A Tata Motors next generation concept car 2015 Geneva Motor Show
The automotive industry in India is one of the largest in the world with an annual production of 23.96 million vehicles in FY (fiscal year) 2015-16, following a growth of 2.57 per cent over the last year. The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP). The Two Wheelers segment, with 81 per cent market share, is the leader of the Indian Automobile market, owing to a growing middle class and a young population. Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector. The overall Passenger Vehicle (PV) segment has 13 per cent market share.
India is also a prominent auto exporter and has strong export growth expectations for the near future. In FY 2014-15, automobile exports grew by 15 per cent over the last year. In addition, several initiatives by the Government of India and the major automobile players in the Indian market are expected to make India a leader in the Two Wheeler (2W) and Four Wheeler (4W) market in the world by 2020.
Auto Expo 2014, Noida
The industry produced a total 14.25 million vehicles--including passenger vehicles (PV), commercial vehicles (CV), and three- and two wheelers (3W and 2W)--in April-October 2015, as against 13.83 in April-October 2014, registering a marginal growth of 3.07 per cent, year-to-year.
The sales of PVs grew by 8.51 per cent in April-October 2015 over the same period in the previous year. The overall CVs segment registered a growth of 8.02 per cent in April-October 2015 as compared to same period last year. Medium- and heavy commercial vehicles (MCV and HCV) registered very strong growth of 32.3 per cent, while sales of light commercial vehicles (LCV) declined by 5.24 per cent during April-October 2015, year-to-year.
In April-October 2015, overall automobile exports grew by 5.78 per cent. PVs, CVs, 3Ws, and 2Ws registered growth of 6.34 per cent, 17.95 per cent, 18.59 per cent, and 3.22 per cent, respectively, in April-October 2015, over April-October 2014.
Interior of Tata ConnectNext EV concept car at 2015 Geneva Motor Show
In order to keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry during the last few months. The industry has attracted foreign direct investment (FDI) worth US$17.4 billion during the period April 2000 to June 2017, according to data released by Department of Industrial Policy and Promotion (DIPP).
Some of the major investments and developments in the automobile sector in India are as follows:
Global auto maker Ford plans to manufacture in India two families of engines by 2017, a 2.2 litre diesel engine code-named Panther, and a 1.2 litre petrol engine code-named Dragon, which are expected to power 270,000 Ford vehicles globally.
The world's largest air bag suppliers Autoliv Inc, Takata Corp, TRW Automotive Inc and Toyoda Gosei Co are setting up plants and increasing capacity in India.
General Motors plans to invest US$1 billion in India by 2020, mainly to increase the capacity at the Talegaon plant in Maharashtra from 130,000 units a year to 220,000 by 2025.
US-based car maker Chrysler has planned to invest Rs 3,500 crore (US$525 million) in Maharashtra, to manufacture Jeep Grand Cherokee model.
Mercedes Benz has decided to manufacture the GLA entry SUV in India. The company has doubled its India assembly capacity to 20,000 units per annum.
Germany-based luxury car maker Bayerische Motoren Werke AG's (BMW) local unit has announced to procure components from seven India-based auto parts makers.
Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares in France-based Peugeot Motorcycles (PMTC).
The Government of India encourages foreign investment in the automobile sector and allows 100 per cent FDI under the automatic route.
Some of the major initiatives taken by the Government of India are:
The Government of India aims to make automobile manufacturing the main driver of "Make in India" initiative, as it expects the passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.
In the Union budget of 2015-16, the Government has announced plans to provide credit of Rs 850,000 crore (US$127.5 billion) to farmers, which is expected to boost sales in the tractors segment.
The government plans to promote eco-friendly cars in the country--i.e. CNG-based vehicles, hybrid vehicles, and electric vehicles--and also to make mandatory 5 per cent ethanol blending in petrol.
The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission 2020, to encourage the progressive introduction of reliable, affordable, and efficient electric and hybrid vehicles into the country.
The Automobile Mission Plan (AMP) for the period 2006-2016, designed by the government is aimed at accelerating and sustaining growth in this sector. Also, the well-established Regulatory Framework under the Ministry of Shipping, Road Transport and Highways, plays a part in providing a boost to this sector.
Indian Royalty were one of the largest buyers of luxury cars during pre-Independence British India
Kolkata street traffic in 1945
In 1897, the first car ran on an Indian road. Through the 1930s, cars were imports only, and in small numbers.
An embryonic automotive industry emerged in India in the 1940s. Hindustan Motors was launched in 1942, long-time competitor Premier in 1944, building Chrysler, Dodge, and Fiat products respectively.Mahindra & Mahindra was established by two brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles. Following 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. In 1953, an import substitution programme was launched, and the import of fully built-up cars began to be restricted.
The 1949 Hindustan 10 built by Hindustan Motors under license from Morris Motors, UK
The Hindustan Ambassador dominated India's automotive market from the 1960s until the mid-1980s and was manufactured till 2014
Fiat 1100D, built under license by Premier Automobiles later re-christened 'Premier Padmini' was the Ambassador's only true competitor
The 1952 Tariff Commission
In 1952, the government appointed the first Tariff Commission, one of whose purposes was to come out with a feasibility plan for the indigenization of the Indian automobile industry. In 1953, the commission submitted their report, which recommended categorizing existing Indian car companies according to their manufacturing infrastructure, with licensed capacity to manufacture a certain number of vehicles, with capacity increases allowable, as per demands, in the future. The Tariff Commission recommendations were implemented with new policies that would eventually exclude companies that only imported parts for assembly, as well as those with no Indian partner. In 1954, following the Tariff Commission implementation, General Motors, Ford, and Rootes Group, which had assembly-only plants in Mumbai, decided to move out of India.
The Tariff commission policies, including similar restrictions that applied to other industries, came to be known as the "license raj", which proved to be the greatest undoing of the Indian automotive industry, where bureaucratic red tape ended up causing demand to outstrip supply, with month-long waiting periods for cars, scooters, and motorcycles.
Hindustan Motors, Calcutta - technical collaboration with Morris Motors to manufacture Morris Oxford models that would later become HM Ambassador.
Addison's - An Amalgamations Group company, was the agent for Nuffield's Morris, Wolseley, and Riley cars, and Chrysler's Plymouth, Dodge, and De Soto cars and trucks. The first Morris Minor assembled in India and the first car assembled in Madras was driven out from Addison's twin-plants on Smith Road by Anantharamakrishnan on November 15, 1950.
Vehicle Factory Jabalpur - started manufacturing Jonga Light Utility Vehicles and Vahan 1 Ton (Nissan 4W73 Carriers) in India, under license from Nissan of Japan. They were the main troop carriers of the Indian Armed Forces and much powerful than any other vehicle of their class.
Tata Motors, Poona, then known as TELCO - technical collaboration with Mercedes Benz to manufacture medium to heavy commercial vehicles both Bus and Trucks.
Ashok Motors, later Ashok Leyland, Madras - technical collaboration with Leyland Motors to manufacture medium to heavy commercial vehicles both Bus and Trucks. Ashok Motors also discontinued its Austin venture formed in 1948 to sell Austin A40 and retooled the factory to make trucks and buses.
However, growth was relatively slow in the 1950s and 1960s, due to nationalisation and the license raj, hampering the growth of Indian private sector.
The beginning of the 1970s saw some growth potential and most of the collaboration license agreements came to an end but with option to continue manufacturing with renewed branding. Cars were still meant for the elite and Jeeps were largely used by government organizations and some rural belts. In commercial vehicle segments some developments were made by the end of the decade to cater improved goods movements. The two-wheeler segment remained unchanged except for to increased sales in urban among middle class. But more fillip was target towards farm tractors as India was embarking on a new Green Revolution. More Russian and eastern bloc imports were done to increase the demand.
But after 1970, with restrictions on the import of vehicles set, the automotive industry started to grow; but the growth was mainly driven by tractors, commercial vehicles and scooters. Cars still remained a major luxury item. In the 1970s, price controls were finally lifted, inserting a competitive element into the automobile market. However, by the 1980s, the automobile market was still dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers. During the eighties, a few competitors began to arrive on the scene.
The OPEC oil crisis saw increase need to installing or redesign some vehicle to fit diesel engines on medium commercial vehicle. Until the early 1970s Mahindra Jeeps were on Petrol and Premier commercial vehicles had Petrol model options. The Defence sector too had most trucks on Pertol engines.
1984 to 1992
First generation Maruti 800 launched in 1984
From the end of the 1970s to the beginning of the 1980s saw no new models but the country continued with 2 decade old designs forcing government to encourage and let more manufacturers into fray.
In 1984, the then Prime Minister of India, Indira Gandhi established the Ordnance Factory Medak, near Hyderabad. It started manufacturing Infantry Combat Vehicles christened as Sarath, the backbone of India's mechanised infantry. OFMK is still the only manufacturing facility of ICVs in India.
To manufacture the high-power engines used in ICVs and main battle tanks, Engine Factory Avadi, near Chennai was set in 1987.
In 1986, to promote the auto industry, the government established the Delhi Auto Expo. The 1986 Expo was a showcase for how the Indian automotive industry was absorbing new technologies, promoting indigenous research and development, and adapting these technologies for the rugged conditions of India. The nine-day show was attended by then Prime Minister Rajiv Gandhi.
Eventually multinational automakers, such as, Suzuki and Toyota of Japan and Hyundai of South Korea, were allowed to invest in the Indian market, furthering the establishment of an automotive industry in India. Maruti Suzuki was the first, and the most successful of these new entries, and in part the result of government policies to promote the automotive industry beginning in the 1980s. As India began to liberalise its automobile market in 1991, a number of foreign firms also initiated joint ventures with existing Indian companies. The variety of options available to the consumer began to multiply in the nineties, whereas before there had usually only been one option in each price class. By 2000, there were 12 large automotive companies in the Indian market, most of them offshoots of global companies.
Slow export growth
Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets and neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe (Hungary). After some growth in the mid-nineties, exports once again began to drop as the outmoded platforms provided to Indian manufacturers by multinationals were not competitive. This was not to last, and today India manufactures low-priced cars for markets across the globe. As of 18 March 2013, global brands such as Proton Holdings, PSA Group, Kia, Mazda, Chrysler, Dodge and Geely Holding Group were shelving plans for India due to the competitiveness of the market, as well as the global economic crisis.
India levies an import tax of 125% on foreign imported cars, while the import tax on components such as gearboxes, airbags, drive axles, is 10%. Therefore, the taxes encourage cars to be assembled in India rather than be imported as completely built units.
India's automobile exports have grown consistently and reached $4.5 billion in 2009, with the United Kingdom being India's largest export market, followed by Italy, Germany, Netherlands, and South Africa.
In 2008, South Korean multinational 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. Similarly, US automobile company, General Motors announced its plans to export about 50,000 cars manufactured in India by 2011.
In September 2009, Ford Motors announced its plans to set up 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. The company said that the plant was a part of its plan to make India the hub for its global production business.Fiat Motors announced that it would source more than US$1 billion worth auto components from India.
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).
In July 2010, The Economic Times reported that PSA Peugeot Citroën was planning to re-enter the Indian market and open a production plant in Andhra Pradesh that would have an annual capacity of 100,000 vehicles, investing EUR 700M in the operation. PSA's intention to utilise this production facility for export purposes however remains unclear as of December 2010.
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 Maruti Exports' shipments to Suzuki's other markets, 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 preparing to sell electric cars in Europe in 2010. The firm is planning to sell an electric version of its affordable car the Tata Nano in Europe and in 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 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. While the possibilities for the Indian automobile industry are impressive, there are challenges that could thwart future growth. 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.
Top 10 export destinations
India exported $14.5 billion worth of automobiles in 2014. The 10 countries below imported 47.8% of that total.
Hyundai, Renault, Nissan, Datsun, Mitsubishi, Ford, Fiat, Honda, Toyota, Volkswagen, Skoda, Audi, Jaguar, Land Rover, Mercedes-Benz, BMW and MINI are the foreign automotive companies that manufacture and market their products in India.
Vehicles currently manufactured or assembled in India
Manufactured only in Chennai, India, the i10 is one of Hyundai's best selling globally exported cars.
Electric vehicle and Hybrid vehicle (xEV) industry
During April 2012, the Indian government planned to unveil the road map for the development of domestic electric and hybrid vehicles (xEV) in the country. A discussion between the various stakeholders, including Government, industry, and academia, was expected to take place during 23-24 February. The final contours of the policy would have been formed after this set of discussions. Ministries such as Petroleum, Finance, Road Transport, and Power are involved in developing a broad framework for the sector. Along with these ministries, auto industry executives, such as Anand Mahindra (Vice Chairman and Managing Director, Mahindra & Mahindra) and Vikram Kirloskar (Vice-Chairman, Toyota Kirloskar), were involved in this task. The Government has also proposed to set up a Rs 740 crore research and development fund for the sector in the 12th five-year plan during 2012-17. The idea is to reduce the high cost of key imported components such as the battery and electric motor, and to develop such capabilities locally. In the year 2017, An Amaravati, Andhra Pradesh based Electric Vehicles manufacturing company called AVERA New & Renewable Energy started electric scooters manufacturing and are ready to launch their two models of scooters by the end of December 2018.
Hero Motors is a former moped and scooter manufacturer based in Delhi, India. It is a part of multinational company Hero Group, which also currently owns Hero Motocorp (formerly Hero Honda) and Hero Cycles, among others. Hero Motors was started in the 1960s to manufacture 50cc two-stroke mopeds but gradually diversified into making larger mopeds, mokicks and scooters in the 1980s and the 1990s. Noteworthy collaborators and technical partners were Puch of Austria and Malaguti of Italy. Due to tightening emission regulations and poor sales, Hero motors have discontinued the manufacture of all gasoline powered vehicles and transformed itself into an electric two-wheeler and auto parts manufacturer.
Ideal Jawa - motorcycle company based in Mysore, sold licensed Jawa and ?Z motorcycles beginning in 1960 under the brand name Jawa and later Yezdi.
Standard - produced by Standard Motor Products in Madras from 1949 to 1988. Indian Standards were variations of vehicles made in the U.K. by Standard-Triumph.Standard Motor Products of India Ltd. (SMPI) was incorporated in 1948, and their first product was the Vanguard, which began to be assembled in 1949. The company was dissolved in 2006 and the old plant torn down.
Automotive Research Association of India - Standards
The Government of India felt the need for a permanent agency to expedite the publication of standards and development of test facilities in parallel with the work of the preparation of the standards - as the development of improved safety critical parts could be undertaken only after the publication of the standard and commissioning of test facilities. The Ministry of Surface Transport (MoST) constituted a permanent Automotive Industry Standards Committee (AISC) . The Standards prepared by AISC will be approved by the permanent CMVR Technical Standing Committee (CTSC). After approval, the Automotive Research Association of India (ARAI) will publish this standard.
Intelligent Transport Systems (ITS) are globally proven systems to optimize the utilization of existing transport infrastructure and improve transportation systems in terms of efficiency, quality, comfort and safety. Having realized the potential of ITS, Government bodies and other organizations in India are presently working towards implementing various components of ITS across the country.
The first step taken for creation and implementation of ITS was holding a National Workshop titled "User Requirements for Interactive ITS Architecture", which was conducted as a collaboration between SIAM and ASRTU on 26th & 27th February 2015. This was primarily focused on ITS in Public Bus Transportation. Nonetheless, the workshop helped to create the outline for "National Intelligent Transport System Architecture and Policy for Public Transport (Bus)", which was submitted by ASRTU and SIAM to the government
In the 44th & 45th CMVR-TSC, Chairman had directed - standardization activities to be initiated on Intelligent Transportation Systems (ITS) - Vehicle Location Tracking, Camera Surveillance System and Emergency Request Button. The committee intended to extend the above user requirements to all public transportation namely -buses, taxis, etc. The current document covers the requirements for Vehicle Location Tracking and Emergency Button. The other ITS components like PIS, CCTV system, Fare collection etc. are deliberated and would be addressed in later phase and could be added as separate parts to the current document..
Based on these directions, the AISC Panel on ITS has prepared this AIS-140 titled,"Intelligent Transportation Systems (ITS) - Requirements for Public Transport Vehicle Operation". The panel also deliberated and identified the necessary elements for an effective implementation of vehicle level ITS system.
For AIS-140 Devices, in India, connectivity to report location, and Emergency Panic Button signal is though wireless cellular connectivity. There are device focused Cellular Connectivity Offerings like 'eSIM4Things' available in India, which cater to connectivity requirements of AIS-140 devices. eSIM4Things is fully compatible with all AIS-140 devices and with a connectivity manager and a range of tariff plans.
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