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] As of 2010, India is home to 40 million passenger vehicles and 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 car sales are projected to increase up to 5 million vehicles 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] India's largest car manufacturing industry hub is based in and around Chennai, also known as the "Detroit of India"[8] 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 per cent of the country's automotive exports.[9] Gurgaon and Manesar in Haryana are hubs where all of the Maruti Suzuki cars in India are manufactured.[10] The Chakancorridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors[11][12] having assembly plants in the area. Ahmedabad with the Tata Nano plant and planned Ford and Peugeot-Citroen plants,[13] Halol again with General Motors, Aurangabad with Audi, Skoda and Volkswagen, Kolkatta with Hindustan some of the other automotive manufacturing regions around the country. Overview Overview The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. [17] 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%.[17] 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.[17] The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people.[17] The supply chain of this industry in India is very similar to the supply chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. 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. Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring 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%.[17] 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, Indias increasing per capita disposable income which is expected to rise by 106% by 2015 [17] and growth in exports is playing a major role in the rise and competitiveness of the industry. Motors, Noidawith Honda and Bangalore with Toyota are

Tata Motors is leading the commercial vehicle segment with a market share of about 64%. [17] Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%.[17] 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%[17] of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler 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.[18] The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.[19] 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.
[20]

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.[20] 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.[21] In February 2009, monthly sales of passenger cars in India exceeded 100,000 units [22] and has since grown rapidly to a record monthly high of 182,992 units in October 2009.[23] 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 [24]) this progression is unlikely to stop in the coming decade.
[25]

Congestion of Indian roads, more than market demand, will likely be the limiting factor.[26]

SIAM is the apex industry body representing all the vehicle manufacturers, home-grown and international, in India.[27] [edit]Industry Definition

This class consists of units mainly engaged in manufacturing motor vehicles or motor vehicle engines. Products and Services The primary activities of this industry are: Motor cars manufacturing Motor vehicle engine manufacturing The major products and services in this industry are: Passenger motor vehicle manufacturing segment (Passenger Cars, Utility Vehicles & Multi Purpose Vehicles) Commercial Vehicles (Medium & Heavy and Light Commercial Vehicles) Two Wheelers Three Wheelers [edit]Supply Chain of Automobile Industry The supply chain of automotive industry in India is very similar to the supply chain of the automotive industry in Europe and America. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Automakers in India are the key to the supply chain and are responsible for the products and innovation in the industry. The description and the role of each of the contributors to the supply chain are discussed below. Third Tier Suppliers: These companies provide basic products like rubber, glass, steel, plastic and aluminium to the second tier suppliers. Second Tier Suppliers: These companies design vehicle systems or bodies for First Tier Suppliers and OEMs. They work on designs provided by the first tier suppliers or OEMs. They 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, in order to follow their customers to various locations around the world. They design and innovate in order 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-axel-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. [edit]Key statistics The production of automobiles has greatly increased in the last decade. It passed the 1 million mark during 2003-2004 and has more than doubled since.[28]

Year

Car Production

% Change

Commercial

% Change

Total Vehicles Prodn.

% Change

2010

2,814,584

29.39

722,199

54.86

3,536,783

33.89

2009

2,175,220

17.83

466,330

-4.10

2,641,550

13.25

2008

1,846,051

7.74

486,277

-9.99

2,332,328

3.35

2007

1,713,479

16.33

540,250

-1.20

2,253,999

10.39

2006

1,473,000

16.53

546,808

50.74

2,019,808

19.36

2005

1,264,000

7.27

362, 755

9.00

1,628,755

7.22

2004

1,178,354

29.78

332,803

31.25

1,511,157

23.13

2003

907,968

28.98

253,555

32.86

1,161,523

22.96

2002

703,948

7.55

190,848

19.24

894796

8.96

2001

654,557

26.37

160,054

-43.52

814611

1.62

2000

517,957

-2.85

283,403

-0.58

801360

-2.10

1999

533,149

285,044

818193

Year

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Motor Vehicle Production[17]

8,467,853

9,743,503

11,087,997

10,853,930

11,175,479

Industry Revenue USD Million [17] 24,379

26,969

30,507

32,383

33,342*

Year

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Exports (Units)[17]

629,544

806,222

1,011,529

1,238,333

1,530,660

Exports (Revenue)[17] [edit]Automobile Production

1,915

2,231

2,552

3,008

3,718*

Type of Vehicle

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Passenger Vehicles [17]

1,209,876

1,309,300

1,545,223

1,777,583

1,838,697

Commercial Vehicles [17] 353,703

391,083

519,982

549,006

417,126

Three Wheelers [17]

374,445

434,423

556,126

500,660

501,030

Two Wheelers [17]

6,529,829

7,608,697

8,466,666

8,026,681

8,418,626

Total [edit]Automobile Sales

8,467,853

9,743,503

11,087,997

10,853,930

11,175,479

Type of Vehicle

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Passenger Vehicles [17]

1,061,572

1,143,076

1,379,979

1,549,882

1,551,880

Commercial Vehicles [17] 318,430

351,041

467,765

490,494

384,122

Three Wheelers [17]

307,862

359,920

403,910

364,781

349,719

Two Wheelers [17]

6,209,765

7,052,391

7,872,334

7,249,278

7,437,670

Total

7,897,629

8,906,428

10,123,988

9,654,435

9,723,391

[edit]Automobile Exports

Type of Vehicle

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Passenger Vehicles [17]

166,402

175,572

198,452

218,401

335,739

Commercial Vehicles [17] 29,940

40,600

49,537

58,994

42,673

Three Wheelers [17]

66,795

76,881

143,896

141,225

148,074

Two Wheelers [17]

366,407

513,169

619,644

819,713

1,004,174

Total

629,544

806,222

1,011,529

1,238,333

1,530,660

[edit]Product and service segmentation The automotive industry of India is categorised into passenger cars, two wheelers, commercial vehicles and three wheelers, with two wheelers dominating the market. More than 75% of the vehicles sold are two wheelers. Nearly 59% of these two wheelers sold were motorcycles and about 12% were scooters. Mopeds occupy a small portion in the two wheeler market however; electric two wheelers are yet to penetrate. The passenger vehicles are further categorised into passenger cars, utility vehicles and multi-purpose vehicles. All sedan, hatchback, station wagon and sports cars fall under passenger cars. Tata Nano, is the worlds cheapest passenger car, manufactured by Tata Motors - a leading automaker of India. Multi-purpose vehicles or people-carriers are similar in shape to a van and are taller than a sedan, hatchback or a station wagon, and are designed for maximum interior room. Utility vehicles are designed for specific tasks. The passenger vehicles manufacturing account for about 15% of the market in India. Commercial vehicles are categorised into heavy, medium and light. They account for about 5% of the market. Three wheelers are categorised into passenger carriers and goods carriers. Three wheelers account for about 4% of the market in India.

Segment[17]

2003-04

2004-05

2005-06

2006-07

2007-08

Passenger Car[17] (%)

10.22

10.39

9.91

10.65

12.42

Utility Vehicles (UVs) (%)

2.15

2.23

2.18

2.18

2.39

Multi Purpose Vehicles (MPVs) (%)

0.87

0.82

0.75

0.82

0.98

Total Passenger Vehicles[17] (%)

13.25

13.44

12.83

13.65

15.79

Passenger Carriers (%)

0.36

0.32

0.32

0.28

0.43

Segment[17]

2003-04

2004-05

2005-06

2006-07

2007-08

Goods Carriers (%)

2.01

2.19

2.01

2.44

2.10

Total Medium & Heavy Commercial Vehicles[17] (%) 2.37

2.51

2.33

2.73

2.53

Passenger Carriers (%)

0.28

0.25

0.25

0.24

0.32

Goods Carriers (%)

1.17

1.27

1.36

1.67

1.77

Total Light Commercial Vehicles (%)

1.45

1.52

1.61

1.90

2.10

Total Commercial Vehicles[17] (%)

3.82

4.03

3.94

4.63

4.63

Passenger Carriers (%)

2.56

2.17

2.39

2.34

2.51

Goods Carriers (%)

1.61

1.73

1.65

1.65

1.51

Total Three Wheelers[17] (%)

4.17

3.90

4.04

4.00

4.01

Scoters/Scooterettee (%)

13.01

11.68

10.21

9.31

11.57

Motorcycles/Step-Throughs (%)

61.24

62.86

65.24

64.83

59.35

Mopeds (%)

4.52

4.08

3.74

3.52

4.47

Electric Two Wheelers (%)

0.07

0.19

Total Two Wheelers[17] (%)

78.76

78.63

79.18

77.73

75.57

Grand Total[17] (%)

100.00

100.00

100.00

100.00

100.00

Segment[17]

2003-04

2004-05

2005-06

2006-07

2007-08

[edit]Vehicle Registration India had over 100 million vehicles registered on its roads in the year 2008.[17] This is a growth of about 100% in the past 9 years. Over 77% and about 77 million of these vehicles are two wheelers, about 14% and over 14 million are cars, jeeps and taxis. Over 5 million and over 1 million vehicles registered are goods vehicles and buses respectively.[17] Two wheelers account a significant market share. Tata Motors with the launch of Tata Nano is trying to attract some of these two wheeler buyers to buy a small, cheap and affordable passenger car. [edit]Total Number of Vehicle Registrations in India from 2001 to 2008

Year

All '000)

Vehicles

(in Two '000)

Wheelers

(in Cars, Jeeps and Taxis (in '000)

Buses (in '000)

Goods '000)

Vehicles

(in Other '000)

Vehicles

(in

2001

54,991

38,556

7,058

634

2,948

5,795

2002

58,924

41,581

7,613

635

2,974

6,121

2003

67,007

47,519

8,599

721

3,492

6,676

2004

72,718

51,922

9,451

768

3,749

6,828

2005

80,045

57,417

10,460

822

4,053

7,337

2006

88,068

63,487

11,571

879

4,345

7,891

2007

96,808

70,141

12,810

936

4,652

8,464

2008

106,591

77,588

14,222

1,003

5,018

9,065

[edit]Emission norms See also: Bharat Stage emission standards 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, Bengaluru, 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. [edit]Geographic Segmentation The total number of new vehicles registered in the 28 states and 7 union territories of India in the year 2008 were about 106,591,000. The diagram above displays the registration of new vehicles in various states and union territories. About 16 states and 1 union territory had over a million new vehicles registered. Tamil Nadu had about 16 million new vehicles registered, Maharashtra had over 13 million, and Gujarat had over 10 million. About 91% of these vehicles are non-commercial vehicles purchased by households looking for a two wheeler, or a car. Only about 9% of new vehicles registered are used for commercial purposes. Details of category wise new vehicle registrations in the various states and union territories are displayed. The number of new vehicles registrations has grown by about 66% in the past five years. [edit]Geographical Segmentation:State-wise motor vehicles registration in India from 2001 - 2008

States\Year

2001 (in '000) 2002 (in '000) 2003 (in '000) 2004 (in '000) 2005 (in '000) 2006 (in '000) 2007 (in '000) 2008 (in '000)

Andhra Pradesh

3,966

4,389

5,002

5,720

6,446

7,232

8,042

8,989

Arunachal Pradesh

21

21

21

21

21

21

21

21

Assam

542

596

657

727

798

883

973

1,086

Bihar

949

1,024

1,121

751

726

694

647

593

Chhattisgarh

857

948

1,076

1,216

1,367

1,536

1,726

1,939

Goa

341

366

397

436

483

537

585

638

Gujarat

5,576

6,008

6,508

7,087

7,892

8,785

9,633

10,543

Haryana

1,949

2,122

2,279

2,548

2,883

3,267

3,689

4,164

Himachal Pradesh

217

244

269

289

329

375

421

480

Jammu & Kashmir

330

364

399

439

493

556

628

719

Jharkhand

909

984

1,101

1,217

1,341

1,479

1,630

1,796

States\Year

2001 (in '000) 2002 (in '000) 2003 (in '000) 2004 (in '000) 2005 (in '000) 2006 (in '000) 2007 (in '000) 2008 (in '000)

Karnataka

3,537

3,636

3,738

3,977

4,338

4,717

5,036

5,360

Kerala

2,112

2,315

2,552

2,792

3,180

3,612

4,034

4,564

Madhya Pradesh

3,095

3,173

3,459

3,804

4,119

4,442

4,710

4,968

Maharashtra

6,760

7,414

8,134

8,969

10,055

11,281

12,477

13,817

Manipur

77

90

97

106

114

123

134

145

Meghalaya

62

67

73

73

78

84

89

95

Mizoram

31

34

37

42

48

54

61

70

Nagaland

160

177

162

172

186

201

215

230

Orissa

1,096

1,215

1,359

1,525

1,717

1,936

2,159

2,417

Punjab

2,910

3,103

3,308

3,529

3,859

4,225

4,571

4,992

Rajasthan

2,943

3,197

3,487

3,834

4,285

4,791

5,281

5,815

Sikkim

12

13

15

17

19

21

23

25

Tamil Nadu

5,162

5,658

8,005

8,575

10,085

11,901

13,860

16,207

Tripura

50

57

66

76

85

95

105

117

Uttarakhand

364

406

457

516

580

651

732

822

Uttar Pradesh

4,921

5,171

5,928

6,460

7,271

8,144

8,970

9,919

States\Year

2001 (in '000) 2002 (in '000) 2003 (in '000) 2004 (in '000) 2005 (in '000) 2006 (in '000) 2007 (in '000) 2008 (in '000)

West Bengal

1,690

1,690

2,366

2,548

2,816

3,138

3,464

3,833

Andaman & Nicobar Islands

25

28

28

28

31

34

38

42

Chandigarh

386

386

562

586

629

677

732

799

Dadra & Nagar Haveli

13

13

31

35

43

54

67

86

Daman & Diu

37

41

44

48

55

63

71

79

Delhi

3,635

3,699

3,971

4,237

4,544

4,868

5,166

5,469

Lakshadweep

Pondicherry

252

270

293

313

359

418

495

552

[edit]Geographical Segmentation: Category-wise number of registrations in States of India

Ty pe of Ve hi cle
[17]

An Aru dhr nac a hal Ass Bih Pra Pra am ar des des h h Chh attis garh Go a Guj Har ara yan t a

Hi

Ja Jha Kar rkh nata and ka

Ma dhy Ker a ala Pra des h Mah Ma Meg Miz Nag aras nip hala ora alan htra ur ya m d Ori Pun ssa jab Raj asth an Ta Sik mil kim Na du

mac mm hal u & Pra Kas des hmi h r

Utt Tri Utta ar pur rakh Pra a and des h

We st Ben gal

Mult 143, 2,32 83, 30, 40,4 28, 182, 147, 41,6 29,9 62,5 100, 73, 77,1 243, 5,96 14,0 3,21 41,0 50, 75, 173, 1,6 276 6,32 9,79 94,4 241, iaxle 147 3 d/Ar ticul ated Vehi cles/ 189 516 13 326 304 667 44 58 66 596 315 78 113 3 28 5 19 496 921 552 19 ,23 1 5 9 82 035

Ty pe of Ve hi cle
[17]

An Aru dhr nac a hal Ass Bih Pra Pra am ar des des h h Chh attis garh Go a Guj Har ara yan t a

Hi

Ja Jha Kar rkh nata and ka

Ma dhy Ker a ala Pra des h Mah Ma Meg Miz Nag aras nip hala ora alan htra ur ya m d Ori Pun ssa jab Raj asth an Ta Sik mil kim Na du

mac mm hal u & Pra Kas des hmi h r

Utt Tri Utta ar pur rakh Pra a and des h

We st Ben gal

Truc ks & Lorri es

Ligh t Mot or cles (goo ds) 66,8 Vehi 91 555 14, 32, 16,6 317 296 86 204, 58,3 2,34 12,2 336 25 0 72 91,7 55 136 ,18 1 30,0 256, 1,20 30 082 6 1,25 9,24 35, 34, 13,6 5 3 543 645 01 204 353 ,31 595 4 5,66 57,6 2 81

Buse 15,4 s 98

665

10, 10, 2,04 4,8 45,6 9,36 4,87 20,1 9,53 29,7 67, 24,6 49,0 2,40 2,82 286 961 3 68 69 9 2 39 9 10 206 26 92 3 7

840

3,50 13, 18, 55,9 5 966 579 36

406

76, 1,59 4,62 26,4 41,3 907 6 6 37 85

Taxi 81,6 s 27

299

10, 14, 22,0 8,2 40,1 14,9 14,9 10,3 21,8 40,8 368 000 05 73 00 90 70 25 14 39

114 ,24 5

61,4 102, 24 475

363

5,03 3,86 4,44 24, 11, 32,8 4,9 0 4 8 614 982 68 47

116 ,37 257 3

13,3 30,1 67,9 85 93 18

Ligh t Mot or Vehi cles (pass enge r) 263, 1,43 29, 9,5 7,47 9,3 276, 37,8 2,78 14,2 36,2 190, 325 0 806 07 4 75 908 41 3 55 57 362 294 ,24 4 45,1 493, 2,52 2,93 1,14 8,29 21, 36, 64,5 46 142 1 4 5 1 893 838 80 154 ,19 2 12,1 6,79 78,0 38,2 62 9 67 89

Tota 570, 5,27 147 97, 88,6 50, 749, 268, 66,6 86,9 130, 453, 685 238, 1,14 12,4 24,8 10,3 66,5 146 177 340, 7,3 828 20,9 40,2 286, 388 l ,96 ,19 3,90 ,51 ,96 ,02 ,62

Ty pe of Ve hi cle
[17]

An Aru dhr nac a hal Ass Bih Pra Pra am ar des des h h Chh attis garh Go a Guj Har ara yan t a

Hi

Ja Jha Kar rkh nata and ka

Ma dhy Ker a ala Pra des h Mah Ma Meg Miz Nag aras nip hala ora alan htra ur ya m d Ori Pun ssa jab Raj asth an Ta Sik mil kim Na du

mac mm hal u & Pra Kas des hmi h r

Utt Tri Utta ar pur rakh Pra a and des h

We st Ben gal

Com merc 488 2 ial 6 280 21 842 317 192 09 49 176 262 1 404 4 56 19 19 06 2 5 537 25 1 31 71 860 7

Two 4,54 Whe 3,28 elers 3

10,6 05

418 469 ,78 ,75 0 1

991, 022

309 5,16 1,52 ,48 2,16 6,40 8 7 4

152, 253, 937, 286 611 745

2,73 1,5 2,87 6,21 2,67 95, 6,19 6,79 4 808 1 4

75,3 21,0 19,5 36,7 33 50 01 41

1,2 2,5 2,69 23, 87, 2,17 573 181 5

4,6 82

6,7 34, 205

44,2 391, 41 251

4,92 1,5 2,04 81, 7 326

Cars

397, 2,34 738 0

106 ,06 3

27, 43,5 71, 572, 272, 51,9 74,1 92,1 418, 508 72 516 414 895 18 87 71 181

378 ,91 2

148, 924, 8,03 14,5 4,85 33,2 62, 030 006 0 95 0 73 553

267 ,37 9

203, 1,8 991 70

731 ,38 0

8,67 42,2 391, 2 20 443

494 ,50 5

Jeep 58,1 2,26 14, 21, 7,30 s 14 0 266 726 2

110, 87,2 12,3 10,6 23,4 41,0 71, 36,2 262, 7,87 9,40 6,76 21,6 26, 32, 128, 2,8 53, 943 03 31 93 19 24 656 82 741 2 1 5 49 527 797 056 63 987

6,45 97,8 2 21

Omn i s 36,5 Buse 49 3,2 59 1,34 2,76 5 5 44 36,5 30, 13 488 12,6 09 570 207 2,2 38 487 19, 957 787 14,7 36 -

Trac 62,3 tors 63

333

10, 77, 44,3 280 848 21

470

275, 373, 3,89 10,9 15,1 119, 9,0 328, 201, 1,26 543 373 8 69 36 340 04 380 940 3

441 209

1,82 30, 7 592

459 ,01 4

407, 523

90, 886

147

31,9 718, 48, 81 082 341

Trail 46,8 ors 85

155

8,7 50, 38,8 40 403 04

199 ,60 3 62 561

12,5 120, 1,91 12 185 3

164 ,93 3

190, 628

580

2,30 4

254 696

24,1 81

410

57, 013

39, 1,0 910 15

898

10,0 21

Othe 4,50 rs 0

179

20, 2,9 2,10 3,8 16,1 17,0 1,66 1,62 5,79 55,4 19, 11,3 16,1 724 28 3 04 58 78 5 6 9 05 102 08 11

221 772 247

11,0 8,8 4,3 4,51 18 06 54 1

76, 895

541

2,12 19,1 35, 2 88 164

Ty pe of Ve hi cle
[17]

An Aru dhr nac a hal Ass Bih Pra Pra am ar des des h h Chh attis garh Go a Guj Har ara yan t a

Hi

Ja Jha Kar rkh nata and ka

Ma dhy Ker a ala Pra des h Mah Ma Meg Miz Nag aras nip hala ora alan htra ur ya m d Ori Pun ssa jab Raj asth an Ta Sik mil kim Na du

mac mm hal u & Pra Kas des hmi h r

Utt Tri Utta ar pur rakh Pra a and des h

We st Ben gal

Tota l noncom merc ial [edit]Geographical Segmentation: Category-wise registration in Union Territories of India 5,14 9,43 2 15,8 72 578 653 1,12 385 6,33 2,27 ,85 ,42 7,12 ,27 8,17 9,71 3 3 4 8 3 8 222, 351, 204 647 1,08 3,52 2,1 3,56 7,82 6,78 3,32 06, 5,12 4,82 2 2 883 4 9 93,8 48,5 31,8 105, 69 63 26 411 1,3 3,3 3,49 78, 51, 3,26 470 135 9 9,9 11 7,7 47, 220 54,6 475, 16 711 6,17 2,1 3,33 59, 8 336

Type of Vehicle

Andaman & Nicobar Islands

Chandigarh

Dadra & Nagar Daman Haveli Diu

&

Delhi

Lakshadweep Pondicherry

Multiaxled/Articulated Vehicles/Trucks & Lorries

1,519

1,671

5,487

1,896

75,601

6,588

Light Motor Vehicles (goods)

7,459

1,190

1,829

75,947

270

2,923

Buses

459

1,239

154

361

36,059

1,831

Taxis

436

1,173

108

43

24,712

1,421

Light Motor Vehicles (passenger)

784

500

890

20,893

408

4,283

Total Commercial

3,198

11,542

7,439

5,019

233,212

678

17,046

Two Wheelers

21,743

416,917

17,881

30,351

2,665,750 3,978

235,438

Cars

1,693

157,612

9,270

12,278

1,192,389 78

47,642

Jeeps

1,033

429

295

122,283

85

3,838

Type of Vehicle

Andaman & Nicobar Islands

Chandigarh

Dadra & Nagar Daman Haveli Diu

&

Delhi

Lakshadweep Pondicherry

Omni Buses

38

8,386

2,545

Tractors

261

36

44

165

4,851

44

318

Trailors

67

46

124

99

1,582

Others

461

30

9,705

503

4,541

Total non-commercial [edit]Exports

25,258

574,565

27,000

43,281

4,003,463 4,693

295,904

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.[29] India's automobile exports are expected to cross $12 billion by 2014.[30] 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.[31] 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.[32] Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011.[33] In September 2009, Ford Motors announced its plans to setup 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. [34] The company said that the plant was a part of its plan to make India the hub for its global production business.[35] Fiat Motors also announced that it would source more than US$1 billion worth auto components from India.[36]

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. [37] 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 theU.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 theRenault 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.
[38]

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.[38] [edit]Top 20 Export destinations in 2007-2008 and growth from previous year

Rank

Country

2007-2008 (in USD Millions)

2008-2009 (in USD Millions)

Percentage Growth

United States of America 593.64

525.24

-11.52

Italy

332.35

359.68

8.22

Sri Lanka

249.14

216.11

-13.26

South Africa

224.93

188.57

-15.79

Rank

Country

2007-2008 (in USD Millions)

2008-2009 (in USD Millions)

Percentage Growth

United Kingdom

165.57

246.32

48.77

United Arab Emirates

164.44

192.74

17.21

Algeria

147.34

265.63

80.28

Bangladesh

137.26

164.86

20.11

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

Rank

Country

2007-2008 (in USD Millions)

2008-2009 (in USD Millions)

Percentage Growth

[edit]Passenger vehicles in India See also: List of auto plants in India 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% duty, car-makers such as Alfa Romeo,
[50] [40] [39]

import

McLaren, Pagani,

[41]

[42]

Cadillac,

[43]

Chrysler,

[44]

SSC,

[45]

Zenvo,

[46]

SEAT,

[47]

MINI,

[48]

Smart,

[49]

Daihatsu,

Lexus,[51] Infiniti,[52] Acura,[53] Saab,[54] Spyker,[55] Lotus,[56] Peugeot-Citron,[57] Mazda,[58]Jeep,[59] SsangYong,[60] Kia,[61] GAZ[62] and Proton[63] ar

e in varying stages of official introduction to the Indian automobile market. [edit]Indian automotive companies

Chinkara Motors[64]: Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster, Sailster

Hindustan Motors[65]: Ambassador

ICML[66]: Rhino Rx

Mahindra[67]: Major, Xylo, Scorpio, Bolero, Thar, Verito, Genio, XUV500.

Premier Automobiles Limited[68]: Sigma, RiO

San Motors[69]: Storm

Tata Motors[70]: Nano, Indica, Vista, Indigo, Manza, Indigo CS, Sumo, Grande, Venture, Safari, Xenon, Aria

[edit]Foreign automotive companies in India [edit]Vehicles manufactured or assembled in India

Manufactured only in Chennai, India, thei10 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.[71]

BMW India[72]: 3 Series, 5 Series, X1, X3.

Fiat India[73] (in collaboration with Tata Motors): Grande Punto, Linea.

Ford India[74]: Figo, Fiesta Classic, Fiesta, Endeavour.

General Motors India[75]

Chevrolet[76]: Spark, Beat, Aveo U-VA, Aveo, Optra, Cruze, Tavera.

Honda Siel[77]: Brio, Jazz, City, Civic, Accord.

Hyundai Motor India[78]: Eon, Santro, i10, i20, Accent, Verna, Sonata Transform.

Land Rover[79]: Freelander 2

Maruti Suzuki[80]: 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy.

Mercedes-Benz India: C-Class, E-Class.

Mitsubishi[81] (in collaboration with Hindustan Motors):[82] Lancer, Lancer Cedia, Pajero

Nissan Motor India[83]: Micra, Sunny

Renault India[84][85][86]: Fluence, Koleos.

Toyota Kirloskar[87]: Etios Liva Etios, Corolla Altis, Innova, Fortuner.

Volkswagen Group Sales India:

Audi India: A4, A6, Q5.

koda Auto India[88][89]: Fabia, Laura, Superb, Yeti.

Volkswagen India[90][91]: 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.

[edit]Vehicles brought into India as CBUs

Aston Martin[92]: Vantage, Rapide, Virage, DB9, DBS, One-77. Audi[93]: A7, A8, S4, S6, S8, Q7, TT, R8, RS5. Bentley[94][95]: Arnage, Azure, Brooklands, Continental GT, Continental Flying Spur, Mulsanne. BMW[96]: 5 Series GT, 6 Series, 7 Series, X5, X6, X6 M, M3, M5, M6 and Z4. Bugatti[97][98]: Veyron. Chevrolet: Captiva. Ferrari[99][100]: California, 458 Italia, 599 GTB Fiorano, FF. Fiat[73]: 500, Bravo. General Motors[75]: Hummer H2, Hummer H3. Honda[101][102]: Civic Hybrid, CR-V. Hyundai[78]: Santa Fe. Jaguar[103]: XF, XJ, XK. Koenigsegg[104][105]: CCX, CCXR, Agera. Lamborghini[106]: Gallardo, Murcilago. Land Rover[107]: Discovery 4, Range Rover, Range Rover Sport. Maserati[108]: Quattroporte, GranTurismo, GranCabrio. Maybach[109]: 57 and 62. Mercedes-Benz[110]: CL-Class, GL-Class, M-Class, R-Class, CLS-Class, S-Class, SL-Class, SLK-Class, Viano,

G-Class, SLS. Mitsubishi: Montero, Outlander, Evo X. Nissan[111]: Teana, X-Trail, 370Z, GT-R. Porsche[112][113]: 997, Boxster, Panamera, Cayman, Cayenne, Carrera GT. Rolls Royce[114]: Ghost, Phantom, Phantom Coup, Phantom Drophead Coup. koda[88]: Yeti, Superb. Suzuki: Grand Vitara, Kizashi. Toyota[87]: Prius, Camry, Land Cruiser, Land Cruiser Prado.

Volkswagen[115]: Beetle, Tiguan, Touareg, Phaeton. Volvo[116]: S60, S80, XC60, XC90.

[edit]Commercial vehicle manufacturers in India [edit]Indian brands

Force[117] Hindustan Motors[118] Premier[68] Tata[119] AMW[120] Eicher Motors[121]

[edit]Joint Venture Brands

VE Commercial Vehicles Limited[122] - VE Commercial Vehicles limited - A JV between Volvo Groups &

Eicher Motors Limited. Ashok Leyland[123] - originally a JV between Ashok Motors and Leyland Motors, now 51% owned by Hinduja

Group Mahindra Navistar[124] - a 51:49 JV between Mahindra Group and Navistar International Swaraj Mazda[125] - originally a JV between Punjab Tractors and Mazda, now 53.5% owned by Sumitomo

Group Kamaz Vectra[126] - A JV between Russia's KaMAZ and the Vectra Group

[edit]Foreign brands

Volvo[127] Tatra[128] MAN[129] - as a JV with Force Motors, makes MAN Trucks in India Mercedes-Benz[130] Daimler AG[131] - manufactures BharatBenz, a brand of trucks based on the Fuso and the Mercedes Benz truck

platforms, which Daimler AG owns Rosenbauer[132] Scania[133] Iveco[134] Hino[135] Isuzu[136]

Piaggio[137] Caterpillar Inc.[138]

[edit]Electric car manufacturers in India

Ajanta Group[139] Mahindra[140] Hero Electric[141] REVA Tara International[142] Tata[143]

[edit]Market characteristics [edit]Market size The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has attained a turnover of USD 35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion.[17] The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. Indias current GDP is about $ 1.4 trillion and is expected to grow to $ 3.75 trillion by 2020.[17] The projected size in 2016 of the Indian automotive industry varies between $ 122 billion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards Indias GDP by 2016, which is more than double the current contribution.[17] [edit]Demand determinants Determinants of demand for this industry include vehicle prices (which are determined largely by wage, material and equipment costs) and exchange rates, preferences, the running cost of a vehicle (mainly determined by the price of petrol), income, interest rates, scrapping rates, and product innovation. Exchange Rate: Movement in the value of Rupee determines the attractiveness of Indian products overseas and the price of import for domestic consumption. Affordability: Movement in income and interest rates determine the affordability of new motor vehicles. Allowing unrestricted Foreign Direct Investment (FDI) led to increase in competition in the domestic market hence, making better vehicles available at affordable prices. Product Innovation is an important determinant as it allows better models to be available each year and also encourages manufacturing of environmental friendly cars. Demographics: It is evident that high population of India has been one of the major reasons for large size of automobile industry in India. Factors that may be augment demand include rising population and an increasing proportion of young persons in the population that will be more inclined to use and replace cars. Also, increase in people with lesser dependency on traditional single family income structure is likely to add value to vehicle demand. Infrastructure: Longer-term determinants of demand include development in Indians infrastructure. Indias banking giant State Bank of India and Australias Macquarie Group has launched an infrastructure fund to rise up to USD 3 billion for infrastructure improvements. India needs about $500 billion to repair its infrastructure such as ports, roads, and power

units. These investments have been made with an aim to generate long-term cash flow from automobile, power, and telecom industries. (Source: Silicon India) Price of Petrol: Movement in oil prices also have an impact on demand for large cars in India. During periods of high fuel cost as experienced in 2007 and the first half of 2008, demand for large cars declined in favour of smaller, more fuelefficient vehicles. The changing patterns in customer preferences for smaller, more fuel-efficient vehicles led to the launch of Tata Motors Nano one of the worlds smallest and cheapest cars. Surprisingly, when overall passenger car sales have run into problems, the sales of luxury cars and SUVs, which are significantly more expensive in India than abroad due to high import taxes, have experienced encouraging growth. The Indian unit of BMW had to raise capacity at its factory four times during 2011, while sales of the high-end Jaguar Land Rover model owned by Tata Motors rose impressively during a period when more affordable passenger car sales were experiencing a downturn.[144] [edit]International Markets International Markets Exports 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 [edit]International Markets Analysis The Indian automotive industry embarked a new journey in 1991 with de-licensing of the sector and subsequent opening up for 100% foreign direct investment (FDI). Since then almost all global majors have set up their facilities in Indian taking the level of production from 2 million in 1991 to over 10 million in recent years. [17] The exports in automotive sector have grown on an average compound annual growth rate of 30% per year for the last seven years. The export earnings from this sector are over USD 6 billion.[17] Even with this rapid growth, the Indian automotive industrys contribution in global terms is very low. This is evident from the fact that even thought passenger and commercial vehicles have crossed the production figures of 2.3 million in the year 2008,[17] yet Indias share is about 3.28% of world production of 70.53 million passenger and commercial vehicles. Indias automotive exports constitute only about 0.3% of global automotive trade.[17] [edit]Basis of Competition Competition in this industry is high. Competition in this industry is increasing. Automotive industry is a volume-driven industry, and certain critical mass is a pre-requisite for attracting the much-needed investment in research and development and new product design and development. Research and development investment is needed for innovations which is the lifeline for achieving and retaining competitiveness in the industry. This competitiveness in turn depends on the capacity and the speed of the industry to innovate and upgrade. The most important indices of competitiveness are productivity of both labour and capital. The concept of attaining competitiveness on the basis of low cost and abundant labour, favourable exchange rates, low interest rates and concessional duty structure is becoming inadequate and therefore, not sustainable. A greater emphasis is required on the development of the factors like innovation which can ensure competitiveness on a long-term basis.

India, with a rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, availability of trained manpower at competitive cost, fairly well developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost, has emerged as one of the favourite investment destinations for the automotive manufacturers. These advantages need to be leveraged in a manner to attain the twin objective of 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]Life Cycle The life cycle stage is growth Life Cycle Reasons The market for manufacturing motor vehicles is consistently increasing. The products manufactured by this industry are profitable. Companies have been consistently opening new plats and employing over the past five years. Japanese and European manufacturers of motor vehicles have entered the market. Industry value added has been rising, along with the rise in GDP. Life Cycle Analysis General improvement in availability of trained manpower and good infrastructure is required for sustainable growth of the industry. Keeping this in view, the Indian Government has launched a unique initiative of National Automotive Testing and R&D Infrastructure Project (NATRIP) to provide specialised facilities for Testing, Certification and Homologation to the industry. A similar initiative is required for creating specialised institutions in automotive sector for education, training and development. The auto industry has grown in the clusters of interconnected companies which are linked by commonalities and complementarities. The major clusters are in and around Manesar in North, Pune in West, Chennai in South, JamshedpurKolkata in East and Indore in Central India. The Government is planning to create a National Level Specialises Education and Training Institute for Automotive Sector and to enhance the transportation, communication and export infrastructure facilities. The contribution of automotive sector in the GDP of India is expected to double by 2016[17] through major spotlight on export of small cars, Multi-Utility Vehicles, Two and Three wheelers. [edit]Industry Conditions Barriers to Entry Barriers to entry in this industry is high These barriers are study The cost of developing high volume production facilities. The ability to gain access to technology of major global operators. The relatively high competition between established domestic companies and foreign companies. The automobile manufacturing sector is characterised by a high cyclical growth patterns, high fixed cost and break-even point levels, and an excessive number of participants. Barriers to entry into automobile manufacturing activity are formidable. Some of the barriers that need to be overcome by a new entrant include: the cost of developing high volume production facilities, in order to benefit from economies of scale; and the ability to gain access to technology of major operators, as the present incumbents include some of the largest multinationals, that have considerable claims to new technology. The relative large size of domestic market, together with high competition, has already seen significant rationalisation of this industry. [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/non-agricultural 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. Excise Duty Central Excise duty is an indirect tax levied on those automobiles which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the automobiles are manufactured. It is a tax on manufacturing, which is paid by a manufacturer, who passes its incidence on to the customers. Types of Excise Duties Basic Excise Duty: This is the duty leviable under First Schedule to the Central Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. Special Excise Duty: This is the duty leviable under Second Schedule to the Central Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. At present this is leviable on very few items. National Calamity Contingent Duty (NCCD): Normally known as NCCD. This duty is levied as per section 136 of the Finance Act, 2001, as a surcharge on specified goods. Excise Duties and Cesses Leviable under Miscellaneous Act:On certain specified goods, in addition to the aforesaid duties, prescribed rate of excise duty and cess is also leviable. Education Cesson excisable goods is levied in addition to any other duties of excise chargeable on such goods, under the Central Excise Act, 1944 or any other law for the time being in force. [edit]MODVAT and CENVAT Taxation of inputs, like raw materials, components and other intermediaries has a number of limitations. In production process, raw material passes through various processes stages till a final product emerges. Thus, output of the first manufacturer becomes input for second manufacturer and so on. When the inputs are used in the manufacture of product `A', the cost of the final product increases not only on account of the cost of the inputs, but also on account of 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 shall 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. [edit]Customs Duty Customs Duty (Import duty and Export tax) is a type of indirect tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. In India, the basic law for levy and collection of customs duty is Customs Act 1962. It 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. [edit]Service Tax Service tax is a tax levied on services rendered by a person and the responsibility of payment of the tax is cast on the service provider. It is an indirect tax as it can be recovered from the service receiver by the service provider in course of his business transactions. Service Tax was introduced in India in 1994 by Chapter V of the Finance Act, 1994. It was imposed on an initial set of three services in 1994 and the scope of the service tax has since been expanded continuously by subsequent Finance Acts. The Finance Act extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir.[17] (Source: National Information Centre) Industry Assistance The automobile industry has a defined its target in the Automotive Mission Plan as To emerge as the destination of choice in the world for design and manufacture of automobiles with output reaching a level of USD 145 billion accounting more than 10% of GDP and providing additional employment to 25 million people by 2016.[17] In order to achieve this plan interventions are required from both Industry and Indian Government. The Indian Government would play a key enabling role in facilitating infrastructure creation, promote the countrys capabilities, create a favourable and predictable business environment, attract investment and promote research & development. The role of Industry will primarily be in designing and manufacturing products of world-class quality standards, establishing cost competitiveness, improving productivity of both labour and capital, achieving scale and R&D enhancing capability and showcasing Indias products in potential markets. In order to achieve these goals the following key recommendations have been made in the Automotive Mission Plan to the Indian Government and Industry:

Manufacturing and export of small cars, multi-utility vehicles, two and three wheelers, tractors, components to be promoted Care to be taken of negative like and rules of the country with current negotiation of Free Trade Agreement and Regional Trade agreement with countries like Thailand, Singapore, Malaysia, China, Korea, Egypt, Gulf etc. Attractive Tariff Policy which may follow attractive investment. Specific measures will be taken for expansion of domestic market. Incremental investment of USD 35 to 40 billion to Automotive Industry during the next 10 years. National Road Safety Board to act as the coordinating body for promoting safety. Inspection and Certification system to be strengthened by encouraging public-private partnership. National level Automotive Institute for training on automobile at International Training Institutes (ITIs) and Automotive Training Institute (ATIs) to be set up.

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. [17] 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. [edit]Capital and Labour Intensity The level of Capital Intensity is high The level of Labour intensity in medium The motor vehicle manufacturing industry requires significant level of capital investment. Value is added through the automated manufacturing and assembly of costly components. Labour input is required in the manufacturing, assembly, and finishing processes. In order to achieve and retain competitiveness, vehicle manufacturing industry depends on its capacity and speed to innovate and upgrade. The most imperative indices for competitiveness in the industry are productivity in both labour and capital. Technology and Systems The level of technology change is high The rate of change in technology is medium Investment in technology by producers has been on the rise. The automobile industry in India has seen an enormous development in the engines which are being used. Carburettor engines have become obsolete and Multi Point Fuel Injection (MPFI) engines are the order of the days in patrol cars. The Diesel engines have also under gone a sea change from the time Rudolf Diesel invented it way back in the 1892. Today Common Rail Direct Injection (CRDI) is the order of the day. Multi Point Fuel injection (MPFI) The fuel injects were used to meet stricter emission norms as it keeps pollutants to bare minimum and drives the maximum performance out of a vehicle by squeezing out the maximum mileage even from the last drop of fuel that goes into the engine. MPFI system injects fuel into individual cylinders after receiving command from the on board engine management system computer or Engine Control Unit (ECU).

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 todays 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. [edit]Industry Volatility The level of volatility is medium. Over the past few years, the Motor Vehicle Manufacturing industry has become more volatile. This has been the result of fluctuations in metal prices and fuel prices, as well as changes in legislation and assistance packages. Indias increasing per capita disposable income and growth in exports is playing a major role in the rise and the competitiveness of the industry. As per the BRIC report Indias per capita disposable income from current year will rise by 106% in 2015. 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 Indias automotive volatility. [edit]Key Competitors [edit]Tata Motors Market Share: Commercial Vehicles 63.94%, Passenger Vehicles 16.45%[17] Tata Motors Limited is Indias largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. It is the leader in commercial vehicles and among the top three in passenger vehicles. Tata Motors has winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer with over 24,000 employees. Since first rolled out in 1954, Tata Motors as has produced and sold over 4 million vehicles in India.

Tata Motors is the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the United Kingdom, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two British brands which was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint by franchises and joint ventures assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa. With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's 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.[17] [edit]Maruti Suzuki India Market Share: Passenger Vehicles 46.07% Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti-800 and Alto, to stylish hatchback Ritz, A star, Swift, Wagon-R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara. Since inception in 1983, Maruti Suzuki India has produced and sold over 10 million vehicles in India and exported over 500,000 units to Europe and other countries. The companys revenue for the fiscal 2010-2011 stood over Rs 375,224 million and Profits After Tax at over Rs. 22,886 million.[145] [edit]Hyundai Motor India Market Share: Passenger Vehicles 14.15% Hyundai Motor India Limited is a wholly owned subsidiary of worlds fifth largest automobile company, Hyundai Motor Company, South Korea, and is the largest passenger car exporter. Hyundai Motor presently markets 49 variants of passenger cars across segments. These includes the Santro in the B segment, the i10, the premium hatchback i20 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Transform in the E segment.

Hyundai Motor, continuing its tradition of being the fastest growing passenger car manufacturer, registered total sales of 559,880 vehicles in the year 2009, an increase of 14.4% over 2008. In the domestic market it clocked a growth of 18.1% as compared to 2008 with 289,863 units, while overseas sales grew by 10.7%, with export of 270,017 units. Hyundai Motor currently exports cars to more than 110 countries across European Union, Africa, Middle East, Latin America and Asia. It has been the number one exporter of passenger car of the country for the sixth year in a row. In a little over a decade since Hyundai has been present in India, it has become the leading exporter of passenger cars with a market share of 66% of the total exports of passenger cars from India, making it a significant contributor to the Indian automobile industry. In 2009, in spite of a global slowdown, Hyundai Motor Indias exports grew by 10.7%.[17] In 2010 Hyundai plans to 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. [edit]Mahindra & Mahindra Market Share: Commercial Vehicles 10.01%, Passenger Vehicles 6.50%, Three Wheelers 1.31% Mahindra & Mahindra is mainly engaged in the Multi Utility Vehicle and Three Wheeler segments directly. The company competes in the Light Commercial Vehicle segment through its joint venture subsidiary Mahindra Navistar Automotives Limited and in the passenger car segment through another joint venture subsidiary Mahindra Renault. In the year 2009, on the domestic sales front, the Company along with its subsidiaries sold a total of 220,213 vehicles (including 44,533 three wheelers, 8,603 Light Commercial Vehicles through Mahindra Navistar Automotives and 13,423 cars through Mahindra Renault), recording a growth of 0.6% over the previous year.[17] The companys domestic Multi Utility Vehicle sales volumes increased by 3.3%, as against a decline of 7.4% for industry Multi Utility Vehicle sales. A record number of 153,653 Multi Utility Vehicles were sold in the domestic market in 2009 compared to 148,761 MUVs in the previous year. Hence, Mahindra & Mahindra further strengthened its domination of the domestic Multi Utility Vehicle sub-segment during the year, increasing its market share to 57.2% over the previous years market share of 51.3%.[17] Mahindra & Mahindra is expanding its footprint in the overseas market. In 2009 the Xylo was launched in South Africa. The company formed a new joint venture Mahindra Automotive Australia Pty. Limited, to focus on the Australian Market. [edit]Ashok Leyland Market Share: Commercial Vehicles 22%[17] Against the backdrop of the sharp slump in demand for commercial vehicles, during 2008-09, Ashok Leyland registered sales of 47,118 medium and heavy commercial vehicles (M&HCV), 37.5% less than in the previous year. This includes 16,049 M&HCV buses and 31,069 M&HCV trucks respectively, 8.7% and 46.3% less than in the previous year. The company lost 1.8% market share in the Indian medium and heavy commercial vehicle market during the financial year 2008-09,[17] mainly due to loss of sales in the truck segment. This was because the Eastern Region, where the Companys presence had been historically weak, was relatively stable, whilst the market declined sharply in other regions. While total industry volume of the medium and heavy duty buses declined by about 8.7%, the Companys market share grew marginally and Ashok Leyland retained its number one position in this segment. 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.[17]

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. [edit]Key Factors Key Sensitivity Consumer Sentiment Index Description: Customer Sentiment Index, 12 month rolling average of the Index; historical and forecast data and analysis. End customers are very important to ensure the survival of the Motor Vehicle Manufacturing industry. Economic downturns and other events can affect the expenditure decision of households. When customers are not happy or optimistic about the future of the economy, they will tend to postpone expenditure until times are better. In 2008-09, customer sentiment is expected to fall, which will have a brunt on the augmentation in demand of cars. Domestic Goods Price Metal Iron and Steel Description: The price of input such as steel. Steel is a major input used when manufacturing a motor vehicle. Rises in the price of steel puts cost pressures on manufacturers, which often leads to a fall in profitability. Over the past five years, the price of steel has been rising rapidly. These rises in price eventually pass from the manufacturers to the end customers. Import and Export Taxes (Duties) Motor Vehicle Tariffs Description: Tariff rates applicable to the industry High taffies may restrict flow of trade but may attract investment if domestic market is big enough and growing. Over the last few years Indias tariff policies and conditions of import of vehicles have served the purpose of attracting investments. Industry is keen that the existing tariff structure roadmap and conditions of import of vehicles are retained without any modifications because of certain systematic deficiencies which make manufacturing less cost 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.