 5.99 206.8 1.54 -11.86 0.32 -11.63 -29.69 74.83 125.03 94.1 151.05 -36.07
Chinkara Motors:[66] Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster, Sailster Hindustan Motors:[67] Ambassador ICML:[68] Rhino Rx Mahindra:[69] Major, Xylo, Scorpio, Bolero, Thar, Verito, Genio, XUV500. Premier Automobiles Limited:[70] Sigma, RiO
San Motors:[71] Storm Tata Motors:[72] Nano, Indica, Vista, Indigo, Manza, Indigo CS, Sumo, Grande, Venture, Safari, Xenon, Aria
Manufactured only in Chennai, India, the i10 is one of Hyundai's best selling globally exported cars.
Maruti Swift. Maruti Suzuki, a subsidiary of Japan's Suzuki Motor, is the largest automobile manufacturer in India.[73]
BMW India:[74] 3 Series, 5 Series, X1, X3. Fiat India[75] (in collaboration with Tata Motors): Grande Punto, Linea. Ford India:[76] Figo, Fiesta Classic, Fiesta, Endeavour. General Motors India[77]
Honda Siel:[79] Brio, Jazz, City, Civic, Accord. Hyundai Motor India:[80] Eon, Santro, i10, i20, Accent, Verna, Sonata.
Land Rover:[81] Freelander 2 Maruti Suzuki:[82] 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy. Mercedes-Benz India:[83] C-Class, E-Class, M-Class, S-Class. Mitsubishi[84] (in collaboration with Hindustan Motors):[85] Lancer, Lancer Cedia, Pajero. Nissan Motor India:[86] Micra, Sunny, Evalia. Renault India:[87][88][89] Pulse, Duster, Fluence, Koleos. Toyota Kirloskar:[90] Etios Liva Etios, Corolla Altis, Innova, Fortuner. Volkswagen Group Sales India:
Audi India: A4, A6, Q5. koda Auto India:[91][92] Fabia, Rapid, Laura. Volkswagen India:[93][94] Polo, Vento, Jetta, Passat.
Opel was present in India until 2006. As of 2011, Opel only provides spare parts and vehicle servicing to existing Opel vehicle owners.
Aston Martin:[95] Vantage, Rapide, Virage, DB9, DBS, One-77. Audi:[96] A7, A8, S4, S6, S8, Q7, TT, R8, RS5. Bentley:[97][98] Arnage, Azure, Brooklands, Continental GT, Continental Flying Spur, Mulsanne. BMW:[99] 5 Series GT, 6 Series, 7 Series, X5, X6, X6 M, M3, M5, M6 and Z4. Bugatti:[100][101] Veyron. Chevrolet: Captiva. Ferrari[102][103]: California, 458 Italia, 599 GTB Fiorano, FF. Fiat[75]: 500, Bravo. General Motors[77]: Hummer H2, Hummer H3. Gumpert[104]: Apollo. Honda:[105][106] Civic Hybrid, CR-V. Hyundai[80]: Santa Fe. Jaguar:[107] XF, XJ, XK. Koenigsegg:[108][109] CCX, CCXR, Agera. Lamborghini:[110] Gallardo, Aventador. Land Rover:[111] Discovery 4, Range Rover Evoque, Range Rover Sport, Range Rover. Maserati:[112] Quattroporte, GranTurismo, GranCabrio. Maybach:[113] 57 and 62.
Mercedes-Benz:[114] CL-Class, GL-Class, R-Class, CLS-Class, SL-Class, SLK-Class, Viano, G-Class, SLS. MINI:[115] Cooper, Cooper S, Convertible, Countryman. Mitsubishi: Montero, Outlander, Evo X. Nissan:[116] Teana, X-Trail, 370Z, GT-R. Porsche:[117][118] 997, Boxster, Panamera, Cayman, Cayenne, Carrera GT. Rolls Royce:[119] Ghost, Phantom, Phantom Coup, Phantom Drophead Coup. koda[91]: Yeti, Superb. Suzuki: Grand Vitara, Kizashi. Toyota[90]: Prius, Camry, Land Cruiser, Land Cruiser Prado. Volkswagen:[120] Beetle, Tiguan, Touareg, Phaeton. Volvo:[121] S60, S80, XC60, XC90.
VE Commercial Vehicles Limited[127] - VE Commercial Vehicles limited - A JV between Volvo Groups & Eicher Motors Limited. Ashok Leyland[128] - originally a JV between Ashok Motors and Leyland Motors, now 51% owned by Hinduja Group Mahindra Navistar[129] - a 51:49 JV between Mahindra Group and Navistar International Swaraj Mazda[130] - originally a JV between Punjab Tractors and Mazda, now 53.5% owned by Sumitomo Group Kamaz Vectra[131] - A JV between Russia's KaMAZ and the Vectra Group
Volvo[132] Tatra[133] MAN[134] Mercedes-Benz[135] - manufactures luxury coaches in India. Daimler AG[136] - manufactures BharatBenz, a brand of trucks based on the Fuso and the Mercedes Benz truck platforms, which Daimler AG owns. Rosenbauer[137]
The level of trade export is medium The level of trade export is increasing International Markets Imports The level of trade import is low The level of trade import is increasing
ensuring availability of best quality product at lower cost to the consumers on the one hand and developing and assimilating the latest technology in the industry on the other hand. As per Automotive Mission Plan 20062016 (2008), the Indian Government recognises its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance. The Indian Government wants to create a policy environment to help companies gain competitive advantage. The government aims that with its policies its encourage growth, promote domestic competition and stimulate innovation.
[edit] Taxation
India has a well developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are:- Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are:- Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/nonagricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities.
the duty paid on such inputs. As the duty on the final product is on ad valorem basis and the final cost of product `A' includes the cost of inputs, inclusive of the duty paid, duty charged on product `A' meant doubly taxing raw materials. In other words, the tax burden goes on increasing as raw material and final product passes from one stage to other because, each subsequent purchaser has to pay tax again and again on the material which has already suffered tax. This is called cascading effect or double taxation. This very often distorted the production structure and did not allow the correct assessment of the tax incidence. Therefore, the Government tried to remove these defects of the Central Excise System by progressively relieving inputs from excise and countervailing duties. An ideal system to realize this objective would have been to adopt value added taxation (VAT). However, on account of some practical difficulties it was not possible to fully adopt the value added taxation. Hence, Government evolved a new scheme, `MODVAT' (Modified Value Added Tax). MODVAT Scheme which essentially follows VAT Scheme of taxation. i.e. if a manufacturer A purchases certain components(raw materials) from another manufacturer B for use in its product. B would have paid excise duty on components manufactured by it and would have recovered that excise duty in its sales price from A. Now, A has to pay excise duty on product manufactured by it as well as bear the excise duty paid by the supplier of raw material B. Under the MODVAT scheme, an Original Equipment Manufacturer can take credit of excise duty paid by First Tier and Second Tier suppliers. It amounts to excise duty only on additions in value by each manufacturer at each stage. MODVAT Scheme ensures the revenue of the same order and at same time the price of the final product could be lower. Apart from reducing the costs through elimination of cascade effect, and bringing in greater rationalization in tax structure and also bringing in certainty in the amount of tax leviable on the final product, this scheme will help the consumer to understand precisely the impact of taxation on the cost of any product. Subsequently, MODVAT scheme was restructured into CENVAT (Central Value Added Tax) scheme. A new set of rules 57AA to 57AK, under The CENVAT Credit Rules, 2004, were framed and whatever restrictions were there in MODVAT Scheme were put to an end and comparatively, a free hand was given to the assesses. Under the CENVAT Scheme, a manufacturer of final product or provider of taxable service must be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product. Inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer.
provides for levy and collection of duty on imports and exports, import/export procedures, prohibitions on importation and exportation of goods, penalties, offences, etc. Export duties are levied occasionally to mop up excess profitability in international prices of goods in respect of which domestic prices may be low at the given time. But the sweep of import duties is quite wide.
An Auto Design Centre to be established at National Institute of Design, Ahmadabad.National Automotive Testing and R&D Implementation Project (NATRIP) to act as Centre of Excellence for Technical Design Data. Integration of Information Technology in manufacturing to be promoted. R&D for product, process and technology to be incentivised. Road Map for Auto Fuel Policy beyond 2010 would be drawn. The profitability of motor vehicle manufacturers has been rising over the past five years, mainly due to rising demand and growth of Indian middle class. Major players of the industry, like Maruti Suzuki India and Tata Motors have been recording profits of 6% to 11% from the past five years. Whereas, earlier profit margins in the industry were only 1.5% to 3%. Cost of material has reduced from over 85% in the year 2001-2002 to under 80% in the year2008-2009.[18] Wages and salary as a percentage of revenue has been declining and with the increasing labour productivity this is expected to decline further in the coming years.
This technology results in superior fuel combustion, better fuel management, engine performance and reduced pollution. To get the maximum out from these types of engine one should use Premium petrol like XTRA Premium, Speed, and Power. Common Rail Direct Injection (CRDI) CRDI engine cars offer 25% more power than the normal direct injection engine with a superior pickup and torque, offering sometimes up to 70% more power than the conventional diesel engines. They are smooth, less strident, and immensely fuel efficient giving around 24 kilometres to a litre of Diesel. The fact that Diesel is cheaper than petrol in India further attributes greatness to the engine. In a CRDI engine, a tube or a common rail connects all the injectors and contains fuel at a constant pressure. The high pressure in the common rail ensures that when injected, the fuel breaks up into small particles and mixes evenly with the air, thereby leaving little un-burnt fuel thus reducing pollution. The common rail principle has been used to reduce the noise which used to be a downside with earlier Diesel engines; the technology has been pioneered by the Fiat group, only to be adopted by other automobile companies around the world. However, these engines are 25% more costly than the conventional engines. They also require higher degree of maintenance and spares are also expensive. The Indian automotive industry is in the mindset of a major structural transformation in today's globalised scenario. System Supplies of integrated components and sub-systems has become the order of the day, with individual small components being supplied to the system integrators instead of vehicle manufacturers. In this process most of the Small Scale Industrial units, manufacturing smaller individual components, have become tier 2 and tier 3 suppliers, while the large companies including most Multi National Companies are being transformed into tier 1 companies who purchase from tier 2 and tier 3, and sell to the auto manufacturers. (Source: Department of Heavy Industry) Investment in new technology such as supply-chain management and collaborative forecasting (where members of the supply chain share forecasting data to reduce bottlenecks) will help make industry more competitive.
This increase in the spending power has been a forefront of the economic development. According to the Economic Times of India, economic liberalization allowing unrestricted Foreign Direct Investment (FDI) and removing foreign currency neutralisation and export obligations has been also been one of the key to India's automotive volatility.
largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, a development which signifies a first for the global automobile industry. Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at USD 2,200 or Rs.100,000 (excluding VAT and transportation cost). The Tata Nano has been subsequently launched as planned, in India in March 2009.[18]
add 10 new markets with Australia being the latest entrant to the list. The first shipment to Australia is of 500 units of the i20 and the total i20 exports to Australia are expected to be in the region of 15,000 per annum.
The Company sold 6,812 vehicles in the overseas markets during 2008-09. This represents a decrease of approximately 6.5% over the previous year. Total industry volume related to overseas markets to which the Company exports (such as Sri Lanka, the Middle East) witnessed a reduction of about 25% over the previous year.[18] To combat the impact of decline in CV sales, the Company focused on non-cyclical businesses in the portfolio. The Company produced in all 54,049 vehicles during the year. To contain costs and conserve cash, the Company worked only about 50% of the working days in all its manufacturing units during the second half of the year.
competitive in India as compared to some of the neighbouring countries like China, Thailand, Indonesia, etc. Wold Price - Energy Crude Oil Description: The world price of crude oil, $US/barrel, and price analysis. The price of oil and petrol affect the driving habits of consumers and the type of car they buy. Over the past five years, the price of petrol has been influenced the buying decision of motorists, who are switching more to fuel efficient options. These include cars that run on liquefied petroleum gas (LPG), diesel and small cars that achieve better mileage. The trucking sector has also been struggling with the rise in the price of fuel, which has put enormous pressures on their costs.