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Automobile Industry of India: Strengthening the Industrial Economy

By:
Naib Singh
Strengthening the Industrial Economy

Abstract
Industries are one of the key players for the growth of any industrial economy. Automobile industrial sector has the important position among the various industries in the structure up of any economy.  Automobile industry has the great role in the development of the industrial economy of India. This sector is contributing to the GDP up to 22 percent. According to the data published by the Deloitte, Indian automobile industry will attain the position of third largest market of the world in the year 2020. Indian automobile sector has manufactured 21.48 million vehicles in the year 2013-14.
This sector is providing the valuable support to the Indian economy by contributing to the large extent.
Key Words: Gross Domestic Product (GDP), Society of Indian Automobile Manufacturer (SIAM), Foreign Direct Investment (FDI), Gross Turnover.

Introduction
Industries have the great role for boosting the economy of any country by contributing to the Gross Domestic Product (GDP) significantly. Auto industry has the prominent place among the various industries in the industrial set up of any economy. In India Automobile industry has the great role in the development of the industrial economy as it is contributing to the GDP up to 22 percent. Indian automobile industry is growing at very fast rate as compared to the auto industries of many developed countries of the world. According to the data published by the Deloitte, Indian automobile sector will attain the position of third largest market of the world in the year 2020. Industrial economy is the lifeblood of any nation. Industrial development creates the employment, ensures the production of goods, increases the foreign trade, enhances the skills and motivation of the work force, fulfills the demand of consumers and other parties like industries and the Government and ensures the optimum utilization of resources available in the locality and remote areas. Indian automobile sector has manufactured 21.48 million vehicles in the year 2013-14.

Objective of the Study
The prime objective of this paper is to highlight the contribution of Indian automobile industry in the economic development. For this purpose the performance of this industrial sector has been considered by targeting the market share, production, domestic sales and export trends during the last five years. Results have been summarized in the conclusive view at the end of the paper.

Design and Methodology
The design of this paper is the descriptive in nature. Entire discussion has been divided in to various parts for giving due consideration to introduction of the problem, objectives and conclusion drawn on the basis of analysis. Secondary data have been used in this paper for the purpose by considering the on-line and other published sources. Figures and table have been presented for presentation of data.
Performance of the Indian Automobile Sector
Indian automobile industry has become a competitive sector all over the world. Automobile sector of the nation comprises four segments of the vehicles namely, Two Wheelers, Passenger vehicles, Commercial Vehicles and Three Wheelers.
Many Indian automobile manufacturers have become world leader in this industry. Major Indian automobile companies are Tata Motors Limited, Mahindra and Mahindra Limited, Maruti Suzuki India Limited, Hero MotoCorp Limited, Bajaj Auto Limited, Ashok Leyland Limited, Sundaram Clayton Limited, TVS Motor Company Limited, Eicher Motors Limited and Force Motors Limited. Maruti Suzuki India Limited has achieved the unique position of first rank all over the world by manufacturing one million vehicles in the year 1994. Another two wheeler leader namely Bajaj Auto Limited is maintaining the second position at the world level for manufacturing the vehicles. All these four areas of the automobile sector are manufacturing at large.
 
  
Source: SIAM
In the year 2015, the market share of two wheelers is 81 % which shows the progressive picture of this segment. Commercial and three wheelers manufacturers share the market in equal proportion of 3%. Two wheeler market is leading in India due to three main reasons like increasing interest of the two wheelers companies in the remote and rural areas, young population and growing middle class population in the country. Production of this sector is increasing day by day. In the year 2010-11 17892409 vehicles were produced and this production has increased in the year 2014-15 up to 23366246 vehicles.
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