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Auto Industry Performance In India

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Note: All Statistical Figures as on 21st May 2006)

Indian Automotive Industry

The Indian automobile industry has come a long way since in the first car ran on the streets of Bombay (now Mumbai) in 1898. The initial years of the industry were characterized by unfavorable government policies. The real big change as we see in the industry today, started to take place with the liberalization policies that the government initiated in the 1991. The liberalization policies had a salutary impact on the Indian economy and the automobile industry in particular.

The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. The industry directly employs close to around 0.2 million people and indirectly employs around 10 million people. The prospects of the industry also has a bearing on the auto-component industry which is also a major sector in the Indian economy directly employing 0.25 million people.

All is not well with the automobile industry the world over currently with the slowdown that has gripped most of the major economies of the world. The incidents of 9/11 have also contributed to an already ailing global economy. The gap between the manufacturing capacity volume and the assembly volume is growing by the day and has the worried the manufacturers. This state of affairs has triggered a lot of cutthroat competition and consolidation in the industry. Cost reduction initiatives have come to be the in thing in the global industry today. Towards this direction, many automobile factories are being closed down.

The Indian automobile industry is a stark contrast to the global industry due to many of the characteristics, which are peculiar to India. The Indian automobile industry is very small in comparison to the global industry. Except for two wheelers and tractors segments, the Indian industry cannot boast of big volumes vis-a-vis global numbers.

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Automobile Industry Performance during 2004 - 05

The Automobile Industry performance in the year 2004-05 showed encouraging results for all segments of the automobile industry. The industry registered a growth of around 16% in numbers over the year 2003-04.

Despite the speculations of slow growth from different quarters because of unprecedented rise in input prices, the passenger vehicles posted a growth of 18% in the year 2004-05 over the year 2003-04. Within the passenger vehicle segment, passenger cars and utility vehicles have grown by 18% and 20% respectively while MPVs have grown at the rate of over 9%. The commercial vehicle segment clocked a growth rate of 22%. M&HCV segment has grown by 23% whereas LCVs grew by over 21%.

Two Wheeler segment as a whole during the year 2004-05 grew by over 15%. Backed by Government's initiative on rural roads and better connectivity with major towns and cities, improved agricultural performance, upward trend of purchasing power in the hands of rural people, the two wheeler industry was able to achieve the record performance of crossing 6 million two wheelers with exact sales standing at 6,208,860 during the year 2004-05.


The performance of the automobile industry in exports is also encouraging.

Commercial vehicle exports increased to an all time high of touching 30,000 growing at a rate of 72% Passenger vehicle exports grew by 29% to 166,413 units.

The Two Wheelers also crossed three hundred thousand mark for the first time clocking around 366,724 numbers and recorded a growth rate of plus 38% over the last year


Turnover of Automobile Manufacturers

Year (Rs.In Million)

1999-00 422,933

2000-01 492,024

2001-02 499,136

2002-03 595,184

2003-04 661,769

2004-05 835,851

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Market Share for 2005-06

CVs 3.94

Total Passenger Vehicles 12.83

Total Two Wheelers 79.19

Three Wheelers 4.04

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Automobile Production Trends

(In Nos)

Category 2001-02 2002-03 2003-04 2004-05 2005-06

M&HCVs 96752 120502 166123 214807 219297

LCVs 65756 83195 108917 138896 171781

Total CVs 162508 203697 275040 353703 391078

Passenger Cars 500301 557410 782562 960487 1045881

Utility Vehicles 105667 114479 146325 182018 196371

MPVs 63751 51441 60673 67371 66661

Total Passenger Vehicels 669719 723330 989560 1209876 1308913

Scooters 937506 848434 935279 987498 1020013

Motorcycles 2906323 3876175 4355168 5193894 6201214

Mopeds 427498 351612 332294 348437 379574

Total Two Wheelers 4271327 5076221 5622741 6529829 7600801

Three Wheelers 212748 276719 356223 374445 434424

Grand Total 5316302 6279967 7243564 8467853 9735216




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