Emergence of India as Small Car Manufacturing Hub

Topics: Automotive industry, Volkswagen Group, Automobile Pages: 8 (1990 words) Published: March 16, 2013







The Emergence of India as a Small Car Manufacturing Hub

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Name| Roll No.|
Akshay Deshpande| 12DM-051|
Rahul Sharma| 12DM-110|
Ravi Ranjan| 12DM-119|
Varun Sudhindra| 12DM-161|
Krishna Prasad| 12FN-065|
Vaibhav Garg| 12FN-151|
Kumar Mrigendra| 12HR-013|


Present Scenario4
Factors that have made India an attractive destination for automotive companies4
The Road Ahead5
Government Measures5
India: World’s Compact Car Hub6
Develop global supply capabilities8
Improve product development capabilities9
Establish an agile supply chain9

Automotive Industry, globally, as well in India, is one of the key sectors of the economy. Due to its deep forward and backward linkages with several key segments of the economy, automotive industry has a strong multiplier effect and acts as one of the drivers of economic growth. The well-developed Indian automotive industry produces a wide variety of vehicles: passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters, motor-cycles, mopeds, three wheelers, tractors and other agricultural equipments etc. The sector has tremendous potential for providing employment. This will increase the present figure of employment in manufacturing sector which presently is quite low at 12% as compared to the countries like Malaysia (50%); Korea (62%) and China (31%).

The Indian Automotive Industry started its new journey from 1991 with de-licensing of the sector and subsequent opening up for 100 percent FDI through automatic route. The surge in number of people with higher purchasing power along with strong growth in economy over a past few years has attracted the major auto manufacturers.

The market linked exchange rate and availability of trained manpower at competitive cost has added to the attraction of Indian market. This increasing pull of Indian market on one hand and the near stagnant rate of growth in auto sector in markets of USA, EU and Japan have worked as a push factor for shifting of new capacities and capital in the auto industry to India. The increasing competition in auto companies has not only resulted in a spurt in choices of Indian consumers at competitive costs, it has also ensured an improvement in productivity by almost 20 percent a year in auto industry, taking it to one of the highest in Indian manufacturing sector

Present Scenario

By the early 2000s, India started to develop indigenous technologies at par with the international offerings. This was possible because of a large technically trained population and the cost benefit offered by India. This allowed world class automobiles to be manufactured in India at low-cost. Below are some of the world’s leading car manufacturers in India.

Automotive industry of India is now finding increasing recognition worldwide. India is currently the 3rd largest producer of small cars in the world. Supported with policies like India’s Auto Policy of 2002, foreign manufacturers can directly assemble/manufacture cars in India. While a beginning has been made in export of vehicles, the potential in this area still remains to be fully tapped. Factors that have made India an attractive destination for automotive companies

India has slowly emerged as a hot favourite location for Auto Makers. The various factors contributing to this are as follows:

*  Central...

References: * Shiv Shivraman, Manish Mathur ; India 's Auto Component Suppliers: New Frontiers in Growth; http://www.atkearney.com/paper/-/asset_publisher/dVxv4Hz2h8bS/content/india-s-auto-component-suppliers-new-frontiers-in-growth/10192; June 2012
* Viral Dholakia; Can India replicate Chinese model of creating Manufacturing hubs?; http://trak.in/tags/business/2011/04/02/can-india-replicate-chinese-model-of-manufacturing-hubs/; April 2 2011
* The Emergence of India as a Small Car Manufacturing Hub; http://www.albrightstonebridge.com/india_car_hub/; Jan 12 2013
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