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The Automotive industry is the key driver of any growing economy. A sound transportation system plays a pivotal role in a country’s rapid economic and industrial development. The well-developed Indian automotive industry ably fulfils this catalytic role by producing a wide variety of vehicles. The automobile industry comprises automobile and auto component sectors. It includes passenger cars; light, medium and heavy commercial vehicles; multi-utility vehicles such as jeeps, scooters, motorcycles, three-wheelers and tractors; and auto components like engine parts, drive and transmission parts, suspension and braking parts, and electrical, body and chassis parts.

India’s automotive industry is now worth $34 billion and expected to grow $145billion in another ten years. The Indian automotive industry is growing at a very high rate with sales of more than one million passenger vehicles per annum. The overall growth rate is 10-15 per cent annually. India is the world’s second largest manufacturer of two-wheelers, fifth largest manufacturers of commercial vehicles as well as largest manufacturer of tractors. It is the fourth largest passenger car market in Asia and home to the largest motorcycle manufacturer.

Major players in this sector include Tata, Mahindra, Daewoo Motor India, Hyundai Motors India and General Motors India, Maruti, Ashok Leyland, Bajaj, Hero Honda, Ford, Fiat and few other players.

The Indian auto components industry is worth $10 billion. Indigenous firms like Bharat Forge, Sundaram Fasteners, Minda Industries and Gabrial India Ltd. are in the limelight. There is a boom in the auto components segment because of strong demand and robust economy. Also, the industry has strong forward and backward linkages with almost every other engineering segment. The component production range includes engine parts 31%, drive transmission and steering parts 19%, suspension and braking parts 12%, electrical parts 10%, equipments 12%, body and chassis 9% and others 7%.

Indian companies are very optimistic. The Auto Components Manufacturers Association (ACMA) along with McKinsey has pegged domestic demand for components at $20-25 billion in 2015 from $1.4 billion in 2004-05. This would take the overall industry size to $40-45 billion by 2015 in India.

The Indian automotive industry has made rapid strides since delicensing witnessing the entry of several new manufacturers with state-of-the-art technology.

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