The Indian auto-components industry can be broadly classified into the organised and unorganised sectors. The organised sector caters to the original equipment manufacturers (OEMs) and consists of high-value precision instruments while the unorganised sector comprises low-valued products and caters mostly to the aftermarket category.
Majority of Indian auto component exports are to countries in Europe, which account for 35 per cent followed by countries in North America with 26 per cent.
The export of auto components showed a great deal of improvement registering a growth of 16.7 per cent to Rs 61,487 crore (US$ 10.04 billion) in 2013-14 from Rs 52,690 crore (US$ 8.61 billion) in 2012-13. Also, with the automotive sector being a key driver
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Under the scheme, excise duties have been reduced for the following segments. For small cars, motorcycle, scooters and commercial vehicles – duty has been reduced from 12 per cent to 8 per cent. For mid-sized cars – duty has been reduced from 24 per cent to 20 per cent. For large cars – duty has been reduced from 27 per cent to 24 per cent.
Road Ahead
According to ACMA, the Indian auto components industry is likely to grow to US$ 150 billion by 2020 with domestic market share of about US$ 85 billion. The Indian auto components industry is well poised to achieve strong growth in the coming years owing to rising domestic demand in the OEM market. Also, the decline in raw material cost, such as decrease in cost of rubber, will help in improving the operating margins and consequently aid in increasing the exports from the auto components sector in India.
Investments
Since 2000, the auto component industry has recorded an investment level of Rs 18 bn and has attracted US$ 530 mn in terms of foreign direct investment. Investments in the sector have been growing at 14% per year. In 2005-06, investments touched US$ 4.4 bn, and are expected to grow significantly in
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• Government support: Indian government has also put Auto among its priorities with 2012 target to become 10% of our GDP.
• Indian Automotive Industry is following global accepted quality measures at a lower cost. This makes it a perfect destination for production-outsourcing of automobiles.
• The availability large talent pool at cheap prices.
• Availability of cheap R&D; 4 IITs be deemed as centres of excellence for automobile research and access to latest technology.
WEAKNESS
The biggest and probably the only weakness of Indian automobile Industry is its slow growth in Research and Development most companies (barring TATA and M&M) do not have adequate spending on R&D in comparison to their turnover. Maruti for instance is completely dependent upon Suzuki for any new technology all of the successful cars sold by it were developed by Suzuki; Swift, A-Star (which replaced alto in other markets as New Alto), SX4, Ritz etc. This weakness will soon become history as Indian companies are catching fast in R&D and are showing strong signs of success e.g.: M&M Scorpio Hybrid, TATA
There is no doubt that the United States depends heavily on the automotive industry. The economy has always responded to the fluctuations of the automotive industry as well as the automotive industry responding to the economy. The future of the United States economy is dependent
The manufacturing of automobile parts is always dependent on the demand for new car sales which are dependent on interest rates, the health of the economy, and by the replacement parts market (Hoover's, 2014). The jobs status in America is still growing at a very small place causing would be buyers to stay in their older vehicles longer before making the plunge to purchase. So, buying activity is slower compare to years past making it even tougher for industry competers. In a competitve manufacturing market small companies can compete along with larger ones by focusing on less parts or more specialized parts. In this market manufacturing profits rely on the demand for new vehicle volume. In 2009 from the...
The automobile sector has been a robust sector that has experienced tremendous growth in the past seven to eight years. Apart from two years in particular -2008-09 & 2012-13, there is general trend of ten percent plus growth in various segments like passenger car, commercial vehicles, two and three wheelers. The following chart shows the growth rate of various years in each sectors.
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
Did you ever think of the most profitable companies in India? Which is the third most profitable company in India? Yes, you guessed it right! It is the Reliance Industries Ltd (RIL). RIL is the second largest public traded company in India in terms of market capitalisation. RIL contributes about 20% of total exports from India. Did you ever wonder from where did Dhirubhai Ambani get the idea of selling crude oil in India? When Dhirubhai was a teenager, he used to work in a company in Yemen. In 1962, he returned to India with an idea of starting his own import-export business. Then, he moved into petrochemicals business and established a profitable and global enterprise in India itself.
Hence production units for example the exports that take place in Europe and its Ukraine therefore they have competitive advantage with value into the technology. It gone through the acquisition by natural resource seeking for example Tata Company has invested in coal mines in different country and ownership advantage the company that enables them to successfully acquire established goal companies (KUMAR, 2008).Location advantage of Tata motors has the nature of the product and the services which the company requires to invest In plant or an office (Neelankavil and Rai,2009).In addition the Tata Company has a manufacturing with joint venture and Thornburg automotive gives which them a location advantage again in the south East Asia region. Internationalization advantage of Tata motors will help them in having better control over the manufacturing units as licensing option which are issues related to transfer of technology or technology theft. The advantages of own production for Tata company which they have done is introducing a new car called Nano an ultra low cost car
Picciotto, Dan and Nishit K Madlani. "The Global Auto Industry Shifts Its Focus To OVerseas And Emerging Markets." Credit Week (2013): 26. Online. 21 May 2014. .
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It is no doubt that automobiles have become a way of life in the current society besides the transport sector contributing immensely to the economic growth of every cou...
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My interest in the field of Automobile goes back to my early years in high school which is when I decided to pursue a career in engineering. As a child I was always fascinated by the very concept of automobile. Further, my father’s constant involvement in the automotive industry as an insurance claims assessor further enhanced my interests in automobiles. He was the one responsible for showing me the correct path to pursue my career in automobile field. Hence, after having completed my primary education, I decided to delve straight into the world of mechanics and engineering and pursued a diploma in mechanical engineering followed by a bachelor’s degree in mechanical engineering. Since there were very few options in India & there was no direct path to get into automobile field.
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As Tata Motors is an automobile company, the raw materials required in production of a car or a vehicle include aluminium, copper, platinum, palladium, rhodium, steel and zinc. The prices for these materials have been increasing in the recent years. An increase in price of input materials could severely impact its profitability. Additionally, increases in fuel costs also pose a significant challenge to automobile manufacturers worldwide, especially in the commercial and premium vehicle segments where increased fuel prices have an impact on
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