History of the automobile industry

With the invention of the wheel in 4000 BC, mans journey on the road of mechanized transport had begun. Since then he continually sought to devise an automated, labor saving machine to replace the horse. Innumerable attempts reached conclusion in the early 1760s with the building of the first steam driven tractor by a French Captain, Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce the first vehicles powered by the internal combustion engine in 1885. It was then that the petrol engine was introduced, which made the car a practical and safe proposition. The cars in this period were more like the cars on our roads today. With cars came the era of speed. The first ever land-speed record was established about a 100 years back, in 1898. Count Gaston de Chasseloup-Laubat of France drove an electric car (in Acheres near Paris) at a speed of 39.24 miles per hour. This flagged off the era of wheels racing, which lasted till 1964, after which jet and rocket propelled vehicles were allowed. Then onwards, it has been one big journey...on the roads.

Milestone
A behind- the- scenes look into the making of one of India's most vibrant industries. The landmarks along the way... 1928- The first imported car was seen on Indian roads 1942- Hindustan Motors incorporated 1944- Premier automobiles started 1948- First car manufactured in India 1953- The Government of India decreed that only those firms which have a manufacturing program should be allowed to operate 1955- Only seven firms, namely, HM, API, ALL, SMPIL, PAL, M& M and TELCO received approval. 1960 - 1970 - The two, three wheeler industry established a foothold in the Indian scenario. 1970 - 1980 - Not much change was witnessed during this period. The major factors affecting the industry were the implementation of the MRTP Act( Monopolies and Trade Restrictive Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973 and 1979. 1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the liberalization of the Government's protectionist policies, the advantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear This period is also marked by the entry of a large number of firms in the market. 4 Japanese manufacturers entered the Commercial Vehicle and Two- Wheeler market. The Government agreed to the demand for allowing foreign collaboration in the automobile sector. The industry witnessed a resurgence due to major policy changes like relaxation in MRTP and FERA, delicensing of some ancillary products, broad banding of the products and modification in the licensing policy. Also, the concessions it gave to the private sector and

the new foreign collaboration policy, all resulted in higher growth and better performance of the industry than in the earlier decades. The Government of India tied up with Suzuki Inc. of Japan which produced India's most successful car- the Maruti. 1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed with, and the automobile industries were allowed to expand freely. 1993 - With the winds of liberalization sweeping the Indian car market, many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into the Indian car market. 1997 - The National Highway Policy was announced which will hopefully have a positive impact on the automobile industry. The Government also laid down the emission standards to be met by car manufacturers in India in the coming millennium. There were two successively stringent emission levels to be met by April 2000 and April 2005, respectively. These norms were benchmarked on the basis of those already adopted in Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region(NCR) of Delhi. The deadline was later extended to 1st June, 1999.

Advent of the automobile industry in India

From the singsong rhythm of the bullock cart to the jet-age, India has traveled a long way. An average Indians dream car may not be the design-savvy Honda or the stately limousine, but he sure can dream, and afford, the Maruti now. It was in 1898 that the first motorcar rode down Indias roads. From then till the First World War, about 4,000 cars were directly imported to India from foreign manufacturers. The growing demand for these cars established the inherent requirements of the Indian market that these merchants were quick to pounce upon. The Hindustan Motors (HM) was set up in 1942 and in 1944, Premier Autobackmobile (PAL) was established to manufacture automobiles in India. However, it was PAL who produced the first car in India in 1946, as HM concentrated on auto components and could produce their first car only in 1949.It was left to another company, Mahindra and Mahindra (M&M) to manufacture sturdier utility vehicles, namely the American Jeep. In the 50s, the Government of India granted approval to only 7 car dealers to operate in India - HM, API, ALL, SMPIL, PAL, M&M and Telco. The protectionist policies continued to remain in place. The 60s witnessed the establishment of the two-three wheeler industry in India and in the 70s, things remained much the same. Since the 80s, the Indian car Industry has seen a major resurgence with the opening up of Indian shores to foreign manufacturers and collaborators. The 90s have become the melting point for the car industry in India. The consumer is king. He is being constantly wooed by both the Indian and foreign manufacturers. Though sales had taken a dip in the first few months of 1999, it is back to boom time. New models like Marutis Classic, Alto, Station Wagon, Fords Ikon, the new look Mitsubishi Lancer are all being launched with an eye on the emerging market. In these last years of the millennium, suffice it is to say that Indian cars will only grow from strength to strength.

Automobile Industry in India has witnessed a tremendous growth in recent years and is all set to carry on the momentum in the foreseeable future. Indian automobile industry has come a long way since the first car ran on the streets of Bombay in 1898. Today, automobile sector in India is one of the key sectors of the economy in terms of the employment. Directly and indirectly it employs more than 10 million people and if we add the number of people employed in the auto-component and auto ancillary industry then the number goes even higher. The automobile industry comprises of heavy vehicles (trucks, buses, tempos, tractors); passenger cars; and two-wheelers. Heavy vehicles section is dominated by Tata-Telco, Ashok Leyland, Eicher Motors, Mahindra and Mahindra, and Bajaj. The major car manufacturers in India 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., and Skoda India Private Ltd., Toyota Motors, Tata Motors etc. The dominant players in the two-wheeler sector are Hero Honda, Bajaj, TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., Yamaha etc. In the initial years after independence Indian automobile industry was plagued by unfavourable government policies. All it had to offer in the passenger car segment was a 1940s Morris model called the Ambassador and a 1960s Suzuki-derived model called the Maruti 800. The automobile sector in India underwent a metamorphosis as a result of the liberalization policies initiated in the 1991. Measures such as relaxation of the foreign exchange and equity regulations, reduction of tariffs on imports, and refining the banking policies played a vital role in turning around the Indian automobile industry. Until the mid 1990s, the Indian auto sector consisted of just a handful of local companies. However, after the sector opened to foreign direct investment in 1996, global majors moved in. Automobile industry in India also received an unintended boost from stringent government auto emission regulations over the past few years. This ensured that vehicles produced in India conformed to the standards of the developed world. Indian automobile industry has matured in last few years and offers differentiated products for different segments of the society. It is currently making inroads into the rural middle class market after its inroads into the urban markets and rural rich. In the recent years Indian automobile sector has witnessed a slew of investments. India is on every major global automobile player's radar. Indian automobile industry is also fast becoming an outsourcing hub for automobile companies worldwide, as indicated by the zooming automobile exports from the country. Today, Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have set up their manufacturing bases in India. Due to rapid economic growth and higher disposable income it is believed that the success story of the Indian automobile industry is not going to end soon.

Some of the major characteristics of Indian automobile sector are: Second largest two-wheeler market in the world. Fourth largest commercial vehicle market in the world. 11th largest passenger car market in the world Expected to become the world's third largest automobile market by 2030, behind only China and the US.