Zipping ahead on the fast lane...

Catch us if you can!

While the developed automotive markets across the globe were struggling to come out of the slowdown blues, the vehicle production (read cars and commercial vehicles) in developing nations including Brazil, China, India, et al, continued with the winning momentum. All thanks to the easier availability of credit, lower interest rates, higher consumer confidence and gradual recovery witnessed in the industrial cycle that boosted the sales (and in turn production) in these countries.

Up, up and away...

Since independence the production of vehicles in India has grown exponentially, from 10,000 vehicles in 1950, to over 10 million by 2006. In fact, economic liberalisation in 1991 has served as a launch pad for the current growth. Though, it’s too early to interpret a trend, but India may well be on its way to see four-wheelers eat into the traditionally strong two-wheelers market.

We are not far behind either

From a small supplier catering to the domestic market only, the Indian auto-components industry has come a long way to emerge as one of the key auto components hubs in the world. As per ACMA, the turnover of the auto components industry was estimated at over $18 billion in FY2007-08, which is likely to touch $40 billion by FY2015-16.

A silver lining, for sure!

Further, government policies too have played a major role in the development automotive industry in India. Certainly, it’s policy decisions like the automatic approval for FDI up to 100% equity by government in 2002, which have led to a significant increase in foreign participation in India’s auto industry. In fact, FDI in Indian automotive industry has grown at a CAGR of 77% between FY2004-05 & FY2007-08.