Heavy Commercial Vehicles
Exports of Commercial vehicles are in full swing at the present moment. And to add fuel to recent growth in this sector, the Indian automobile companies have decided to extend their manufacturing capabilities along with their international counterparts. Hence, the recent boom in the Exports of Commercial Vehicles division is due to the newly improved network and infrastructure. The attractive financial packages that are being offered along with the improved infrastructure are an added advantage for the industry. The recent growth of the Indian economy and the upward trend of the Indian market is a very healthy signal for the export division.
However, a lot depends on the budget and its implications on the exports market. Thus making it very important for the key players of the Indian economy to take correct decision for its betterment.
It has always been noticed that the passenger car industry gets more recognition and focus in comparison to the Commercial Vehicle industry. However, going by the statistics we find that there has been a phenomenal growth in the sales of the Commercial Vehicles since 1998. The total sales of M&H Commercial Vehicles were 15,906 units in 2000 in comparison to the 12,949 units in 1998. In the same way, the total sales of Light Commercial Vehicles in 2000 were 8,642 units in comparison to 6,931 units in 1998. Even in the Multi Utility Vehicle Segment the sales have gone up from 13,400 units in 1998 to 17,194 units in 2000.
This transformation in the Commercial Vehicle industry came into effect from the mid 1990's. Earlier, the scenario was not stable at all, as there were only a few local companies dealing in this particular sector. However, as soon as the concept of globalization was introduced in India, this particular sector gained speed with the MNC's making Foreign Direct Investment in as early as 2002. Thus, making India a perfect destination for global outsourcing. This is mainly due to the cost effective environment and the technologically skilled personnel found here. The condition of the industry, the willingness of the country to invest and the skilled labor are the other few reasons behind the specified sector to flourish.
According to the Economic Survey of Indian Government, the automobile Industry has made a 15% growth in general and in particular the Commercial Vehicle sector made a growth of about 10%. The number of automobile manufacturing facilities in India has grown to nine for Commercial Vehicles as well. The Light Commercial Vehicles (LCVs) grew by more than 19% during 2005-06 as compared to 2004-05.
Though there has been a thrust in the domestic market, yet the export potential of the country has not been properly exploited yet. It's still an untapped market. Although some amount of progress is being made. However, Export of Commercial Vehicles increased by 36% to 40,581 units in the 2005-06 as compared to 2004-05. India is also the largest Tractor Manufacturing country in the world. It has produced 270,000 units in 2005-06.
According to the Commercial Vehicle Manufacturers of India, the growth in the recent past has been around 20 percent, and they predict that there will be phenomenal growth in this sector in the recent future. Their projection for the future is around 22 percent.
Almost all the Indian manufacturers are focusing their attention on South Asia, Middle East and Africa as potential markets for the finished products. The reason being, the demographic similarity between the manufacturing country and the potential markets.