Automobiles represent freedom and economic growth. Automobiles allow people to
live, work and travel in a way that were unimaginable a few years ago.
Automobile provides access to market, to job, etc. every Automobile trip ends
with either an economic transaction and or some another benefit to the quality
innovation & technological advancement-
With the advent of E-Vehicles & alternative fuels such as Shell Gas, CNG
and others, Automobiles companies are increasing R&D expenditure to drive
the next phase of growth through use of renewable sources of energy which may
be solar, wind, etc.
of VFM Vehicles- Intense competition in the
matured/developed markets has forced automobile manufacturers to target
developing economies. But these developing economies have high demand for VFM (Value
for Money) products. In the automobile industry, VFM vehicles are fuel
efficient, high mileage vehicles because majority of consumers in these nations
prefer vehicles for commuting. On the other hand, developing nations need is of
vehicles for interstate travelling, and high-speed vehicles for long route with
high engine power.
Foreign Car Manufacturers: India has seen
significant amount of FDI from the foreign origin car manufacturers over the
last decade. In all, the automobile sector has seen a cumulative Foreign Direct
Investment (FDI) equity inflows of US$ 8.217 Billion (?38, 571 Crore) in this
sector during the period of 2000 to 2013 which is nearly 4.32 per cent of the
total FDI inflows in the country and the portion of Passenger Vehicle segment
accounts to more than 50 per cent of the total inflows in Automobile Industry
Passenger Vehicle Exports: The economy is
adversely affected due to a falling rupee but it is proving beneficial as far
as the exports are concerned. This is being attributed as one of the reasons
for growing exports in the sector. The exports of passenger vehicles from India
has grown with a CAGR of more than 20 per cent over the last five years and
despite the slowdown in the economy during the last one year the exports have
still managed a growth of 9 per cent in 2013 with the manufacturers realizing
the slowdown in European markets and consequently developing the new ones. In
recent years India has become the export hub for several global automobile manufacturers.
Low Cost and Cheap
Labour: Cost competitiveness remains one of the
key characteristic of India with the availability of low cost labour and
inexpensive manufacturing capabilities it is a key attraction for the
businesses. In particular, India’s attractive labour costs can explain the
phenomenal growth of its rapidly 44 growing manufacturing sector including the
automobile. Although India has witnessed some increases in its labour cost, but
it remains a highly attractive destination for investors who struggle to find
the same mixture of low cost and high quality.
Growth shifting to
Asian markets- Although American & European
market is the pulse of this industry, but the focus of shifting to developing
markets like China, India & Other Asian Nations because of the increase of
disposable income, changing lifestyle & stable economic conditions.