India Automotive

In the global market, the Indian automotive sector has carved a niche for itself. Major European and US automotive giants, such as BMW and Daimler Chrysler, are recognizing and giving due importance to the Indian vehicles and components. Increasing disposable incomes of the young professionals coupled with low EMI values are providing the required impetus and making these vehicles more affordable for the common masses. As the global players are largely investing on passenger vehicles, the Indian counterparts are trying very hard to be in the business by investing huge on R&D and working towards overall growth and efficiency.

There has been detailed necessary measure to make India the world's manufacturing hub. Furthermore, the Ministry of Heavy Vehicles has come forward with its plan for the period of 2006-2016 which is expected to Revamp the automobile industry and increase its turnover by fourfold. This mission plan would take into its consideration all the sectors of the society while giving more importance to the lower sections in rural India.

In the recent past, more than a dozen multi-national firms have shown their interest to enter the Indian territories and collaborated in Indian car manufacturers. To buy car either used cars or new cars; car owners have a number of options. There are car dealers that have car rentals and sell a car. It helps potential buyers to search cars as per the car prices.

While most of them have chosen to strike the right notes by forming joint ventures with the Indian firms, there are some like Hyundai and a few others which have decided to remain fully owned units.

Having an exponential growth potential, the Indian automotive industry is expected to witness more mergers between the auto component manufacturers and suppliers in the coming years. On the flip side, most of these new entrants might not enjoy the kind of relationship with suppliers and scale economies that Maruti does, so they have decided to keep aloof from waging a war with Maruti's $5,500 small car segment.

Rather they have shifted their focus on producing high end vehicles between the price ranges of $20,000 to $50,000. However, the toughest competition is expected to come from the mid-sized car segment (1300 cc and above), where many Indian and foreign automobile giants are planning to lock horns. Although the planned capacities of these companies exceed the projected demands and the cars are ranged competitively at nearly $12,000, the multinationals are surely betting on the growing disposable incomes of the Indian middle class.

For example, Daewoo's Cielo which is priced at $15000 and has been produced in association with DCM (an Indian firm), drew 76,000 advance bookings last year which is an indication of the growing demand that is taking its roots in the Indian automotive industry.