Automobile
industry is one of the building blocks of the world's most
influential economies such as the US and Japan. The automobile
industry, a key sector, is all set to play a similar role
in India. Today, the industry is among the most vibrant, modern
and growing markets in the world. India is the world's second
biggest two-wheeler market after China, the fourth largest
commercial vehicle producer, the eleventh largest passenger
car producer, and the largest tractor and three-wheeler producer.
The auto industry accounts for about 5.2% of India's GDP currently,
and the share of this sector is expected to rise to 10% by
2016, providing employment to an additional 25 million people.
For every job created directly by the automotive industry,
a further seven jobs are created indirectly. India's robust
GDP growth is pushing more and more people to purchase their
own private vehicles including cars and two-wheelers.The
delicensing and the subsequent opening up of the sector for
100% FDI through automatic route has pushed the country to
become a center of attraction for most of the global automobile
players who are shifting their base to India.
These players
include the US automakers General Motors and Ford, Germany's
BMW and DaimlerChrysler AG, France's Renault, Japan's Suzuki,
Toyota and Honda, and South Korea's Hyundai. Backed by strong
engineering skills and low costs, India is an attractive outsourcing
destination for global auto companies. Domestic auto ancillary
companies are witnessing a boom as sourcing parts from India
is 10-20% cheaper for the US automakers and about 50% cheaper
for their European counterparts. The production of vehicles
jumped from 2 million in 1991 to 10.9 million in 2006. |
