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May, 2011

Despite the fiscal slowdown worldwide, India had maintained its growth rate at a steady 8-8.5 per cent and the automobile industry has also grown in excess of 13 per cent over the last few years. With easy financing options and with the wide range of cars being launched frequently, the Indian automobile enthusiasts have never seen it better.

Recently, the President of the industry body Society of Indian Automobile Industry (SIAM), Pawan Goenka commented that the Indian Automobile Industry is expected to grow at the rate of 15 to 16 per cent in 2011. And this growth will be across the categories – from two wheelers and four wheelers to commercial vehicles.

According to a study by Booz & Company, a Global Management Consulting Company, the Indian Automobile industry will overtake the European market and is slated to become the world’s fourth largest by 2015 and will be selling almost 6 million units annually by 2020.

In the Automotive Mission Plan – 2006-2016 it is stated, ‘By 2016, India would emerge as the world’s seventh largest car producer (as compared to the eleventh largest currently) and retain 4th largest position in world truck manufacturing sector. Further, by 2016, the automotive sector would double its contribution to the country’s GDP from current levels of 5 per cent to 10 per cent. Its contribution to the manufacturing sector would rise to 30-35 per cent from the current level of 17 per cent. This is because the share of manufacturing in GDP is expected to go up to around 35 per cent from current level of 17 per cent by 2016’.

The Union Budget of 2011-12 was termed as a ‘Reform Oriented Budget’ by Dr Pawan Goenka, President, SIAM. Several reform initiatives including roadmap for Direct Taxes Code, Constitutional Amendment Bill for Goods & Services Tax (GST) which would be tabled in the current session of the Parliament and also pilot project across 11 states for implementation of IT towards GST introduction is positive for the automobile industry.


Most car brands have either come up with India specific models and/or have launched international models to satisfy the consumer’s enthusiasm for newer vehicles.

  • General Motors (GM) India plans to launch six new vehicles over the next two years in India at an investment to the tune of US$ 300 million. GM has invested over US$ 1 billion in India till date.
  • To meet the rising demand from the local market, Toyota Kirloskar Motors Ltd (TKML), the local subsidiary of the Japanese company, will invest US$ 66.45 million to enhance its capacity by 60,000 units in the next one year.
  • Mahindra & Mahindra Ltd (M&M) has begun work on its seventh tractor plant at Zaheerabad in Andhra Pradesh (AP). The plant with a proposed capacity of 100,000 units a year would entail an investment of US$ 66.97 million.
  • UK-based luxury and sports car maker Aston Martin has marked its entry into India with the launch of its entire range, which includes the V8 Vantage Coupe, V8 Vantage Roadster, V12 Vantage, DB9 Coupe, DB9 Volante, V8 Vantage S, Virage and the four door sports car Rapide.
  • British carmaker Bentley has launched a 4-seater coupe of its Continental GT luxury sedan with a price tag of US$ 4,31,290 (ex-showroom, Delhi). The company aims to cross the 100-units mark in the Indian market by 2012.
  • Daimler, the parent company of Mercedes Benz, is planning to launch a compact car in India based on the Smart range. France’s Renault and Japan’s Nissan will provide technical assistance to alter and modify the basic design of Daimler’s Smart two-seater car.
  • BMW India is planning to increase its dealership network in 2011. Under its Phase-1 expansion plan, the automobile manufacturer has set up 12 outlets in the country. In Phase-2, it has planned to increase it to 22 outlets from the present 18. The company inaugurated its new outlet OSL Prestige in Bhubaneswar recently.
  • Hyundai Motor India Ltd (HMIL) will soon be setting up a greenfield plant in India. The company will be spending US$ 89.1 million for this purpose. This plant will be utilised to build 1.5 lakh diesel engines.
  • Honda SIEL India Ltd is planning to launch their small car in India in 2011.
  • Renault recently launched its five-year plan which will focus on India and other emerging markets. The company will be launching the Koleos and Fluence in India in 2011 as well as an SUV in 2012.
  • Toyota has unveiled the 2011 Etios, which was specially developed for India. The five- door variant of the Etios will be launched in April by the company in 2012. Toyota will construct a second plant at its Bidali complex in Karnataka in an investment worth US$ 713.8 million for the manufacture of the Etios, with its two varieties, the sedan and the hatchback.
  • Mitsubishi is planning to introduce new models in India and tweak the existing ones. As part of the plan, the company will launch the new Lancer in India and Lancer Evo X and two SUV’s Pajero Sport and the 2010 Outlander.
  • Daimler India Commercial Vehicles plans an investment of US$ 981 million over a five year period in the manufacture of light, medium and heavy duty trucks at its plant in Oragadam.
  • Hero Honda and Ashok Leyland-Nissan are also planning new factories.