| The automotive sector is one of India's largest and | | | | For the 4-wheelers segment, MUL/Suzuki dominates |
| fastest growing manufacturing sectors. It is ranked | | | | the automotive landscape holding a 33% share of the |
| the 11th largest passenger car producer in the world. | | | | passenger car market in 2004/05. In the second |
| In the category of motorcycles and scooters, India is | | | | place is Tata Motors, a local company, commanding |
| ranked 1st and 2nd respectively. With India | | | | 26% share, while Hyundai Motor ranked third with |
| increasingly liberalizing its market place, many new | | | | 15% share and the rest split amongst close to 2 |
| joint ventures evolved, resulting in close to 2 dozen | | | | dozen other manufacturers. |
| global auto manufacturers setting up shop in India. | | | | For the 2-wheelers segment, it remains quite a local |
| The auto component segment is equally robust, | | | | dominant game but global players also have obvious |
| supplying the entire range of parts required by the | | | | presence in the market. Major players in this segment |
| domestic automobile industry and currently employs | | | | include Bajaj Auto, TVS Suzuki, LML Limited, |
| about 250,000 people. Although small by global | | | | Hero-Honda Motors, Yamaha Motor India, Kinetic |
| standards, this segment is growing rapidly as a result | | | | Engineering, Maharashtra Scooters Majestic Auto, |
| of its low costs and rising quality. Over 300 small and | | | | Kinetic-Honda Motors, Royal Enfield (India), Scooters |
| medium companies directly service the OEMs | | | | (India), Greaves Ltd. Foreign manufacturers also have |
| assembling vehicles in India. Downstream, close to | | | | presence in India through their 100% owned |
| 5,000 other micro firms are working for these Tier 1 | | | | subsidiaries, e.g. Honda Motorcycle, Scooter India Pvt. |
| suppliers, as well as for the replacement market | | | | Ltd. M/s Honda Motor Co., Japan, Yamaha Motor, |
| Competition in India | | | | Japan. The largest player is Hero Honda Motors, |
| As a result, competition in India's automobile and | | | | accounting for 40% of market share, followed by |
| parts sector had been heating up in the recent years. | | | | Bajaj Auto and TVS Motor, which account for 27% |
| Many global players in the automobile and parts | | | | and 18% respectively. |
| industry have already set up presence in India. Most | | | | Market Share in the Auto parts sector |
| of them are through tie-ups with dominant local | | | | The auto parts sector in India is highly fragmented |
| players, while some are done entirely on their own. | | | | and yet to overcome quality related problems. |
| In the absence of strong competition in the past, the | | | | Despite this, India has also managed to attract |
| local car manufacturer Maruti Udyog Ltd (MUL) has | | | | leading players in the auto parts manufacturing to |
| virtually dominated the Indian automotive market in | | | | locate in India. These players include Delphi Systems, |
| the passenger segments since the 1980s. As the | | | | Bosch, Visteon, Denso, Johnsons Controls, and TRW |
| automotive manufacturing sector rapidly evolved | | | | Automotive to name a few. As a result of such |
| through the dynamics of open market and | | | | successful localization of these components, vehicles |
| deregulation, many new joint ventures (both technical | | | | manufacturers started outsourcing more and more |
| and financial) were formed between local players with | | | | components rather than manufacture in-house. For |
| leading global manufacturers. In 1982, MUL, then a | | | | example, GM expects to source more auto parts a |
| wholly government-owned company, signed up a | | | | year from India by 2008, increasing to US$1 B from |
| collaboration agreement with Suzuki of Japan to | | | | US$120 B in 2007. Hence, local firms are encouraged |
| establish the volume production of contemporary | | | | to develop components and set up facilities. |
| models. Subsequently, the licensing regime was | | | | Whenever required, OEMs and these global tier 1 part |
| scrapped in 1993 paving way for 17 new ventures, | | | | makers supported through equity participation or |
| of which 16 are now manufacturing cars | | | | technical collaboration etc |
| Since then, there has also been an emergence of | | | | Competition in the International Market |
| new competition for higher value segments of the | | | | Besides the competition observed amongst global |
| passenger car market. Hence, local players like MUL | | | | players in the domestic India market. India as an |
| also began to face competition from new foreign car | | | | automotive manufacturing country is also pitting |
| makers. Ford entered the mid-range market with the | | | | against other competitors in the international market. |
| Ikon model in April 1998, a move which was followed | | | | In terms of exports of automobile, India is ranked |
| by Honda, Mitsubishi, Hyundai, and Daewoo. Other | | | | 29th, while China, the other huge automotive factory |
| players, Hyundai and Daewoo, have since improved | | | | ranked 17th. For exports of auto parts, India was |
| their share of the passenger car market with new | | | | 26th, while China came in 11th. The top country for |
| models | | | | exports of automobile and auto parts was Germany. |
| Market Share in the Automobile Sector | | | | |