Indian automobile industry has metamorphosed into one of the growth drivers of Indian economy 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. De-licensing in 1991 has put the Indian automobile industry on a new growth trajectory, attracting foreign auto giants to set up their production facilities in the country to take advantage of various benefits it offers. This took the Indian automobile production from 5.3 Million Units in 2001-02 to 10.8 Million Units in 2007-08. The automobile industry in India happens to be the ninth largest in the world. Following Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles. Several Indian automobile manufacturers have spread their operations globally

The Indian automobile market is currently dominated by two-wheeler segment but in future,. Also, as India has low vehicle presence (with passenger car stock of only around 11 per 1,000 population in 2008), it possesses substantial potential for growth. Last year has been a great ride for the auto sector. The recent launch of Tata Nano has brought about a new revolution in the countrys small car segment. Seeing the good initial response from consumers, many other players in the industry are chalking out their plans to launch cars in this segment in the next few years. Total sales of all auto-mobile companies are up 44.4% while two-wheeler sales grew by 43.43%.

Few of the facts and figures of Indian automobile sector are given below: Segment of Automobile Industry

Passenger Vehicles Commercial Vehicles Three Wheeler Vehicles Two Wheeler Vehicles

15.96 % 3.95 % 3.6 % 76.49 %

Automobile Production Trends

Category Passenger Vehicles Commercial Vehicles Three Wheeler Vehicles Two Wheeler Vehicles Grand Total

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

723,330 203,697

989,560 275,040

1,209,876 353,703

1,309,300 391,803

1,545,223 519,982

1,777,583 549,006

1,838,697 417,126

276,719

356,223

374,445

434,423

556,126

500,660

501,030

5,076,221 6,279,697

5,622,741 7,243,564

6,529,829 8,467,853,

7,608,697 9,743,503

8,466,666

8,026,681

8,418,626

11,087,997 10,853,930 11,175,479

MARUTI SUZUKI HYUNDAI TATA MAHINDRA GM CHEVROLET HONDA TOYOTA FORD FIAT SKODA MITSUBISHI

HERO HONDA TVS HONDA YAMAHA BAJAJ LML ROYAL ENFIELD

TATA MOTORS. ASHOK LEYLAND. EICHER MOTORS. BAJAJ. MAHINDRA AND MAHINDRA. VOLVO FORCE

Global Standing Fifth Largest commercial vehicle market in the world Fourth Largest passenger vehicle market in Asia Second Largest two-wheeler market in world Largest three-wheeler market in the world Fourth Largest tractor market in the world

India has emerged as one of the world's largest manufacturers of small cars. 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. Similarly, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011. 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. In 2009 India surpassed China as Asia's fourth largest exporter of cars.

The automobile industry in India is growing by 18 percent per year. The automobile sector in India was opened up to foreign investments in the year 1991. 100% Foreign Direct Investment (FDI) is allowed in the automobile industry in India. The production level of the automobile sector has increased from 2 million in 1991 to 9.7 million in 2006 after the participation of global players in the sector.

Import of components is allowed without any restrictions and also encouraged.

4 OUT OF 30 COMPANIES ARE THE AUTO COMPANIES WHICH ARE LISTED IN BSE. HERO HONDA (40,410 crs) M&M (36,047 crs) MARUTI SUZUKI (39,735 crs) TATA MOTORS (46,121 crs) Hence, any fluctuation in automobile industry is of great influence for the BSE.

The industry has emerged as a key contributor to the Indian economy. Its has an annual contribution of 4% to the GDP and also accounting for about 5% of the total industrial output, this segment clearly stands out as a significant contributor to the economic growth.

PM RELEASED AUTOMOBILE PLAN 2006 2016 TO GIVE A ROAD MAP TO INDIAN AUTOMOBILE INDUSTRY. INCREASE TURNOVER TO $145 BILLION BY 2016. INCREASE EXPORT REVENUE TO $35 BILLION BY 2016. PROVIDE EMPLOYMENT TO ADDITIONAL 25 MILLION PEOPLE BY 2016. BY 2016, AUTO SECTOR IS EXPECTED TO CONTRIBUTE 10% OF THE COUNTRYS GDP & 30-35% OF THE INDUSTRY.

Tata motors acquired Jaguar- Land rover in 2008. Mahindra & Mahindra Acquired Sangyong motors from South Korea. Tata motors has already acquired Daewoo commercial vehicle plant in South korea.