The temporary setback in industrial activity due to general slowdown notwithstanding, India is still reckoned a vibrant industrial world power. Ranked the 19th largest exporter, the country registered the highest growth rate among developing nations during mid-2000s, thanks primarily to the growing number of middle class customers, abundant availability of skilled labour and a good inflow of foreign investments into different industry sectors. India’s industrial growth in the modern sense of the term originated precisely in 1991 with the globalisation compulsion for opening up of the economy. The Indian automotive industry, the lifeline of the economy as elsewhere, proved the real engine of growth attracting attention of almost all MNCs. The entry of Maruti signalled a thorough transformation of the automobile technology. This was followed by the foray of other foreign players into every segment of the auto sector by setting up operations alone or in association with their Indian counterparters. Today, India has emerged the second largest manufacturer of two-wheelers, the fifth in commercial vehicles and the seventh largest manufacturer of passenger cars in the world. A supplier-driven market having not more than a handful of vehicle models two decades ago, it now offers more than 160 models and variants by way of customer options. In PPP terms, the country is expected to be the third largest economy by 2020.
An investor-friendly automobile policy, a highly indigenised vehicle technology developed over the last few years and the special R&D initiatives by both automobile and component manufacturers have kept the sector in good stead. Nay, the overall encouraging performance of the industry was behind the formulation of the Automotive Mission Plan (AMP) by the Government, which envisages the auto sector’s annual turnover growth to $145 billion from the current $45-50 billion and its contribution to GDP shooting to 10 per cent from five per cent by 2016.
The targets fixed are within easy reach as can be inferred from the Indian auto industry’s comparatively quicker recovery from the worst-ever world recession of 2008 that destabilised the individual economies across the globe. Further, the production and sales figures released by SIAM are pointer to the industry potential for an earlier upswing, despite deterrents to expansion. The industry witnessed a 7.10 per cent growth in cumulative production of vehicles during April-July 2012. It turned out 17,46,840 vehicles in July 2012 as against 16,56,014 vehicles in July 2011. The overall growth in domestic sales also registered a 9.34 per cent growth during April-July 2012 over the previous year. All this confirms that India is still the best bet.