Last year, 2.6 million units of new cars were produced in India. This made the country the seventh largest auto market in the world. In the continent of Asia, India is the fourth leading exporter of cars, after Japan, South Korea and Thailand. It has been projected that in another 40 years, the Indian automobile sector will top the world in car production and around 611 million automobiles will be plying on the Indian roads.
The economic liberalization in India that happened in 1991 brought in an increase in competitiveness and a relaxation in restrictions. Post 1991, the Indian car market has been displaying steady growth. Many Indian automotive majors like M&M, Maruti Suzuki and Tata Motors expanded their base both in India and abroad. The Indian automobile sector’s healthy and financially viable growth led to the internal development and also gave rise to noteworthy India-specific investments by multinational car makers. In February last year, the monthly sales of passenger cars in India had exceeded 100,000 units.
Post Indian independence in 1947, the Government of India and the private sector too launched several programmes to build an auto industry, but in vain. Noticeable changes began only in the 1970s, and that too, only in the truck, tractor and two-wheeler automobile sectors. Cars were still considered just a luxury and not a necessity. Luckily, Japanese manufacturers slowly made their entry in the Indian market finally leading to the set up of Maruti Udyog which is now known as Maruti Suzuki and is the largest selling automotive major in India. Many other car makers soon made their entry on Indian roads.
It was in the 1980s that the car industry started seeing growth. There were many global automotive majors coming to India with intentions of building joint ventures. Everybody smelt the potential that the Indian automobile sector possessed and wanted to explore it further. Several Japanese car makers launched joint-ventures for building light commercial vehicles too.
In recent times, India has appeared as one of the largest manufacturers of small cars globally. India’s sturdy engineering base and proficiency when it comes to production of affordable, fuel-economic cars has led to the expansion of production facilities of various car manufacturers like Hyundai, Toyota, Nissan, VW and Maruti Suzuki.
Two years ago Hyundai alone had exported around 2,40,000 cars, all made in India. By next year, Nissan plans to export at least 250,000 units produced in its plant in India. GM too has great plans for India. The car maker’s Indian subsidiary, Chevrolet has been doing real well and GM wants about 50,000 cars manufactured in India in a year’s time. The sales figures for almost all car manufacturers in India have been displaying an all-time high and this has been projected to grow further.