Automobile Industry

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Automobil

Automobile

e Industry

Industry

Hailed as ‘the industry of industries’ by Peter Drucker, the founding Hailed as ‘the industry of industries’ by Peter Drucker, the founding father of the study of management, in 1946, the automobile industry had father of the study of management, in 1946, the automobile industry had evolved continuously with changing times from craft production in 1890s to evolved continuously with changing times from craft production in 1890s to mass production in 1910s to lean production techniques in the 1970s. The mass production in 1910s to lean production techniques in the 1970s. The Asian countries, mainly by Japan, China and India, registered a 9% increase Asian countries, mainly by Japan, China and India, registered a 9% increase in production over last year, constituting 35.9% of the global production. In in production over last year, constituting 35.9% of the global production. In fac

fact t ChiChina na and and IndiIndia a posposted positted positive growive growth th ratrate e oveover r 2002003. 3. ThiThis s supsupplyply mainly catered to meet the demand from households where the automobiles mainly catered to meet the demand from households where the automobiles constituted the second largest expenditure item next only to housing. Thus constituted the second largest expenditure item next only to housing. Thus the global automobile industry dominated by Europe, US, Japan, and of late the global automobile industry dominated by Europe, US, Japan, and of late by China and India, continued to have a significant influence on economic by China and India, continued to have a significant influence on economic de

devevellopopmmenentt, , iintnteerrnanatitiononal al ttraradede, , forreifo eign gn didirreecct t iinvnveeststmmeent nt anandd environme

environment-friendly nt-friendly practices.practices.

Total Sales Trend of Four-wheelers in India Total Sales Trend of Four-wheelers in India

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Porter’s Five Forces Analysis of Indian

Automobile Sector

1.

Industry Rivalry

•

• Industry Concentration:Industry Concentration:

T

The he CoConcncenentrtratatioion n RRatatio io (C(CR) R) inindidicacatetes s ththe e peperrcecent nt of of mar

markeket t sharshare e helheld d by by a a comcompanpanyy. . A A highigh h conconcencentratratiotion n raratiotio indicates that a high

indicates that a high concentration of market share is held by theconcentration of market share is held by the largest firms - the industry is concentrated. With only a few firms largest firms - the industry is concentrated. With only a few firms hol

holdinding g a a larlarge ge mamarkrket et shasharere, , the the marmarkeket t is is lesless s comcompetpetitiitiveve (closer to a monopoly). A low concentration ratio indicates that (closer to a monopoly). A low concentration ratio indicates that the industry is characterized by many rivals, none of which has a the industry is characterized by many rivals, none of which has a significant market share. These fragmented markets are said to significant market share. These fragmented markets are said to be competitive. If rivalry among firms in an industry is low, the be competitive. If rivalry among firms in an industry is low, the industry is considered to be disciplined

industry is considered to be disciplined

•

• High Fixed costsHigh Fixed costs

Whe

When n tottotal al coscosts ts arare e momostlstly y fixfixed ed coscosts, ts, the firm the firm musmustt produce capacity to attain the lowest unit costs. Since the firm produce capacity to attain the lowest unit costs. Since the firm must sell this large quantity of product, high levels of production must sell this large quantity of product, high levels of production lead to a fight for market share and results in increased rivalry. lead to a fight for market share and results in increased rivalry. The industry is typically capital intensive and thus involves high The industry is typically capital intensive and thus involves high

fixed costs fixed costs

•

• Slow market growthSlow market growth

Indust Indust ry ry Bargaining Bargaining Power of Power of Bargaining Bargaining Power of Power of Threat of Threat of New Entrants New Entrants Threat of Threat of Substitutes Substitutes

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In

In grgrowiowing ng marmarkeket, t, firfirms ms can can imimprprove ove thetheir ir ecoeconomnomiesies.. Though the market growth has been impressive in the last few Though the market growth has been impressive in the last few years (about 8 to 15%), it takes a beat in even slight economic years (about 8 to 15%), it takes a beat in even slight economic disturbances as it involves a luxury good. Aggressive pricing is disturbances as it involves a luxury good. Aggressive pricing is needed to sustain growth in such situations

needed to sustain growth in such situations

•

• Diversity of rivals:Diversity of rivals:

Industry becomes unstable as the diversification increases. Industry becomes unstable as the diversification increases. In

In ththis is cacase se ththe e didiveversrsitity y of of ririvavals ls is is momodederarate te as as momost st ofoffeferr pr

proodduucctts s wwhhiicch h arare e cclloosse e tto o ssttananddaarrd d vveerrssiionons s aannd d tthhee competitors are also mostly similar in

competitors are also mostly similar in strengthstrength

•

• Highly competitive industry:Highly competitive industry:

The presence of many players of about the same size little The presence of many players of about the same size little differentiation between competitors, and a very mature industry differentiation between competitors, and a very mature industry with very little growth were the features of a highly competitive with very little growth were the features of a highly competitive industry. Higher the competition in the industry lower would be industry. Higher the competition in the industry lower would be the profit margin. To remain ahead in competition, auto-makers the profit margin. To remain ahead in competition, auto-makers were tempted to offer value added services to the customers were tempted to offer value added services to the customers incurring more costs

incurring more costs

2.Threat of New Entrants

These are the characteristics that inhibit the entrance of new rivals These are the characteristics that inhibit the entrance of new rivals into the market and in turn protect the profits of the existing firms. into the market and in turn protect the profits of the existing firms. Based on the present profit levels in the market, one can expect the Based on the present profit levels in the market, one can expect the entrance of new firms into the market or not. The entrance is however entrance of new firms into the market or not. The entrance is however also affected by the start-up costs

also affected by the start-up costs

•

• Economies of scale:Economies of scale:

The Minimum Efficient Scale (MES) is the point at which The Minimum Efficient Scale (MES) is the point at which unit costs are minimized. The greater the difference between the unit costs are minimized. The greater the difference between the MES and the entry unit cost, greater is the barrier. Economies of MES and the entry unit cost, greater is the barrier. Economies of sca

scale le arare e becbecomioming ng incincrereasiasingly ngly impimportortant ant as as comcompetpetitiition on isis driving the profit margins to lower levels. Also being a capital driving the profit margins to lower levels. Also being a capital iinntteennssiivve e iinndduussttrry y eeccoononommiiees s oof f ssccaalle e hhaavve e iimmppoorrttaanntt consequence

consequence

•

• Government policies:Government policies: o

o Automobile Industry was delicensed in July 1991 with theAutomobile Industry was delicensed in July 1991 with the

announcement of the New Industrial Policy announcement of the New Industrial Policy

o

o The passenger car industry was delicensed in 1993. No The passenger car industry was delicensed in 1993. No

industrial licence is required for setting up of any unit for industrial licence is required for setting up of any unit for manufacture of automobiles except in some special

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o

o TThhe e nnoorrmms s ffoor r FFoorreeiiggn n IInnvveessttmmeennt t aannd d iimmppoorrt t oof f

tech

technology have nology have been been progprogreressivessively ly liberliberalizealized d over theover the years for manufacture of vehicles including passenger cars years for manufacture of vehicles including passenger cars in order to make this

in order to make this sector globally competitivesector globally competitive

o

o AAt t prpresesenent t 10100% 0% FFororeieign gn DiDirrecect t InInveveststmement nt (F(FDIDI) ) iiss

permissible under automatic route in this sector including permissible under automatic route in this sector including p

paasssseennggeer r ccaar r sseeggmmeenntt. . TThhe e iimmppoorrt t oof f te

techchnonolologygy/t/tecechnhnolologogicical al upupgrgradadatatioion n on on ththe e roroyayaltltyy payment of 5% without any duration limit and lump sum payment of 5% without any duration limit and lump sum payment of USD 2 million is allowed under automatic route payment of USD 2 million is allowed under automatic route in this sector

in this sector

o

o The automotive industry comprising of the automobile and The automotive industry comprising of the automobile and

the auto component sectors has made rapid strides since the auto component sectors has made rapid strides since delicensing and opening up of the sector to FDI in

delicensing and opening up of the sector to FDI in 19911991

o

o The industry had an investment of about Rs. 50,000 crore The industry had an investment of about Rs. 50,000 crore

in 2002-03 which has gone up to Rs. 80,000 crore by the in 2002-03 which has gone up to Rs. 80,000 crore by the year 2007. The automotive industry has already attained a year 2007. The automotive industry has already attained a turnover of Rs. 1,65,000 crore (34 billion USD)

turnover of Rs. 1,65,000 crore (34 billion USD)

o

o The industry provides direct and indirect employment to The industry provides direct and indirect employment to

1.3

1.31 1 crcrorore e peopeopleple. . The The concontritributbution ion of of the the autautomoomotivtivee industry to GDP has risen from 2.77% in 1992-93 to 5% in industry to GDP has risen from 2.77% in 1992-93 to 5% in 2006-07. The industry is making a contribution of 17% to 2006-07. The industry is making a contribution of 17% to the kitty of

the kitty of indirect taxindirect taxes of es of the Governmentthe Government Wi

With th all all the the polpoliciicies es rregaegardrding ing the the FDI FDI and and TTariariff ff barbarrieriers rs asas mentioned above, it has become easier for the foreign players to mentioned above, it has become easier for the foreign players to enter the Indian automobile industry.

enter the Indian automobile industry.

3.

Threat of Substitutes

•

• Th The e rereplaplacemcement ent marmarkeket t is is chacharacracterterizeized d by by the the prpreseesence nce of of

se

seveveraral l smsmalall-l-scscalale e susupppplilierers s whwho o scscorore e ovover er ththe e ororgaganinizezedd players in terms of

players in terms of excise duty exexcise duty exemptions and lower emptions and lower overheads.overheads.

•

• A A prprododucuct’t’s s prpricice e elelasastiticicity ty is is afaffefectcted ed by by ththe e prpresesenence ce of of

su

subsbstititututetes s as as itits s dedemamand nd is is afaffefectcted ed by by ththe e chchanange ge in in ththee substitute’s prices

substitute’s prices

•

• The cost of the automobiles along with their operating costs was The cost of the automobiles along with their operating costs was

driving customers to look for

driving customers to look for alternative transportation optionsalternative transportation options

•

• The new technologies available also affect the demand of the The new technologies available also affect the demand of the

product product

E.g.

E.g.: In case of Maruti’s products, the threat of substitutes: In case of Maruti’s products, the threat of substitutes is high. The competition is intense as several players have is high. The competition is intense as several players have products in the categories given by Maruti. However, in the products in the categories given by Maruti. However, in the 80

800c0cc c rarangnge e it it is is ththe e mamarkrket et leleadader er anand d ththe e ththrreaeat t of of substitute products is low. Price performance comparison substitute products is low. Price performance comparison

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favors heavily towards Maruti in most product categories. favors heavily towards Maruti in most product categories. Also the high availability and quality of services offered by Also the high availability and quality of services offered by Maruti gives the customer a better trade-off

Maruti gives the customer a better trade-off

4.

Bargaining Power of Suppliers

•

• Suppliers can influence the industry by deciding on the price atSuppliers can influence the industry by deciding on the price at

which the raw materials can be sold. This is done in order to which the raw materials can be sold. This is done in order to capture profits from the market.

capture profits from the market.

•

• Steel is a major input in this industry and so steel prices have aSteel is a major input in this industry and so steel prices have a

sharp and immediate impact on

sharp and immediate impact on the product pricethe product price

•

• The industry being capital intensive switching costs of suppliers The industry being capital intensive switching costs of suppliers

is high, other than steel as raw material which is highly price is high, other than steel as raw material which is highly price sensitive and the firm may easily move towards a supplier with sensitive and the firm may easily move towards a supplier with lower cost

lower cost

5.

Bargaining Power of Buyers

•

• It specifies the impact of It specifies the impact of customers on the productcustomers on the product

•

• When buyer power is strong, the buyer is the one who sets theWhen buyer power is strong, the buyer is the one who sets the

price in the

price in the market. Hermarket. Here there is purchases of e there is purchases of large volumeslarge volumes

•

• There is prevalence of alternative options There is prevalence of alternative options •

• PPririce ce sesensnsiititivve e ccususttomomerers s wweerre e sosomme e of of ththe e fafacctotorrs s tthahatt

determined the extent of influence of the buyers in

determined the extent of influence of the buyers in this industrythis industry E.g.

E.g.: : In In ththe e cacase se of of MaMarurutiti, , ththe e sasaleles s vovolulumemes s hahave ve shshowownn increasing trend over past so many years. The customers are more or increasing trend over past so many years. The customers are more or less concentrated in metros or other tier two cities. The industry is also less concentrated in metros or other tier two cities. The industry is also concentrated in these regions mostly. Most of them are have good concentrated in these regions mostly. Most of them are have good amount of knowledge about the product. Except the 800cc range in amount of knowledge about the product. Except the 800cc range in other categories brand loyalty is only moderate. Also it is difficult to other categories brand loyalty is only moderate. Also it is difficult to measure since repurchases are rare. Product differentiation is high as measure since repurchases are rare. Product differentiation is high as there are many categories in the passenger vehicle segment. Buyers there are many categories in the passenger vehicle segment. Buyers get incen

get incentivtives es in in the form of the form of coscost t disdiscoucounts nts and and betbetter afteter after r salsaleses services

services

•

• The The major focus of Indian Component suppliers is Quality as suggested bymajor focus of Indian Component suppliers is Quality as suggested by one

one of of the the JapJapaneanese se QuaQuality lity focfocus us firfirm. m. ThThe e IndIndustustry ry assassociociatioation n ACMACMAA re

repoportrts s thathat t ovover er 17170 0 of of itits s memembmberers s hahave ve alralreaeady dy rerececeivived ed ISISO-O-90900000 certification and 23 have received QS9000 certification. There are examples of certification and 23 have received QS9000 certification. There are examples of Indian suppliers becoming single source global suppliers for leading OEMS Indian suppliers becoming single source global suppliers for leading OEMS (GM and Ford), and also becoming global leaders with Sundaram Clayton (GM and Ford), and also becoming global leaders with Sundaram Clayton receiving the Deming award but there are few drawbacks as shown by A.T, receiving the Deming award but there are few drawbacks as shown by A.T, Kearney survey which found that defect rates in India are in the range of Kearney survey which found that defect rates in India are in the range of 1000-2000 ppm against Japanese average of 100-200 ppm

1000-2000 ppm against Japanese average of 100-200 ppm

•

• The rising gasoline price is bound to influence the buyers The rising gasoline price is bound to influence the buyers

Second Hand Market

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•

• Worldwide, the ratio of new cars to old cars is one to four. In India,Worldwide, the ratio of new cars to old cars is one to four. In India,

however, it is still at one to one; with majority of the sales coming from however, it is still at one to one; with majority of the sales coming from the small car

the small car marketmarket

•

• The second-hand car market in India sees about 40,000 listings online The second-hand car market in India sees about 40,000 listings online

every every month month E.g.: E.g.: Carwale.com Carwale.com al

also so hhas as ttie ie--u

upps s wwiitthh lleeaaddiinng g ccaarr

manufacturers like Maruti, Hyundai, GM, Tata Motors, Mahindra, Mitsubishi, manufacturers like Maruti, Hyundai, GM, Tata Motors, Mahindra, Mitsubishi, Ford, Toyota and Skoda, as well as finance companies and banks like ICICI, Ford, Toyota and Skoda, as well as finance companies and banks like ICICI, T

Tata ata FFinainance nce and and DeuDeutsctsche he banbank, k, to to facfaciliilitattate e the the prproceocess ss of of buybuying ing andand sel

sellinling g secsecondond-ha-hand nd carcars. s. “It “It is is thithis s easeasy y accaccessessibiibilitlity y thathat t bribrings ngs ararounoundd 25,000 second-hand car enquirers to the portal every month, out of which 25,000 second-hand car enquirers to the portal every month, out of which 40% actually go on to buy a car.

40% actually go on to buy a car.

BCG Matrix (Hyundai)

I I n n d d u u s s t t r r y

y Terracan,Getz,Ac Terracan,Getz,Ac_cent_cent i10,Vernai10,Verna

Elantra and Elantra and Tucson

Tucson SantroSantro

Relative Market share

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STAR

i10:

Si

Sincnce e itits s lalaununch ch in in InIndidia a on on OcOctotobeber r 3131, , 202007 07 ththe e i1i10 0 hahas s rrececeieiveved d anan overwhelming response from not only the media but from car buyers across overwhelming response from not only the media but from car buyers across the globe as well. In the domestic market in India it has sold over 45,000 the globe as well. In the domestic market in India it has sold over 45,000 units while from its overseas market HMI has received orders for around units while from its overseas market HMI has received orders for around 72,000 units in a short span of 3 months since its European debut at the 72,000 units in a short span of 3 months since its European debut at the Bologna Motor Show in

Bologna Motor Show in December, 2007.December, 2007.

The all new Hyundai i10 has bagged the title of the ‘Indian Car of the Year The all new Hyundai i10 has bagged the title of the ‘Indian Car of the Year 2008.It has already captured the entire gamut of the most prestigious of 2008.It has already captured the entire gamut of the most prestigious of In

Indidian an auautotomomobibile le awawarards ds wiwith th itits s didiststininctctioion n and and peperfrforormamancnce. e. It It hahass rrececeieiveved d a a tototatal l of of 4 4 ‘C‘Car ar of of ththe e YYeaear’ r’ awawarards ds frfrom om BuBusisineness ss StStanandadardrd Motoring, CNBC TV18 Autocar, NDTV Profit Car and Bike India and Overdrive Motoring, CNBC TV18 Autocar, NDTV Profit Car and Bike India and Overdrive magazine.

magazine. The car also made a cleThe car also made a clean sweep of the ‘Viean sweep of the ‘Viewers’ Choice’ awarwers’ Choice’ awardd bagging the Aaj Tak Viewers’ Choice awards as well as the ‘Small car of the bagging the Aaj Tak Viewers’ Choice awards as well as the ‘Small car of the Year’ by NDTV Profit Car & Bike India.

Year’ by NDTV Profit Car & Bike India.

Verna

Hyundai launched Ver

Hyundai launched Verna sedan in na sedan in India during the third quarter (July-Sept.) of India during the third quarter (July-Sept.) of 2006, positioned between its Accent and Elantra models.

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CASH COW

Santro

Santro rated as the “Best Small Car” and also the “Most Appealing Car” for Santro rated as the “Best Small Car” and also the “Most Appealing Car” for two consecutive years 2000 and 2001.

two consecutive years 2000 and 2001.

Santro was also called as “Best Fuel Economy” making comparisons with Santro was also called as “Best Fuel Economy” making comparisons with petrol-car rivals like Indica V2, Alto Vxi, Palio 1.2, Zen and WagonR, Santro petrol-car rivals like Indica V2, Alto Vxi, Palio 1.2, Zen and WagonR, Santro compared with rivals Indica Diesel and Palio 1.2 and ranked as the “Most compared with rivals Indica Diesel and Palio 1.2 and ranked as the “Most Affordable Car” in terms of frequently used spare parts. Its also considered Affordable Car” in terms of frequently used spare parts. Its also considered as “Most Practical Car”

as “Most Practical Car” and “The Best Small and “The Best Small Car—2002.Car—2002.

QUESTION MARKS

Accent

Accent was targeted at corporate executives and high net worth individuals Accent was targeted at corporate executives and high net worth individuals who were looking for contemporary technology and value. In a bid to capture who were looking for contemporary technology and value. In a bid to capture 20% of the 60,000 annual mid-sized car market with Accent in the first year 20% of the 60,000 annual mid-sized car market with Accent in the first year of

of operoperationsations, , HyundHyundai ai focusefocused d on on nurtunurturing its ring its rerelationlationship with ship with exiexistingsting customers, dealers as well as

customers, dealers as well as its financing partners like ICICI, Kotak Mahindraits financing partners like ICICI, Kotak Mahindra and Citibank.

and Citibank.

Getz

In late 2004, Hyundai launched its premium hatchback model Getz, which In late 2004, Hyundai launched its premium hatchback model Getz, which ca

came me eqequiuippepped d wiwith th a a 1.1.3 3 lilitrtre e SiSingngle le OvOverer-H-Heaead d CaCam m (S(SOHOHC) C) pepetrtrolol engine.Getz was available in two variants—GL and GLS.

engine.Getz was available in two variants—GL and GLS.

The Getz was positioned as a premium hatchback or B plus vehicle between The Getz was positioned as a premium hatchback or B plus vehicle between

the compact car and

the compact car and mid-size car segment.mid-size car segment.

Terracan

On August 5,2003, Hyundai entered the Sports Utility Vehicle (SUV) market On August 5,2003, Hyundai entered the Sports Utility Vehicle (SUV) market segment with the “Terracan”. The initial success of Terracan had more to do segment with the “Terracan”. The initial success of Terracan had more to do with an aggressive marketing strategy than anything else. With sports utility with an aggressive marketing strategy than anything else. With sports utility

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vehicles not exactly taking off in India, Hyundai

vehicles not exactly taking off in India, Hyundai decided to focus more on thedecided to focus more on the dea

dealerlers s to to selsell l TTererracracan an thathan n the the prproduoduct. ct. The The majmajor or comcompetpetitoitors rs wewerere Forester from GM, Vitara from Suzuki and Honda CR-V.

Forester from GM, Vitara from Suzuki and Honda CR-V.

DOGS

Elantra

In April 2004, in a bid to garner a sizeable market share in the fast growing In April 2004, in a bid to garner a sizeable market share in the fast growing executive car segment, Hyundai launched its sedan Elantra, to compete with executive car segment, Hyundai launched its sedan Elantra, to compete with sim

similailar r modmodels els frfrom om the the stastablebles s of of TToyooyota ta (Co(Cororollalla) ) and and GenGeneraeral l MotMotorsors (Chevrolet Optra).

(Chevrolet Optra).

Tucson

Whil

While e TTerrerracan acan was was a a full-full-fledgfledged ed SUV, SUV, TTucson was ucson was a a mildmilder er versversion ion thatthat co

compmplelemementnted ed as as a a cacar, r, an an SUSUV V anand d an an MPMPVV. . BoBoth th ththe e prprododucucts ts wowoululdd therefor

therefore coe co-exist in Hyundai’s -exist in Hyundai’s portfolio.portfolio.

PERCEPTUAL MAPPING

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Perce

Perceptuaptual l mapmappingping is is a a grgraphaphicics s tetechchniniquque e usused ed by by mamarkrketeterers s ththatat at

attetempmpts ts to to vivisusualally ly didispsplalay y ththe e peperrceceptptionions s of of cucuststomomerers s or or popotetentntiaiall cu

custstomomerers. s. TTypiypicacalllly y ththe e poposisitition on of of a a prprododucuct, t, prproduoductct llininee, , brbranand, d, oror company is displayed

company is displayed relative to their competition.relative to their competition.

Perceptual maps can have any number of dimensions but the most common Perceptual maps can have any number of dimensions but the most common is

is twtwo o didimemensnsioionsns. . AnAny y momorre e is is a a chchalallelengnge e to to drdraw aw anand d coconfnfususining g toto interpret. The perceptual map below shows consumer perceptions of various interpret. The perceptual map below shows consumer perceptions of various automobiles

automobiles on on ththe e twtwo o didimemensnsioions ns of of spsporortitinenessss/c/cononseservrvatativive e anandd classy/affordable. This sample of consumers felt

classy/affordable. This sample of consumers felt PORSCHEPORSCHE was the sportiestwas the sportiest and classiest of the cars in the study (top right corner). They felt

and classiest of the cars in the study (top right corner). They felt MARUTHIMARUTHI was most practical

was most practical and conservative (bottom left corner).and conservative (bottom left corner).

Classy

Distinctive

Conservative

Sporty

Practical

Affordable

Ca

Cars rs ththat at arare e posposititioionened d clclosose e to to eaeach ch ototheher r arare e seseen en as as sisimimilalar r on on ththee relevant dimensions by the consumer. For example consumers see BENTLEY relevant dimensions by the consumer. For example consumers see BENTLEY and

and AUDAUDI I as as simsimilailarr. . TheThey y arare e cloclose se comcompetpetitoitors rs and and forform m a a comcompetpetitiitiveve

BM BM P P B B C C T T MARU MARU TA TA MERCE MERCE

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grouping. A company considering the introduction of a new model will look grouping. A company considering the introduction of a new model will look for an area on the map free from competitors. Some perceptual maps use for an area on the map free from competitors. Some perceptual maps use different size circles to indicate the sales volume or market share of the different size circles to indicate the sales volume or market share of the various competing products.

various competing products.

CONCLUSION:

Automobile Indus

Automobile Industry experts predict that by 2050 every try experts predict that by 2050 every 66thth _{car in the world will be}_{car in the world will be}

for Indians. for Indians.

By 2010 India will take over Germany in

By 2010 India will take over Germany in sales volumes and Japan by2012.sales volumes and Japan by2012.

The Indian automobile component industry is estimated to

The Indian automobile component industry is estimated to triple from USD 63 triple from USD 63 billionbillion to USD 190 billion within a span of four years by 2012.

to USD 190 billion within a span of four years by 2012.

Estimated turnover USD12 billion, plus components revenue USD 3 billion, this is Estimated turnover USD12 billion, plus components revenue USD 3 billion, this is the vastness of Indian automobile industry. Industry analyst predicts this industry to the vastness of Indian automobile industry. Industry analyst predicts this industry to touch 13000 billion mark by 2010, a cumulative growth of 9.5 percent annually. It is touch 13000 billion mark by 2010, a cumulative growth of 9.5 percent annually. It is said that for every Re 1 spent, the auto sector returns Re 2.24 to the Indian

said that for every Re 1 spent, the auto sector returns Re 2.24 to the Indian economy.

economy.

By 2010, India is expected to

By 2010, India is expected to witness over Rs 30000 crore of investment.witness over Rs 30000 crore of investment.

According to estimation the compound annual growth rate (CAGR) of Indian According to estimation the compound annual growth rate (CAGR) of Indian automobile sales will grow at 9.5% and touch a mark of 13008 million by 2010. automobile sales will grow at 9.5% and touch a mark of 13008 million by 2010.