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Transcript of 4h sem GIPTE
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Discussion about impact on Indian
economy by Automobile sector.(International trade perspective)
Presented by:
Kritika Arora
Prakash G
Prateek Kr. Sawhney
A PART OF: GROWTH PROSPECTS OF THURST AREAS OF INDIANEXPORTS
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INTRODUCTION
The first commercial automobile ran on Indias road was in 1897,
which was imported directly from Germany.
By 1940, Indian automobile sector got a start up by EmbryonicAutomotive industry. By1950 manufacturing of parts for
automobiles started.
The entry of foreign automobile industries after 1970s gave the
complete shape for Indian automobile industry and a start up
for its growth.
The liberalization policy and weakening of license raj by the year
1991, allowed the automobile industries to promote their
operations in a large scale.
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INDIAS AUTOMOBILE SECTOR
After 1991, the liberalization policy for foreign trade hasopened the door for foreign Automobile industries.
Initial entry was majorly by Imports and JVs with IndianAuto tycoons Bajaj, Maruti, Tata, TVS, Ashok Leyland, etc.,
By 1995, several automobile industries were set in India,where parts were imported and assembled for sales inIndian subcontinent .
Today around 70 major automobile manufacturers havetheir ventures in India either on its own or JV or strategicalliance with Indian companies or foreign companies.
More than 1043 major players are there contributing toIndian automobile industry growth ad development.
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FIGURES..
The automotive industry (including components & tyres)has already attained a turnover ofRs. 2, 20,600 crore.
The industry provides direct and indirect employment to
13.1 million people.The contribution of the automotive industry to GDP hasrisen from 2.77% in 1992-93 to 4.14% in 2008-09.
The industry is also making a contribution of 17% to thekitty of indirect taxes of the Government.
In 2010 (April-August), overall automobile exportsregistered a growth rate of 48.42 percent with industryproducing 7,063,063 vehicles.
http://commerce.nic.in/
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EXPORTS AND IMPORTS
After 1998, Indian automobile industry developed into a majorsector, assembling almost every car that was sold in Indiansubcontinent.
Imports were reduced by 15 times and exports were
promoted, compared to the number of automotives tradedpreviously.
More than 44 varieties of automobile are manufactured whichconstitutes the 59 different automobile sales such as Motorcycles, Cars, SUVs, Lorry, Bus etc.,
Around 84 major ancillaries for the automobile industry is beingimported for assembling and sales purpose in India.
6% of Indian automobiles on road today are imported directlyfrom countries like Japan, Germany, Korea and US.
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PRODUCTION HUBS
A major chunk of India's automobile manufacturing industryis based in and around the city of Chennai ("Detroit of
India), accounting for 60 per cent of the country's
automotive exports.
Gurgaon and Manesar are hubs where most of the cars inIndia are manufactured or assembled.
The Chakan corridor near Pune, Maharashtra is another
vehicular production hub.
Halol in Gujarat, Aurangabad in Maharashtra, Kolkatta inWest Bengal are some of the other automotive
manufacturing regions around the country
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TREND IN THREE YEARS
Exports from India touched 3,31,539 units in FY09 asagainst 2,11,112 units in the previous financial year.
Overseas presence with exports from India by registering a
growth of 57.04% in the last fiscal.
Overall vehicle exports from India grew by 23.60% at15,30,660 units in the last financial year, while the same
stood at 11,38,333 units in the FY07.
Exports growth in the financial year 2009 was robust also in
the two-wheeler category, which registered 22.50 percent rise at 10,04,174 units as against 7,69,713 units in
the year 2007-08.
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CLASSIFICATION OF COMMODITIES
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INDIAN AUTOMOBILE EXPORT SUMMARY
51%
21%
10%
5%
13%
2009-2010
MOTR CARS & OTHR MOTR VHCLS FR TRNSPRT OF PERSONS(EXCL OF 8702)INCL RCNG CARS ETC
PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADINGS NOS 8701 TO 8705
MOTORCYCLES(INCL MOPEDS)& CYCLS FTD WTH AUXLRY MOTOR,W/N WTH SIDE-CARS;SIDE-CARS
TRACTORS(EXCL TRACTORS OF HDG NO.8709)
Others
Commodity wise
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INDIAN AUTOMOBILE EXPORT SUMMARY
9%
7%
9%
5%
70%
2009-2010
U K U S A ITALY GERMANY Others
U K , 560.41
U S A, 435.91
ITALY , 525.72
GERMANY, 334.72
Others, 4312.51
Country wise
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INDIAN AUTOMOBILE EXPORT SUMMARY
18%
82%
2009-2010
WHEEL CHAIRS FR INVALID MCHNCLYPRPLD
OTHR INVALID CARRIAGES MCHNCLYPRPLD
Increased export
commodities
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INDIAN AUTOMOBILE EXPORT SUMMARY
86%
7%
5%2%
0%
2009-2010
OTHR VHCLS(>13 PERSONS) WTH CMPRSN-IGNTN INTRNL CMBSTN PISTON ENGINE
OTHR VHCLS(
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INDIAN AUTOMOBILE IMPORT SUMMARY
8%
78%
8%
6%
IMPORTSIN 2009-10MOTR CARS & OTHR MOTR VHCLS FR TRNSPRT OF PERSONS(EXCL OF 8702)INCL RCNG CARS ETC
PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADINGS NOS 8701 TO 8705
PRTS & ACCSSRS OF VHCLS OF HDG 8711-8713
OTHERS
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INDIAN AUTOMOBILE IMPORT SUMMARY
KOREARP
CHINAPRP15
JAPAN1
OTHERS41
IMPORTSIN 2009-10
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INDIAN AUTOMOBILE IMPORT SUMMARY
47%
3%
50%
IMPORTS 2009-10
BABY & INVALIDCARRIAGES
PARTS OF BABYCARRIAGE
BABY CARRIAGES &
PARTS THEREOF
Increased Import
commodities
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INDIAN AUTOMOBILE IMPORT SUMMARY
86%
9%3%
2%
EXIN DATA BANK2009-10
CHASSIS FR VHCLSHDNG 8702 (>13
PERSONS)CHASSIS FR MOTORVHCLS HDNG 8705
CHASSIS FR VHCLSHDNG 8703 EXCP 3-
WHLDOTHERS
Decreased Import
commodities
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DOMESTIC INDUSTRY SCENARIO
` The cumulative growth of the Passenger Vehicles segmentduring April 2007 March 2008 was 12.17%.
` Passenger Cars grew by 11.79%, Utility Vehicles by 10.57%and Multi Purpose Vehicles by 21.39% for the year 2007-08.
` The Commercial Vehicles segment grew marginally at4.07%. While Medium & Heavy Commercial Vehiclesdeclined by1.66%, Light Commercial Vehicles recorded agrowth of 12.29%.
` Three Wheelers sales fell by 9.71%.` Two Wheelers registered a negative growth rate of 7.92%
during 2007-08.
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AUTOMOBILE DOMESTIC SALES TRENDS
Categories 2003-
04
2004-
05
2005-
06
2006-
07
2007-
08
2008-
09
2009-10
Passenger
Vehicles902,096 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776
CommercialVehicles
260,114 318,430 351,041 467,765 490,494 384,194 531,395
Three
Wheelers284,078 307,862 359,920 403,910 364,781 349,727 440,368
Two
Wheelers 5,364,249 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231Grand Total
6,810,537 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,292,770
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SWOT OF INDIAN AUTOMOBLIE
SECTOR
` Strengths:
1. Cost competitiveness in terms of Labour and Raw
material
2. Established manufacturing base
3. Qualified and skilled man power
4. Growing domestic automotive industry
5. Manufacturing capabilities with international quality
standards6. High operational efficiency
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` Weakness:1. Low investment in Research and Development
2. Limited knowledge of product liability and offshore
warranty handling
3. Limited domestic market for various components
inhibiting capacity creations.
4. Comparatively poor infrastructure for supply chain and
exports
5. Lack of experience in system integration
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` Opportunities:1. The growing need to outsource
2. Higher frequency of introducing of newer models by
automakers
3. Global market opportunity itself is the ultimate
opportunity provided by auto industry.
4. Leverage on product engineering expertise to improve
the worthiness and exports of auto component.
5. Acquisition in foreign markets
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` Threats:1. Competition from other low cost
countries like China, Taiwan, Thailand etc.
2. Expansion of the European Union- inclusion of
Hungary, Czech Republic Poland etc which are major
exporting countries to western Europe.
3. Appreciation of Rupee
4. Developments of new technologies like fuel cell, hydrogen
powered vehicles, which may affect the auto component
industry.
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DISCUSSION ON ECONOMICAL IMPACT
In the last decade their share in the Indian economy isaround 5% of GDP.
The Indian automobile industry employs half a million
people in the organised sector and about ten million
people in the unorganised sector.Automobile Exports registered a growth of 22.30 percent
during the current financial year.
Manufacturing units exceeded 18,04,619 this FY.
Till 2009-10 the Import : Export ratio, is in the trend of
1.75:1.
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CHALLENGES
` The internal barriers in the country and constraints atinternational level had sluggish down the industry
growth, these barriers predominantly are hindrances like
Tax structure especially the disparity in custom and
excise duties on the raw material of autocomponents, and automobiles.
` The unavailability of resources at reasonable cost for
example- Power, Skilled Labour, Technology etc is also a
major constraint.
International Journal of Economics and Business ModelingISSN:0976531X & E-ISSN:09765352, Vol. 1, Issue 2, 2010
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Bibliography
http://www.fundoodata.com/industry-companies/Automobile/Auto-Ancillaries/Automobiles/224.html
http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-
sectors/automobile.htm
Society for Indian Automobile Manufacturers
Department of Heavy Industries
Automotive Component Manufacturers Association of India
Data sheet 1 Datasheet 2
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