Market overview
The automotive sector comprises
the Original Equipment
Manufacturers (OEMs) and auto
component manufacturers.
Globally, the automotive industry is
recognised as a key component
and driver of national economy.
The global automotive industry is
in the midst of a major structural
transformation -
* Among OEMs, global
conglomerates are emerging,
driven by mergers and alliances
among manufacturers (For
example: GM/Fiat/ Suzuki;
Ford/Volvo/Mazda).
* Component manufacturers, or
suppliers, are getting Tierised, with
Tier 1 suppliers taking on the role
of component aggregation and
module supply/assembly, and
component suppliers being
relegated to Tiers 2 or 3.
*
Relationships between OEMs
and suppliers (especially Tier 1s)
are becoming increasingly
collaborative.
These trends have affected the
Indian auto industry as well,
leading to a rapid transformation
of the industry over the last
decade or so. After the end of
licensing in 1993, the industry has
witnessed rapid growth in volumes
and capacity, and 17 new ventures
have come up in the last 10 years.
These include global giants such as
General Motors, Ford, Toyota,
Honda, Hyundai and Fiat. The
industry encompasses commercial
vehicles, multi-utility vehicles,
passenger cars, two wheelers, three
wheelers and auto components.
The domestic automobile
market has been growing at 14.2
per cent CAGR over the past 4
years (2000-01 to 2004-05), while
the auto components market has
been growing at 19.2 per cent
CAGR (2000-01 to 2003-04). The
industry (OEMs and suppliers
together) contributed nearly four
per cent to the country's GDP in
2003-04. The automotive sector
also offers significant employment
opportunities. It employs 0.45
million people directly and around
10 million people indirectly.
The industry's capabilities in
design, engineering and
manufacturing have been
recognised the world over, and
most automotive majors are
looking to increasingly source auto
components from India.
India is emerging as one of the
most attractive automotive
markets in the world, and is poised
to become a key sourcing base for
auto components. The table below
captures the highlights of the
sector in India that illustrates its
growing significance.
The industry structure spans all
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