Automotive industry in India

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Chennai is home to around 35-40% of India's total automobile industry and for this reason it is known as the Detroit of Asia. It is on the way to becoming the world's largest Auto hub by 2016 with a capacity of over 3 million cars annually
Mahindra Scorpio, one of India's best selling natively developed SUV

The automotive industry in India is one of the largest automotive markets in the world. It had previously been one of the fastest growing markets globally, but is currently experiencing flat or negative growth rates.[1][2] India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011.[3] According to recent reports, India overtook Brazil to become the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil).[4] Throughout the course of 2011 and 2012, the industry grew 16-18%, selling around three million units.[4] In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.[5] In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars.

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 (after China) fastest growing automobile market in the world in that year.[6][7] According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected.[1]

The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%.[8] Chennai, houses the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, Mini, and Datsun. Chennai accounts for 60% of the country's automotive exports.[9] Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based.[10] 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, Jaguar Cars, Fiat and Force Motors[11][12] having assembly plants in the area. Nashik has a major base of Mahindra and Mahindra with a SUV assembly unit and an Engine assembly unit. 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 their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat.[13] Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.[14][15][16][17]

In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made US$6 million in annual revenue with profits close to US$400 thousand.

History[edit]

The first car on India's roads in 1897. Until the 1930s, cars were imported directly, but in very small numbers.

The first car showroom in Secunderabad

An embryonic automotive industry emerged in India in the 1940s. Hindustan was launched in 1942, long time competitor Premier in 1944. They built GM and Fiat products respectively.[18] Mahindra & Mahindra was established by two brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles. 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. In 1953 an import substitution programme was launched, and the import of fully built-up cars began to be impeded.[18]

The Hindustan Ambassador dominated India's automotive market from the 1960s until the mid-80s

However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the license raj which hampered the Indian private sector. Total restrictions for import of vehicles were set and 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 item. In the 1970s price controls were finally lifted, inserting a competitive element into the automobile market.[19] By the 1980s, the automobile market was still dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers.[20] During the eighties, a few competitors began to arrive on the scene.

To promote the auto industry the government started the Delhi Auto Expo which was had its debut showcasing in 1986. The Auto Expo of 1986 was a window for technology transfers showing how the Indian Automotive Industry was absorbing new technologies and promoting indigenous research and development for adapting these technologies for the rugged Indian conditions. The 9 day show was marked by then Prime Minister Rajiv Gandhi.

Liberalisation[edit]

Eventually multinational automakers, such as, though not limited to, Suzuki and Toyota of Japan and Hyundai of South Korea, were allowed to invest in the Indian market ultimately leading to the establishment of an automotive industry in India. Maruti Suzuki was the first, and the most successful of these new entries, and in part the result of government policies to promote the automotive industry beginning in the 1980s.[20] As India began to liberalise their automobile market in 1991, a number of foreign firms also initiated joint ventures with existing Indian companies. The variety of options available to the consumer began to multiply in the nineties, whereas before there had usually only been one option in each price class. By 2000, there were 12 large automotive companies in the Indian market, most of them offshoots of global companies.[21]

The Premier Padmini was the Ambassador's only true competitor

Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets and neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe (Hungary). After some growth in the mid-nineties, exports once again began to drop as the outmoded platforms handed down to Indian manufacturers by multinationals were not competitive.[22] This was not to last, and today India manufactures low-priced cars for markets across the globe. As of 18 March 2013 global brands such as Proton Holdings, PSA Group, Kia, Mazda, Chrysler, Dodge and Geely Holding Group are shelving plans for India due to the global economic crisis.[23]

Emission norms[edit]

In tune with international standards to reduce vehicular pollution, the central government unveiled the standards titled 'India 2000' in 2000 with later upgraded guidelines as 'Bharat Stage'. These standards are quite similar to the more stringent European standards and have been traditionally implemented in a phased manner, with the latest upgrade getting implemented in 13 cities and later, in the rest of the nation. Delhi(NCR), Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Lucknow, Solapur, and Agra are the 13 cities where Bharat Stage IV has been imposed while the rest of the nation is still under Bharat Stage III.

Manufacturing facilities[edit]

West Bengal[edit]

Passenger vehicles

Gujarat[edit]

Passenger vehicles
Commercial vehicles

Haryana[edit]

Two wheelers
  • Honda Motorcycle & Scooter India (Manesar)
Hero MotoCorpDharuhera, Gurgaon[27]
Passenger vehicles

Himachal Pradesh[edit]

Two wheelers
Passenger vehicles
Commercial vehicles

Jharkhand[edit]

Commercial vehicles

Karnataka[edit]

Two wheelers
Passenger vehicles
Commercial vehicles

Kerala[edit]

Commercial vehicles[edit]

Madhya Pradesh[edit]

Two wheelers
Commercial vehicles

Maharashtra[edit]

Two wheelers
Passenger vehicles
Commercial vehicles

Punjab[edit]

Commercial vehicles

Rajasthan[edit]

Passenger vehicles
Two Wheelers
Honda Motorcycle & Scooter (I) Pvt. Ltd. (Tapukara)
Commercial vehicles

Tamil Nadu[edit]

Two wheelers
Passenger vehicles
Commercial vehicles

Uttar Pradesh[edit]

Commercial vehicles
Two wheelers
Passenger vehicles

Uttarakhand[edit]

Commercial vehicles

Exports[edit]

Mahindra Scorpio Jeep in service with 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.[80] India's automobile exports are expected to cross $12 billion by 2014.[81]

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, Nissan, Toyota, Volkswagen and Maruti Suzuki.[82]

In 2008, South Korean multinational 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.[83] Similarly, US automobile company, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011.[84]

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.[85] The company said that the plant was a part of its plan to make India the hub for its global production business.[86] Fiat Motors also announced that it would source more than US$1 billion worth auto components from India.[87]

A Tata Safari on display in Poznan, Poland.

In July 2010, The Economic Times reported that PSA Peugeot Citroën 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 € 700M in the operation.[88] PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010. 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.[5]

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 Maruti Exports' shipments to Suzuki's other markets, 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 the Tata Nano in Europe and in 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 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.[89] 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.[89]

Top 18 export destinations in 2007-2008 and growth from previous year[edit]

Rank Country 2007-2008 (in USD Millions) 2008-2009 (in USD Millions) Percentage Growth
1 United States of America 593.64 525.24 -11.52
2 Italy 332.35 359.68 8.21
3 Sri Lanka 249.14 216.11 -13.26
4 South Africa 224.93 188.57 -15.79
5 United Kingdom 165.57 246.32 48.77
6 United Arab Emirates 164.44 192.74 17.21
7 Algeria 147.34 265.63 80.28
8 Bangladesh 137.26 164.86 20.11
9 Egypt 134.43 143.54 5.99
10 Germany 133.52 409.63 206.8
11 Colombia 118.88 120.71 1.54
12 Nepal 111.33 98.13 -11.86
13 Mexico 93.80 94.10 0.32
14 Turkey 83.53 73.82 -11.63
15 Spain 81.01 56.96 -29.69
16 France 76.77 134.21 74.83
17 Nigeria 66.01 148.74 125.03
18 Greece 65.75 127.63 94.1
19 Netherland 65.19 163.66 151.05
20 Ghana 59.91 38.30 -36.07

Passenger vehicles in India[edit]

Maruti Suzuki is the largest Indian passenger vehicle manufacturer in the local market[90]

This list is of cars that are officially available and serviced in India. While other cars can be imported to the country at a steep 105%[91] import duty, car-makers such as Alfa Romeo,[92] McLaren,[93] Pagani,[94] Cadillac,[95] Chrysler,[96] SSC,[97] Lincoln,[98] Zenvo,[99] SEAT,[100] Smart,[101] Daihatsu,[102] Lexus,[103] Infiniti,[104] Acura,[105] Saab,[106] Spyker,[107] Lotus,[108] Ariel,[109] Caterham,[110] Peugeot-Citroën,[111] Mazda,[112] Jeep,[113] Kia,[114] GAZ,[115] and Proton[116] in various stages of official introduction into the Indian automobile industry.

Indian automotive companies[edit]

Maruti Swift in India. Maruti Suzuki is a subsidiary of Suzuki Motor Corporation of Japan
Mahindra XUV500, one of India's best selling indigenously developed SUV

Defunct Indian automotive companies[edit]

Foreign automotive companies in India[edit]

Hyundai, Suzuki, BMW, Audi, Mercedes Benz, Ford, Fiat, Honda, Chevrolet(of General Motors), Toyota, Lamborghini, Jaguar, Eicher, TAFE, are the foreign automotive companies that manufacture and market their products in India

Vehicles manufactured or assembled in India[edit]

Manufactured only in Chennai, India, the i10 is one of Hyundai's best selling globally exported cars.

Opel was present in India until 2006. As of 2013, Opel only provides spare parts and vehicle servicing to existing Opel vehicle owners.

Vehicles brought into India as CBUs[edit]

Suzuki Kizashi. Kizashis are sold by Maruti in the Indian market

Commercial vehicle manufacturers in India[edit]

Indian brands[edit]

Joint-venture (JV) brands[edit]

Foreign-owned brands[edit]

Electric car manufacturers in India[edit]

Electric vehicle and Hybrid vehicle (xEV) industry[edit]

During April 2012 Indian Government has planned to unveil the road map for the development of the domestic electric and hybrid vehicles (xEV) in the country.[202] A discussion between the various stakeholders including Government, industry and the academia is expected to take place during 23–24 February.[202] The final contours of the policy will be formed after this set of discussions. Ministries such as Petroleum, Finance, Road Transport and Power are involved in developing a broad framework for the sector. Along with these ministries big auto industry names such as Mr Anand Mahindra (Vice Chairman and Managing Director, Mahindra & Mahindra) and Mr Vikram Kirloskar (Vice-Chairman, Toyota Kirloskar) are also involved in this task.[202] The Government has also proposed to set up a Rs 740 crore research and development fund for the sector in the 12th five year plan during 2012-17.[202] The idea is to reduce the high cost of key imported components such as the battery and electric motor and develop such capabilities locally.

Defunct motor vehicle manufacturers of India[edit]

  • Automobile Products of India or API - founded in 1949 at Bombay (now Mumbai), by the British company Rootes Group,[203] and later bought over by M. A. Chidambaram of the MAC Group from Madras (now Chennai).[203] The company manufactured Lambretta scooters, API Three Wheelers under licence from Innocenti of Italy and Automobile ancillaries, notably Clutch and Braking systems. API's registered offices were earlier in Mumbai, later shifted to Chennai, in Tamil Nadu. The manufacturing facilities were located in Mumbai and Aurangabad in Maharashtra and in Ambattur, Chennai.[204] The company has not been operational since 2002.
  • Escorts Yamaha - in 1984 Escorts formed a joint venture with Yamaha to manufacture motorcycles. In 2008 became India Yamaha Motor.
  • Hero Motors is a former moped and scooter manufacturer based in Delhi, India. It is a part of multinational company Hero Group, which also currently owns Hero Motocorp (formerly Hero Honda) and Hero Cycles, among others. Hero Motors was started in the 1960s to manufacture 50 cc two-stroke mopeds but gradually diversified into making larger mopeds, mokicks and scooters in the 1980s and the 1990s. Noteworthy collaborators and technical partners were Puch of Austria and Malaguti of Italy. Due to tightening emission regulations and poor sales, Hero motors have discontinued the manufacture of all gasoline powered vehicles and transformed itself into an electric two-wheeler and auto parts manufacturer.
  • Ideal Jawa - motorcycle company based in Mysore, sold licensed Jawa and ČZ motorcycles beginning in 1960 under the brand name Jawa and later Yezdi.
  • Kinetic Honda - a joint venture between Kinetic Engineering Limited, India and Honda Motor Company, Japan. The JV operated during 1984 - 1998, manufacturing 2-stroke scooters in India. In 1998, the joint venture was terminated after which Kinetic Engineering continued to sell the models under the brand name Kinetic until 2008[205] when the interests were sold to Mahindra.
  • Mopeds India Limited - produces the Suvega range of Mopeds under technical collaboration with Motobécane of France.
  • Standard - produced by Standard Motor Products in Madras from 1949 to 1988. Indian Standards were variations of vehicles made in the U.K. by Standard-Triumph. Standard Motor Products of India Ltd. (SMPI) was incorporated in 1948,[206] and their first product was the Vanguard, which began to be assembled in 1949. The company was dissolved in 2006 and the old plant torn down.

Gallery of automobile plants in India[edit]

See also[edit]

Works cited[edit]

References[edit]

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