Presentation

On
“AUTOMOBILE SECTOR OF ECONOMY”

Presenter's
PRADEEP SAHU (18)
AMIT MAITHIL (19)
HARSHITA JAIN (20)
SALIL SHRIVASTAVA (23)
TUSHAR PHOPILI (40)
SUNIL PATIDAR (41)
SHAILESH PATEL (51)
POOJA GUPTA (53)
APOORVA KHARE (56)
KAMAL SEHWANI (59)
 Introduction
• It begins as early as 1769.

• The automobile sector is one of the key segments of the economy having
extensive forward and backward linkages with other key segments of the
economy.

• Indian Automobile sales growth rate would be 9.5 % by 2010.

• It contributes about 4 per cent in India's Gross Domestic Product (GDP) and 5
per cent in India's industrial production.

• India has a well developed, globally competitive Auto Ancillary Industry and
established automobile testing and R&D centers.

• India enjoys natural advantage and is among the lowest cost producers of steel
in the world.
KEY PLAYERS
 AUTOMOBILE INDUSTRY IN INDIA
• 9th largest automobile industry.

• 2nd largest two-wheeler market.

• 4th largest in Heavy Trucks.

• 2nd largest tractor manufacturer.

• Annual production of over 2.3 million units.

• Monthly sales of passenger cars in India 100,000 units. 

• 11th largest passenger car market and expected to become 7th largest by
2016.

• Sale of passenger cars in India at an average of 14.9% each year to touch

2.1 million marks by 2010.
 CURRENT SITUATION OF AUTOMOBILE SECTOR

• Economic slowdown affected automobile industry

• Overall automobile production went up by 3 per cent to reach 1.11-

crore.

• Exports increased by over 23 per cent to over 15-lakh.

• The domestic turnover of the sector stood at Rs. 2.19-lakh crore.

• Exports totaled at Rs. 31,782 crore, taking the total size of the industry
to Rs. 2.50-lakh crore during 2008-09.
GLOBALIZATION IN AUTOMOBILE SECTOR
• In 2008, Hyundai Motors alone exported 240,000 cars made in India.

• Nissan Motors plans to export 250,000 vehicles manufactured in its India

plant by 2011.

• Foreign auto assembly plants in India General Motors, Ford, Hyundai,

Honda, Suzuki, Nissan Motors, Toyota, Volkswagen, Audi, Skoda, BMW,
Fiat and Mercedes Benz.

• India has overtaken China in global auto exports of compact cars for 2009.

• In 2007, India was ranked as the 12th fastest growing market in the world.

• Presently, India is the 2nd largest two wheeler market in the world and 4 th
largest commercial vehicle market worldwide.
 Continue
• India is the 11th largest market in the passenger car segment globally
which is expected to become the 7th largest market by 2016.

• Tata is all set to take its world trucks to South Africa.

• Mahindra & Mahindra is taking its Scorpio to US.

• Tata is developing an European version of its ultra low cost car Nano.
 ADVANTAGES OF AUTOMOBILE SECTOR
• The fluctuating price of oil in the world market has helped in the sale of these new
vehicles as well as compact cars.

• People who once owned SUV’s have also replaced these vehicles with those that
have smaller engines.

• Annual contribution to the economic growth by 4% to the GDP and accounting for
about 5% of the total industrial output.

• Continuous investment in research & development has resulted in increased

productivity

• They contribute 60 % of global production but 25 % of India Production

• Automotive industry is that it has generated new jobs.

• The cost of labor is cheaper and there is a market for those vehicles in those
countries.
 FUTURE PROSPECT OF INDIAN AUTOMOBILE SECTOR

• Automobile industry expert predicts that by 2050 every sixth car

in the world will be for Indians.

• By 2010 India will take over Germany in sales volumes and Japan
by 2012.

• The Indian automobile component industry is estimated to triple

from USD 63 billion to USD 190 billion span of six years by 2012.

• Industry analysts predict this industry to touch USD 13000 million

mark by 2010, a cumulative growth of 9.5% annually.

• It is said that for every Re 1 spent, the auto sector returns Rs.
2.24 to the Indian economy.
 HOW ECONOMY LOOK AHEAD
• Automobile sector in India has good domestic and outer market to cater.

• With the increase in the population in India there will be huge demand of
passenger cars in future..

• It is forecasted that between the years 2008 till 2015 the

CAGR(Compound Annual Growth Rate) of Indian automobile will grow
around 10%.

• Huge demand of Indian automobile in other developing country in the

world. So there is good market outside India also.

• With the increase in the competition in the automobile sector, major

players are going to setup their R&D centers in India.

• Enter of the global players like Audi, BMW etc. it is a positive sign for
Indian automobile industry.
 CONCLUSION
• The Indian automobile sector is one of the key segments of the economy having
extensive forward and backward linkages with other key segments of the
economy.

• The forward linkage refers to its customer base, employment it provide and
backward linkage refers to its supplier to the industry.

• According to Ministry of Heavy Industries & Public Enterprise (Government of

India) automobile industry contributes about 4% in India’s GDP. These sectors
provide 4.5 lack of employment to the people of India.

• Due to rise in inflation there is a rise in the price of the vehicles by 3% to 4%

because the price of the raw material has gone up.

• Inflation affected the production and sale of vehicles low rate of margins of
dealers & financer.

• Due to rise in the fuel prices which can affect the growth of automobile sector.
The rise in the price of this thee fuel will create serious problem in future.
 SUGGESTION
• The government should make reduction in the fuel prices or they should give
subsidiary.

• To reduce the production cost the automobile maker firms can cut the jobs.

• With the entry of global competitors in the Indian automobile industry it has
result in advanced technologies in the production and production process which
has resulted in reducing the cost of production.

• With the development of alternative fuels like electricity, bio-fuel etc. it has result
in the evolution of new kind of car called hybrid cars. This will help to neutralize
the effect of high fuel price.

• Government should also take initiatives regarding tax rebate that can result in
the reduction in the price on the vehicles.

• India holds huge potential in the automobile sector including the automobile
component sector owing to its technological, cost and manpower advantage.
THANKS