The automobile industry currently contributes 22% of the manufacturing GDP and 7% of the country’s GDP. The Indian auto industry has left behind many other auto manufacturers with an annual production of 23.96 million vehicles in the financial year 2015 and is going to be the third largest in the world by 2020. With strong backward and forward linkages, the automobile sector has been identified as one of the sunrise industries in the manufacturing sector. Post 2000, important policies and programs like auto policy 2002 which allowed 100% FDI, Automotive Mission Plan 2006-2016, NATRIP, NEMMP and the very recent launch of “Make in India” program have changed the growth dynamics of the automobile sector. Therefore, the paper attempts to study the growth trends of automobile industry post 2000 in terms of CAGR, and percentage change over the years for three parameters, namely, production, sales and exports. The findings of the study clearly suggest an upward trend in growth during 2001 to 2014 in the two-wheeler and passenger vehicle segment in the Indian automobile industry.

The automobile industry played a significant role in the economic development of nations— witnessed in all major developed countries—USA, UK, Germany, France, Italy, Japan, South Korea and China. In an emerging economy like India, the manufacturing sector is expected to absorb a much larger workforce, relieving agriculture of the excessive burden and also contribute more to the national GDP. The automobile industry is one of the largest manufacturing industries in terms of revenue and is considered a bellwether of both consumer demand and the health of the overall economy. The auto industry of India has been recording tremendous growth over the years and has emerged as a major contributor to India’s GDP. This dynamic industry currently accounts for almost 7% of our GDP and employs about 30 mn people both directly and indirectly (SIAM Statistical Profile 2014-15). In fact, one of the major motives of the “Make in India” program is to generate more employment. India has become one of the most attractive destinations for foreign investments in the auto sector after the Make in India announcements. Automotive Mission Plan 2016-2026 aims at propelling Indian auto industry as the engine of the Make in India program. The Indian auto industry is set to become the third largest industry in the world with an annual production of 23.37 million vehicles in the Financial Year 2015 and is going to be the third largest in the world by 2020. Demographically and economically, India’s automotive industry is well-poised for growth, servicing both domestic and global markets. A predicted increase in India’s working-age population, rising prosperity, easier access to finance and increasing afford abilityis expected to boost the demand and growth segment-wise. With a CAGR of over 15% during the last 5-7 years (SIAM Report, 2015), the automotive sector is aptly described as the next sunrise sector of the Indian economy. The above-mentioned reasons are enough to spawn interest to know the growth patterns of the major segments in the automobile industry.

Business Strategy, Progress Card, Results and Discussion, Passenger Vehicles, CAGR (Cumulative Annual Growth rate), Growth Landscape, Indian Automobile Industry.