Automotive industry in India

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The second generation Tata Indica Vista. The Indica is the first passenger car
indigenously developed in India.

Mahindra Scorpio, one of India's best selling indigenously developed SUV.

Foreign carmakers have built plants in India.

The Automotive industry in India is one of the largest in the world and one of the fastest
growing globally. India manufactures over 11 million vehicles(including 2 wheeled and 4
wheeled) and exports about 1.5 million every year.[1] It is the world's second largest
manufacturer of motorcycles, with annual sales exceeding 8.5 million in 2009.[2] India's
passenger car and commercial vehicle manufacturing industry is the seventh largest in the
world, with an annual production of more than 2.6 million units in 2009.[3] In 2009, India
emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea,
and Thailand.[4]
As of 2009, India is home to 40 million passenger vehicles and more than 2.6 million cars
were sold in India in 2009 (an increase of 26%), making the country the second fastest
growing automobile market in the world.[5][6] 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.[7] By 2050, the country is expected to
top the world in car volumes with approximately 611 million vehicles on the nation's
roads.[8]

A chunk of India's car manufacturing industry is based in and around Chennai, also
known as the "Detroit of India"[9] with the India operations of BMW, Ford, Hyundai and
Nissan headquartered in the city. Chennai accounts for 60 per cent of the country's
automotive exports.[10] Gurgaon and Manesar near New Delhi are hubs where all of the
Maruti Suzuki cars in India are manufactured.[11] The Chakan corridor near Pune,
Maharashtra is another vehicular production hub with companies like General Motors,
Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Fiat and
Force Motors[12][13] having assembly plants in the area. Ahmedabad with the Tata Nano
plant, Halol with General Motors in Gujarat, Aurangabad with Audi in Maharashtra and
Kolkatta with Hindustan Motors in West Bengal are some of the other automotive
manufacturing regions around the country.[14][15][16]

Contents
[hide]

• 1 History
• 2 Supply Chain of Automobile Industry
• 3 Production statistics
• 4 Emission norms
• 5 Exports
• 6 Passenger vehicles in India
o 6.1 Indian automotive companies
o 6.2 Joint Venture automotive companies in India
o 6.3 Foreign automotive companies in India
 6.3.1 Vehicles manufactured or assembled in India
 6.3.2 Vehicles imported to India
• 7 Commercial vehicle manufacturers in India
o 7.1 Indian brands
o 7.2 Joint Venture Brands
o 7.3 Foreign brands
• 8 Electric car manufacturers in India
• 9 Further reading

• 10 Footnotes

[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.[17] The company soon branched out
into the manufacture of light commercial vehicles (LCVs) and agricultural tractors.[18]

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.
[19]

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.[19]

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.[20] In February 2009, monthly sales of passenger
cars in India exceeded 100,000 units[21] and has since grown rapidly to a record monthly
high of 182,992 units in October 2009.[22] 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 [23]) this progression
is unlikely to stop in the coming decade.[24] Congestion of Indian roads, more than market
demand, will likely be the limiting factor.[25]

SIAM is the apex industry body representing all the vehicle manufacturers, home-grown
and international, in India.[26]

[edit] Supply Chain of Automobile Industry

Supply Chain of Indian 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.[1]

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] Production 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.[27]

Total
Car % % %
Year Commercial Vehicles
Production Change Change Change
Prodn.
2009 2,166,238 17.34 466,456 -4.08 2,632,694 11.40
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

[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] Exports

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.[28] India's automobile exports are expected to cross $12
billion by 2014.[29]

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.[30]

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.[31] Similarly,
General Motors announced its plans to export about 50,000 cars manufactured in India by
2011.[32]

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.[33] The company said that the plant was a part of its
plan to make India the hub for its global production business.[34] Fiat Motors also
announced that it would source more than US$1 billion worth auto components from
India.[35]

In July 2010, The Economic Times reported that PSA Peugeot Citroen 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.[36] 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.[4]

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 the U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and
small SUV models in the U.S. market. Bajaj Auto is designing a low-cost car for the
Renault Nissan Automotive India, which will market the product worldwide. Renault
Nissan may also join domestic commercial vehicle manufacturer Ashok Leyland in
another small car project.[37] 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.[37]

[edit] Passenger vehicles in India

See also: List of cars available in India and 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 110% import duty, car-makers such as Alfa Romeo,
[38]
Maserati,[39] Ferrari,[40] McLaren,[41] Aston Martin,[42] Cadillac,[43] Chrysler,[44] SSC,[45]
MINI,[46] Daihatsu,[47] Lexus,[48] Infiniti,[49] Acura,[50] Koenigsegg,[51] Saab,[52] Spyker,[53]
Renault,[54] Peugeot-Citroen,[55] Mazda,[56] SsangYong,[57] Kia[58] and Proton[59] are in
varying stages of official introduction to the Indian automobile market.

[edit] Indian automotive companies

Tata Indigo Manza.

• Chinkara Motors[60]: Beachster, Hammer, Roadster 1.8S, Rockster, Jeepster,

Sailster

• Hindustan Motors[61]: Ambassador

• ICML[62]: Rhino Rx

• Mahindra[63]: Major, Xylo, Scorpio, Bolero, Thar, Genio

• Premier Automobiles Limited[64]: Sigma, RiO

• San Motors[65]: Storm

• Tata Motors[66]: Nano, Indica, Indica Vista, Indigo, Indigo Manza, Indigo CS,
Sumo, Venture, Safari, Xenon, Aria

[edit] Joint Venture automotive companies in India

• Maruti Suzuki[67]: 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire,
SX4, Omni, Versa, Eeco, Gypsy, Grand Vitara

[edit] Foreign automotive companies in India

[edit] Vehicles manufactured or assembled in India

Manufactured only in Chennai, India, the i10 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.[68]

• BMW India[69]: 1 Series, 3 Series, 5 Series, X1.

• Fiat India[70] (in collaboration with Tata Motors): Grande Punto, Linea, Palio
Stile.

• Ford India[71]: Ford Figo, Ikon, Fiesta, Endeavour.

• General Motors India[72]

• Chevrolet (CSPIL)[73]: Spark, Beat, Aveo U-VA, Aveo, Optra,

Cruze, Tavera.

• Honda Siel[74]: Jazz, City, Civic, Accord.

• Hyundai Motor India[75]: Santro, i10, i20, Accent, Verna Transform, Sonata
Transform.

• Mahindra Renault[76]: Logan

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

• Mitsubishi[77] (in collaboration with Hindustan Motors):[78] Lancer, Lancer Cedia,

Pajero

• Nissan Motor India[79]: Micra.

• Toyota Kirloskar[80]: Etios, Corolla, Innova, Camry.

• Volkswagen India[81][82]: Polo, Vento, Jetta, Passat.

• Audi India: A4, A6.

• Škoda Auto India[83][84]: Fabia, Octavia, Laura, Superb, Yeti.

Opel was present in India until 2006. As of 2010, Opel only provides spare parts and vehicle servicing to existing Opel vehicle owners.
[edit] Vehicles imported to India

• Audi[85]: A8, S4, S6, S8, TT, R8, Q5, Q7.

• Bentley[86][87]: Arnage, Azure, Brooklands, Continental GT, Continental Flying
Spur, Mulsanne.
• BMW[88]: 5 Series GT, 6 Series, 7 Series, X3, X5, X6, X6 M, M3, M5, M6 and
Z4.
• Bugatti[89]: Veyron
• Chevrolet: Captiva.
• Fiat[70]: 500, Bravo.
• General Motors[72]: Hummer H2, Hummer H3.
• Honda[90][91]: Civic Hybrid, CR-V.
• Hyundai[75]: Santa Fe.
• Jaguar[92]: XF, XJ, XK.
• Lamborghini[93]: Gallardo, Murciélago.
• Land Rover[94]: Range Rover, Range Rover Sport, Discovery 4, Freelander 2.
• Maybach[95]: 57 and 62.
• Mercedes-Benz[96]: 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[97]: Teana, X-Trail, 370Z, GT-R.
• Porsche[98][99]: 911, Boxster, Panamera, Cayman, Cayenne, Carrera GT.
• Rolls Royce[100]: Ghost, Phantom, Phantom Coupé, Phantom Drophead Coupé.
• Škoda[83]: Yeti, Superb.
• Suzuki: Grand Vitara, Kizashi.
• Toyota[80]: Land Cruiser, Land Cruiser Prado, Fortuner*, Prius.
• Volkswagen[101]: Beetle, Tiguan, Touareg, Phaeton.
• Volvo[102]: S60, S80, XC60, XC90.
* Toyota Fortuner is imported from Toyota Motor Thailand Company Limited as CKD

[edit] Commercial vehicle manufacturers in India

[edit] Indian brands

• Force[103]
• Hindustan Motors[104]
• Premier[64]
• Tata[105]
• AMW[106]
• Eicher Motors[107]

[edit] Joint Venture Brands

• VE Commercial Vehicles Limited[108] - VE Commercial Vehicles limited - A JV

between Volvo Groups & Eicher Motors Limited.
 • Ashok Leyland[109] - originally a JV between Ashok Motors and Leyland Motors,
now 51% owned by Hinduja Group
• Mahindra Navistar[110] - a 51:49 JV between Mahindra Group and Navistar
International
• Swaraj Mazda[111] - originally a JV between Punjab Tractors and Mazda, now
53.5% owned by Sumitomo Group
• Kamaz Vectra[112] - A JV between Russia's KaMAZ and the Vectra Group

[edit] Foreign brands

• Volvo[113]
• Tatra[114]
• MAN[115] - as a JV with Force Motors, makes MAN Trucks in India
• Mercedes-Benz[116] sells luxury buses in India
• Daimler AG[117] - manufactures BharatBenz, a brand of trucks based on the Fuso
and the Mercedes Benz truck platforms, which Daimler AG owns
• Scania[118]
• Iveco[119]
• Hino[120]
• Isuzu[121]
• Piaggio[122]
• Caterpillar Inc.[123]

[edit] Electric car manufacturers in India

• Ajanta Group[124]
• Mahindra[125]
• Hero Electric[126]
• REVA
• Tara International[127]
• Tata[128]

[edit] Further reading

• Kamala, T.N. & Doreswamy, A.G. (2007). Strategies for Enhancing
Competitiveness of Indian Auto Component Industries. Indian Institute of
Management Kozhikode.
• Tiku, Pran (2008). Six Sizzling Markets: How to Profit from Investing in Brazil,
Russia, India, China, South Korea, and Mexico. John Wiley & Sons.
ISBN 9780470178881.