An ambitious automotive mission plan (AMP) was launched in Delhi by PM Manmohan
Singh. The 25 point plan aims to convert India into a manufacturing and export hub
for small cars, multi-utility vehicles, two and three wheelers, tractors, and components.
The 10-year plan aims to generate investments of nearly $40 billion. The plan lays
emphasis on a rationalized tax structure, building new infrastructure, and export
promotion drives. The automobiles sector is expected to contribute 10 percent of
the country's gross domestic product (adding up to about $145 billion) by way of
revenues double the existing level by 2016.
Size
- The Auto Industry in India has witnessed very high growth rates. 8.6 million vehicles
produced in the 2004- 05. However, India still has low vehicle penetration, only
3 cars, and 50 two-wheelers per 1000 individuals.
Structure
- Auto Industry has a mix of large domestic private players viz. Tata, Bajaj, Hero
Honda.
- Major international players including Ford, Toyota, and General Motors have set
up manufacturing capacities in India.
Outlook & Potential
- Auto Market expected to reach the 15 million vehicles mark by 2010-11.
- Overall growth of over 12% p.a will have some segments that outperform: Passenger
Cars and Two Wheelers expected to be the latest growing segments Heavy trucks to
drive growth in commercial vehicles.
- India has several advantages making it an attractive destination for investment
in the automobile sector
- Low cost, high skill manpower with an abundance of engineering talent- the second
largest in the world.
- Opportunity to address the global auto market while leveraging the domestic market.
- Global majors including Hyundai and Suzuki and Honda have committed resources of
over $2 billion for capacity expansion and are already considering India as a global
hub for manufacture of small cars.
- Opportunity to set up R&D and Engineering centres.
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