Importance of Automobile and Automotive Industry in India

Automobile Industry in India:

One of the effervescent and emerging industries of India is the automobile industry which contributes about 22% of manufacturing GDP. A vast number of employment opportunities are available in this sector that indirectly leads to 3 to 5 ancillary jobs.

India is currently holding the third position in the exporter field of two-wheelers after China and Japan. The next few years are projected to show the mature stage with cautious growth with increased features, affordability and income patterns of people.

Automotive Industry in India:

The automotive industry’s success lies in the victory of the automobile sector. Incorporating the demand for the automobiles and technological advancements, the automobiles accessories and component industry in India has evolved as a key market with great potential in Asia as well as the world. The country supplies auto ancillaries to international automobile makers like General Motors, Ford, and Toyota. India bags the position of 22^nd rank among the global component exporting countries. It is expected to reach 9^th rank in exports by 2020.

Market size:

Three wheeler segments posted a 24% growth to 51,461 units on the back of enlarged demands from the urban market. Scooter sales have kicked off by 29% in the current financial year. Tractor sales in the country are expected to grow at a compounded annual growth rate of 8-9% in the next five years.

Indian automobiles accessories and component industry can be diversified into organised and unorganised sectors. Organised sector caters to Original Equipment Manufacturers (OEMs) and comprises high-value precision instrument whereas the unorganized sector constitutes low-valued products and serves the aftermarket category. Majority of exports are done to countries like Europe that sketches for 35% followed by countries in North America with 26%.

Growth drivers of Automobile market:

• Ascending industrial and agricultural output
• Increased per capita income
• Rise in disposable income in agro-sector of rural areas
• Affordable Financial schemes

Government initiatives:

The increase in demand for the automobiles in India has encouraged foreign direct investments to 100%. The Government of India’s Automotive Mission Plan has ensured the growth of this sector in the global market.

Productsin the Automobile sector:

• Car care products like additives-fuel,
• Auto electrical and light system which comprises of the accelerator cable, adhesive headlight covers and alternator assemblies
• Vehicle equipment and tools like grease nipples and grease guns, jacks, lifting devices, etc.

The list gets lengthier day by day due to the customization of each automobile according to the wish of the customer. The greater demand for the automobiles has led the path for the growth of the automobile sector.

The demand for the automobiles is dependent on the positive sentiments and the demand for the vehicles in the market. The new version of hybrid cars is expected in the Indian market.

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