THE AUTOMOTIVE INDUSTRY

The automotive industry is a wide range of companies and organizations

involved in the design, development, manufacturing, marketing,
and selling of motor vehicles, some of them are called automakers. It is one
of the world's most important economic sectors by revenue. The automotive
industry does not include industries dedicated to the maintenance of
automobiles following delivery to the end-user, such as automobile repair
shops and motor fuel filling stations.

The term automotive was created from Greek autos (self), and
Latin motivus (of motion) to represent any form of self-powered vehicle.
This term was proposed by Elmer Sperry.

History

Thomas B. Jeffery automobile factory in Kenosha, Wisconsin, c.1916

Citron assembly line in 1918

The automotive industry began in the 1890s with hundreds of manufacturers
that pioneered the horseless carriage. For many decades, the United
States led the world in total automobile production. In 1929, before
the Great Depression, the world had 32,028,500 automobiles in use, and the
U.S. automobile industry produced over 90% of them. At that time the U.S.
had one car per 4.87 persons After World War II, the U.S. produced about
75 percent of world's auto production. In 1980, the U.S. was overtaken by
Japan and became world's leader again in 1994. In 2006, Japan narrowly
passed the U.S. in production and held this rank until 2009, when China took
the top spot with 13.8 million units. With 19.3 million units manufactured in
2012, China almost doubled the U.S. production, with 10.3 million units,
while Japan was in third place with 9.9 million units. From 1970 (140
models) over 1998 (260 models) to 2012 (684 models), the number of
automobile models in the U.S. has grown exponentially.

Safety

Safety is a state that implies to be protected from any risk, danger, damage
or cause of injury. In the automotive industry, safety means that users,
operators or manufacturers do not face any risk or danger coming from the
motor vehicle or its spare parts. Safety for the automobiles themselves,
implies that there is no risk of damage.

Safety in the automotive industry is particularly important and therefore

highly regulated. Automobiles and other motor vehicles have to comply with
a certain number of norms and regulations, whether local or international, in
order to be accepted on the market. The standard ISO 26262, is considered
as one of the best practice framework for achieving automotive functional
safety.

In case of safety issues, danger, product defect or faulty procedure during

the manufacturing of the motor vehicle, the maker can request to return
either a batch or the entire production run. This procedure is called product
recall. Product recalls happen in every industry and can be production-
related or stem from the raw material.

Product and operation tests and inspections at different stages of the value
chain are made to avoid these product recalls by ensuring end-user security
and safety and compliance with the automotive industry requirements.
However, the automotive industry is still particularly concerned about
product recalls, which cause considerable financial consequences.

Economy

Around the world, there were about 806 million cars and light trucks on the
road in 2007, consuming over 980 billion litres (980,000,000 m3) of gasoline
and diesel fuel yearly. The automobile is a primary mode of transportation
for many developed economies. The Detroit branch of Boston Consulting
Group predicts that, by 2014, one-third of world demand will be in the
four BRIC markets (Brazil, Russia, India and China). Meanwhile, in the
developed countries, the automotive industry has slowed down. It is also
expected that this trend will continue, especially as the younger generations
of people (in highly urbanized countries) no longer want to own a car
anymore, and prefer other modes of transport. Other potentially powerful
automotive markets are Iran and Indonesia. Emerging auto markets already
buy more cars than established markets. According to a J.D. Power study,
emerging markets accounted for 51 percent of the global light-vehicle sales
in 2010. The study, performed in 2010 expected this trend to accelerate.
However, more recent reports (2012) confirmed the opposite; namely that
the automotive industry was slowing down even in BRIC countries. In the
United States, vehicle sales peaked in 2000, at 17.8 million units.
THE AUTOMOTIVE INDUSTRY IN INDIA

The automotive industry in India is one of the largest in the world

with an annual production of 23.96 million vehicles in FY (fiscal year)
201516, following a growth of 2.57 per cent over the last year. The
automobile industry accounts for 7.1 per cent of the country's gross domestic
product (GDP). The Two Wheelers segment, with 81 per cent market share,
is the leader of the Indian Automobile market, owing to a growing middle
class and a young population. Moreover, the growing interest of companies
in exploring the rural markets further aided the growth of the sector. The
overall Passenger Vehicle (PV) segment has 13 per cent market share.

India is also a prominent auto exporter and has strong export growth
expectations for the near future. In FY 201415, automobile exports grew by
15 per cent over the last year. In addition, several initiatives by the
Government of India and the major automobile players in the Indian market
are expected to make India a leader in the Two Wheeler (2W) and Four
Wheeler (4W) market in the world by 2020.

Market Size
The industry produced a total 14.25 million vehicles including PVs,
commercial vehicles (CVs), three wheelers (3W) and 2W in AprilOctober
2015, as against 13.83 in AprilOctober 2014, registering a marginal growth
of 3.07 per cent, year-to-year.

The sales of PVs grew by 8.51 per cent in AprilOctober 2015 over the same
period in the previous year. The overall CVs segment registered a growth of
8.02 per cent in AprilOctober 2015 as compared to same period last year.
Medium and Heavy Commercial Vehicles (M&HCVs) registered very
strong growth of 32.3 per cent while sales of Light Commercial Vehicles
(LCVs) declined by 5.24 per cent during AprilOctober 2015, year-to-year.

In AprilOctober 2015, overall automobile exports grew by 5.78 per cent.

PVs, CVs, 3Ws and 2Ws registered growth of 6.34 per cent, 17.95 per cent,
18.59 per cent and 3.22 per cent, respectively, in AprilOctober 2015 over
AprilOctober 2014.

Investments

Interior of Tata ConnectNext EV concept car at 2015 Geneva Motor Show

Tata Prima T1 truck at Buddh International Circuit

In order to keep up with the growing demand, several auto makers have
started investing heavily in various segments of the industry during the last
few months. The industry has attracted foreign direct investment (FDI)
worth US$13.48 billion during the period April 2000 to June 2015,
according to data released by Department of Industrial Policy and Promotion
(DIPP).

Some of the major investments and developments in the automobile sector in

India are as follows:

Global auto maker Ford plans to manufacture in India two families of

engines by 2017, a 2.2 litre diesel engine code-named Panther, and a 1.2
litre petrol engine code-named Dragon, which are expected to power
270,000 Ford vehicles globally.
The world's largest air bag suppliers Autoliv Inc, Takata Corp, TRW
Automotive Inc and Toyoda Gosei Co are setting up plants and
increasing capacity in India.
General Motors plans to invest US$1 billion in India by 2020, mainly to
increase the capacity at the Talegaon plant in Maharashtra from 130,000
units a year to 220,000 by 2025.
 US-based car maker Chrysler has planned to invest Rs 3,500 crore
(US$525 million) in Maharashtra, to manufacture Jeep Grand Cherokee
model.
Mercedes Benz has decided to manufacture the GLA entry SUV in India.
The company has doubled its India assembly capacity to 20,000 units per
annum.
Germany-based luxury car maker Bayerische Motoren Werke AG's
(BMW) local unit has announced to procure components from seven
India-based auto parts makers.
Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares
in France-based Peugeot Motorcycles (PMTC).

Government Initiatives

Isuzu's newly inaugurated manufacturing plant in 2016 at Sri City, Andhra

Pradesh, India

The Government of India encourages foreign investment in the automobile

sector and allows 100 per cent FDI under the automatic route.

Some of the major initiatives taken by the Government of India are:

 The Government of India aims to make automobile manufacturing the
main driver of "Make in India" initiative, as it expects the passenger
vehicles market to triple to 9.4 million units by 2026, as highlighted in
the Auto Mission Plan (AMP) 2016-26.
In the Union budget of 2015-16, the Government has announced plans to
provide credit of Rs 850,000 crore (US$127.5 billion) to farmers, which
is expected to boost sales in the tractors segment.
The government plans to promote eco-friendly cars in the countryi.e.
CNG-based vehicles, hybrid vehicles, and electric vehiclesand also to
make mandatory 5 per cent ethanol blending in petrol.
The government has formulated a Scheme for Faster Adoption and
Manufacturing of Electric and Hybrid Vehicles in India, under the
National Electric Mobility Mission 2020, to encourage the progressive
introduction of reliable, affordable, and efficient electric and hybrid
vehicles into the country.
The Automobile Mission Plan (AMP) for the period 20062016,
designed by the government is aimed at accelerating and sustaining
growth in this sector. Also, the well-established Regulatory Framework
under the Ministry of Shipping, Road Transport and Highways, plays a
part in providing a boost to this sector.[3]
History

A pre-Independence car showroom in Secunderabad

Indian Royalty were one of the largest buyers of luxury cars during pre-
Independence British India

Kolkata street traffic in 1945

In 1897, the first car ran on an Indian road. Through the 1930s, cars were
imports only, and in small numbers.

An embryonic automotive industry emerged in India in the 1940s. Hindustan

Motors was launched in 1942, long-time competitor Premier in 1944,
building Chrysler, Dodge, and Fiat products respectively.[4] Mahindra &
Mahindra was established by two brothers in 1945, and began assembly
of Jeep CJ-3A utility vehicles. Following independence in 1947, the
Government of India and the private sector launched efforts to create an
automotive-component manufacturing industry to supply to the automobile
industry. In 1953, an import substitution programme was launched, and the
import of fully built-up cars began to be restricted.

1947-1970

The 1949 Hindustan 10 built by Hindustan Motors under license from

Morris Motors, UK

The Hindustan Ambassador dominated India's automotive market from the

1960s until the mid-1980s and was manufactured till 2014
Fiat 1100D, built under license by Premier Automobiles later re-christened
'Premier Padmini' was the Ambassador's only true competitor

The 1952 Tariff Commission

In 1952, the government appointed the first Tariff Commission, one of

whose purposes was to come out with a feasibility plan for the
indigenization of the Indian automobile industry. In 1953, the commission
submitted their report, which recommended categorizing existing Indian car
companies according to their manufacturing infrastructure, with licensed
capacity to manufacture a certain number of vehicles, with capacity
increases allowable, as per demands, in the future. The Tariff Commission
recommendations were implemented with new policies that would
eventually exclude companies that only imported parts for assembly, as well
as those with no Indian partner. In 1954, following the Tariff Commission
implementation, General Motors, Ford, and Rootes Group, which had
assembly-only plants in Mumbai, decided to move out of India.[5]

The Tariff commission policies, including similar restrictions that applied to

other industries, came to be known as the "license raj", which proved to be
the greatest undoing of the Indian automotive industry, where bureaucratic
red tape ended up causing demand to outstrip supply, with month-long
waiting periods for cars, scooters, and motorcycles.

Passenger Cars

Hindustan Motors, Calcutta - technical collaboration with Morris

Motors to manufacture Morris Oxford models that would later become
HM Ambassador.
 Premier Automobiles, Bombay - technical collaboration with Chrysler to
manufacture Dodge, Plymouth and Desoto models and with Fiat to
manufacture the 1100D models which would later with Premier
Padmini range.
Standard Motor Products of India, Madras - technical collaboration
from Standard-Triumph to manufacture Standard Vanguard, Standard 8,
10 and later Standard Herald.

Utility and Light Commercial Vehicles

Vehicle Factory Jabalpur - started manufacturing Jonga Light Utility

Vehicles and Vahan 1 Ton (Nissan 4W73 Carriers) in India, under
license from Nissan of Japan. They were the main troop carriers of
the Indian Armed Forces and much powerful than any other vehicle of
their class.
Mahindra & Mahindra, Bombay - technical collaboration with Willys to
manufacture CJ Series Jeep.
Bajaj Tempo, Poona now Force Motors - technical collaboration
with Tempo (company) to manufacture Tempo Hanseat, a three-wheeler
and Tempo Viking and Hanomag, later known as Tempo Matador in
India.
Standard Motor Products of India - technical collaboration
from Standard has licence to manufacture the Standard Atlas passenger
van with panel van and one-tonne one tonne pickup variants.
Medium and Heavy Commercial Vehicles

Vehicle Factory Jabalpur - started manufacturing Shaktiman trucks with

technical assistance from MAN SE of Germany. The trucks were the
main logistics vehicle of the Indian Army with several specialist variants.
VFJ still is the sole supplier of B vehicles to the Indian Armed Forces.
Heavy Vehicles Factory - was established in 1965 in Avadi,
near Chennai to produce tanks in India. Since its inception, HVF has
produced all the tanks of India, including Vijayanta,
Arjun, Ajeya, Bhishma and their variants for the Indian Army. HVF is
the only tank manufacturing facility of India.
Tata Motors, Poona, then known as TELCO - technical collaboration
with Mercedes Benz to manufacture medium to heavy commercial
vehicles both Bus and Trucks.
Ashok Motors, later Ashok Leyland, Madras - technical collaboration
with Leyland Motors to manufacture medium to heavy commercial
vehicles both Bus and Trucks. Ashok Motors also discontinued
its Austin venture formed in 1948 to sell Austin A40 and retooled the
factory to make trucks and buses.
Hindustan Motors - technical collaboration with General Motors to
manufacture the Bedford range of medium lorry and bus chassis.
Premier Automobiles - technical collaboration with Chrysler to
manufacture the Dodge, Fargo range of medium lorry, panel vans, mini-
bus and bus chassis.
Simpsons & Co, Madras - part of Amalgamations Group (TAFE
Tractors)- technical collaboration with Ford to manufacture medium
lorry and bus chassis, but did not utilise that option until the 1980s.
Scooters, Mopeds and Motorcycles

The Vespa 150 Sprint

known as Bajaj Chetak, by Bajaj became the largest sold scooter in the
world

Many of the two-wheelers manufacturers were granted licenses in the

early 1960s, well after the tariff commission was enabled.
Royal Enfield (India), Madras - technical collaboration with Royal
Enfield, UK to manufacture the Enfield Bullet range of motorcycles.
Bajaj Auto, Poona - technical collaboration with Piaggio, Italy to
manufacture their best selling Vespa range of scooters and three wheelers
with commercial option as well.
Automobile Products of India, Bombay (Better known for API Lambretta
- technical collaboration with Innocenti of Milan, Italy to manufacture
their Lambretta range of mopeds, scooters and three-wheelers. This
company was actually the Rootes Group car plant that was bought over
by M. A. Chidambaram family.
Mopeds India Limited, Tirupathi - technical collaboration
with Motobcane, France to manufacture their best
selling Mobylette mopeds.
 Escorts Group, New Delhi - technical collaboration with CEKOP of
Poland to manufacture the Rajdoot 175 motorcycle whose origin
was DKW RT 125
Ideal Jawa, Mysore - in technical collaboration with CZ - Jawa of
Czechoslovakia for its Jawa and Yezdi range of motorcycles.
1970 to 1983

However, growth was relatively slow in the 1950s and 1960s, due to
nationalisation and the license raj, hampered the growth of Indian private
sector.

The beginning of the 1970s saw some growth potential and most of the
collaboration license agreements came to an end but with option to continue
manufacturing with renewed branding. Cars were still meant for the elite and
Jeeps were largely used by government organizations and some rural belts.
In commercial vehicle segments some developments were made by the end
of the decade to cater improved goods movements. The two-wheeler
segment remained unchanged except for to increased sales in urban among
middle class. But more fillip was target towards farm tractors as India was
embarking on a new Green Revolution. More Russian and eastern bloc
imports were done to increase the demand.

But after 1970, with restrictions on the import of vehicles set, the automotive
industry started to grow; but the growth was mainly driven by tractors,
commercial vehicles and scooters. Cars still remained a major luxury item.
In the 1970s, price controls were finally lifted, inserting a competitive
element into the automobile market.[6] However, by the 1980s, the
automobile market was still dominated by Hindustan and Premier, who sold
superannuated products in fairly limited numbers. During the eighties, a few
competitors began to arrive on the scene.

The OPEC oil crisis saw increase need to installing or redesign some vehicle
to fit diesel engines on medium commercial vehicle. Until the early 1970s
Mahindra Jeeps were on Petrol and Premier commercial vehicles had Petrol
model options. The Defence sector too had most trucks on Pertol engines.

1984 to 1992

First generation Maruti 800 launched in 1984

From the end of the 1970s to the beginning of the 1980s saw no new models
but the country continued with 2 decade old designs forcing government to
encourage and let more manufacturers into fray.

In 1984, the then Prime Minister of India, Indira Gandhi established

the Ordnance Factory Medak, near Hyderabad. It started
manufacturing Infantry Combat Vehicles christened as Sarath, the backbone
of India's mechanised infantry. OFMK is still the only manufacturing facility
of ICVs in India. To manufacture the high-power engines used in ICVs and
main battle tanks, Engine Factory Avadi, near Chennai was set in 1987. In
1986, to promote the auto industry, the government established the Delhi
Auto Expo. The 1986 Expo was a showcase for how the Indian automotive
industry was absorbing new technologies, promoting indigenous research
and development, and adapting these technologies for the rugged conditions
of India. The nine-day show was attended by then Prime Minister Rajiv
Gandhi.

Post-1992 liberalisation

Tata Indica, launched in 1997

Mahindra Scorpio was launched in 2001

Maruti Suzuki Swift Dzire and its hatchback version are the largest selling
cars in recent years in India
Eventually multinational automakers, such as, Suzuki and Toyota of Japan
and Hyundai of South Korea, were allowed to invest in the Indian market,
furthering the establishment of an automotive industry in India. Maruti
Suzuki was the first, and the most successful of these new entries, and in
part the result of government policies to promote the automotive industry
beginning in the 1980s. As India began to liberalise its automobile market in
1991, a number of foreign firms also initiated joint ventures with existing
Indian companies. The variety of options available to the consumer began to
multiply in the nineties, whereas before there had usually only been one
option in each price class. By 2000, there were 12 large automotive
companies in the Indian market, most of them offshoots of global
companies.

Slow export growth

Exports were slow to grow. Sales of small numbers of vehicles to tertiary

markets and neighbouring countries began early, and in 1987 Maruti Suzuki
shipped 480 cars to Europe (Hungary). After some growth in the mid-
nineties, exports once again began to drop as the outmoded platforms
provided to Indian manufacturers by multinationals were not
competitive.[9] This was not to last, and today India manufactures low-priced
cars for markets across the globe. As of 18 March 2013, global brands such
as Proton Holdings, PSA Group, Kia, Mazda, Chrysler, Dodge and Geely
Holding Group were shelving plans for India due to the competitiveness of
the market, as well as the global economic crisis.
Emission norms

In 2000, in tune with international standards to reduce vehicular pollution,

the central government unveiled standards titled "India 2000", with later,
upgraded guidelines to be known as Bharat stages. These standards are quite
similar to the stringent European standards, and have been implemented in a
phased manner, with the latest upgrade being implemented in 13 cities and,
later, in the rest of the nation. Delhi (NCR), Mumbai, Kolkata, Chennai,
Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Lucknow, Solapur
, and Agra are the 13 cities where Bharat Stage IV has been imposed while
the rest of the nation is still under Bharat Stage III.

Local manufacture encouraged

India levies an import tax of 125% on electric cars, while the import tax on
components such as gearboxes, airbags, drive axles, is 10%. Therefore, the
taxes encourage cars to be assembled in India rather than be imported as
completely built units.

Manufacturing facilities

The majority of India's car manufacturing industry is evenly divided into

three "clusters". Around Chennai is the southernmost and largest, with a
35% revenue share, accounting for 60% of the country's automotive exports,
and home of the operations of Heavy Vehicles Factory, Engine Factory
Avadi, Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan
Motors, Daimler, Caparo, Mini, and Datsun.
Near Mumbai, Maharashtra, along the Chakan corridor near Pune, is the
western cluster, with a 33% share of the market. Audi, Volkswagen,
and Skoda are located in Aurangabad. Mahindra and Mahindra has an SUV
and engine assembly plant at Nashik. General Motors, Tata
Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat, and Force
Motors have assembly plants in the area.

The northern cluster is around the National Capital Region, and contributes
32%. Gurgaon and Manesar, in Haryana, are where the country's largest car
manufacturer, Maruti Suzuki, is based.

An emerging cluster is the state of Gujarat, with a manufacturing facility

of General Motors in Halol, and a facility for Tata Nano at their plant in
Sanand. Ford, Maruti Suzuki, and Peugeot-Citroen plants are also planned
for Gujarat.

Kolkata with Hindustan Motors (inactive), Noida with Honda, and

Bengaluru with Toyota are other automotive manufacturing regions around
the country.
Exports

Mahindra Scorpio in service with Italy's CNSAS.

India's automobile exports have grown consistently and reached $4.5 billion
in 2009, with the United Kingdom being India's largest export market,
followed by Italy, Germany, Netherlands, and South Africa.

According to the New York Times, India's strong engineering base and
expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in
the expansion of manufacturing facilities of several automobile companies
like Hyundai, Nissan, Toyota, Volkswagen, and Maruti Suzuki.

In 2008, South Korean multinational Hyundai Motors alone exported

240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles
manufactured in its India plant by 2011. Similarly, US automobile
company, General Motors announced its plans to export about 50,000 cars
manufactured in India by 2011.

In September 2009, Ford Motors announced its plans to set up a plant in

India with an annual capacity of 250,000 cars, for US$500 million. The cars
will be manufactured both for the Indian market and for export. The
company said that the plant was a part of its plan to make India the hub for
its global production business. Fiat Motors announced that it would source
more than US$1 billion worth auto components from India.
A Tata Safari on display in Pozna, Poland.

In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest

exporter of cars after Japan (1.77m), Korea (1.12m) and Thailand (0.26m).

In July 2010, The Economic Times reported that PSA Peugeot Citron was
planning to re-enter the Indian market and open a production plant in
Andhra Pradesh that would have an annual capacity of 100,000 vehicles,
investing 700M in the operation.[88] PSA's intention to utilise this
production facility for export purposes however remains unclear as of
December 2010.

The Maruti Ertiga, a model exported by Maruti Suzuki, India.

In recent years, India has emerged as a leading center for the manufacture of
small cars. Hyundai, the biggest exporter from the country, now ships more
than 250,000 cars annually from India. Apart from Maruti Exports'
shipments to Suzuki's other markets, Maruti Suzuki also manufactures small
cars for Nissan, which sells them in Europe. Nissan will also export small
cars from its new Indian assembly line. Tata Motors exports its passenger
vehicles to Asian and African markets, and is preparing to sell electric cars
in Europe in 2010. The firm is planning to sell an electric version of its low-
cost car the Tata Nano in Europe and in the U.S. Mahindra & Mahindra is
preparing to introduce its pickup trucks and small SUV models in the U.S.
market. Bajaj Auto is designing a low-cost car for Renault Nissan
Automotive India, which will market the product worldwide. Renault Nissan
may also join domestic commercial vehicle manufacturer Ashok Leyland in
another small car project.[89] While the possibilities for the Indian
automobile industry are impressive, there are challenges that could thwart
future growth. Since the demand for automobiles in recent years is directly
linked to overall economic expansion and rising personal incomes, industry
growth will slow if the economy weakens.

Electric vehicle and Hybrid vehicle (xEV) industry[edit]

During April 2012, the Indian government planned to unveil the road map
for the development of domestic electric and hybrid vehicles (xEV) in the
country.[195] A discussion between the various stakeholders, including
Government, industry, and academia, was expected to take place during 23
24 February.[195] The final contours of the policy would have been formed
after this set of discussions. Ministries such as Petroleum, Finance, Road
Transport, and Power are involved in developing a broad framework for the
sector. Along with these ministries, auto industry executives, such as Anand
Mahindra (Vice Chairman and Managing Director, Mahindra & Mahindra)
and Vikram Kirloskar (Vice-Chairman, Toyota Kirloskar), were involved in
this task.[195] The Government has also proposed to set up a Rs 740 crore
research and development fund for the sector in the 12th five-year plan
during 2012-17. The idea is to reduce the high cost of key imported
components such as the battery and electric motor, and to develop such
capabilities locally.

Electric car manufacturers in India

Ajanta Group.
Hero Electric.
Mahindra.
REVA now Mahindra Reva Electric Vehicles.
Tara International.
Tata Motors.

Defunct motor vehicle manufacturers of India

Automobile Products of India or API - founded in 1949 at Bombay (now

Mumbai), by the British company Rootes Group, and later bought over
by M. A. Chidambaram of the MAC Group from Madras (now
Chennai). The company manufactured Lambretta scooters, API Three
Wheelers under licence from Innocenti of Italy and Automobile
ancillaries, notably Clutch and Braking systems. API's registered offices
were earlier in Mumbai, later shifted to Chennai, in Tamil Nadu. The
manufacturing facilities were located in Mumbai and Aurangabad in
Maharashtra and in Ambattur, Chennai. The company has not been
operational since 2002.
 Escorts Yamaha - in 1984 Escorts formed a joint venture with Yamaha to
manufacture motorcycles. In 2008 became India Yamaha Motor.
Hero Motors is a former moped and scooter manufacturer based in Delhi,
India. It is a part of multinational company Hero Group, which also
currently owns Hero Motocorp (formerly Hero Honda) and Hero Cycles,
among others. Hero Motors was started in the 1960s to manufacture
50 cc two-stroke mopeds but gradually diversified into making larger
mopeds, mokicks and scooters in the 1980s and the 1990s. Noteworthy
collaborators and technical partners were Puch of Austria
and Malaguti of Italy. Due to tightening emission regulations and poor
sales, Hero motors have discontinued the manufacture of all gasoline
powered vehicles and transformed itself into an electric two-wheeler and
auto parts manufacturer.
Ideal Jawa - motorcycle company based in Mysore, sold licensed Jawa
and Z motorcycles beginning in 1960 under the brand name Jawa and
later Yezdi.
Kinetic Honda - a joint venture between Kinetic Engineering Limited,
India and Honda Motor Company, Japan. The JV operated during 1984 -
1998, manufacturing 2-stroke scooters in India. In 1998, the joint venture
was terminated after which Kinetic Engineering continued to sell the
models under the brand name Kinetic until 2008[203] when the interests
were sold to Mahindra.
 Mopeds India Limited - produces the Suvega range of Mopeds under
technical collaboration with Motobcane of France.
Standard - produced by Standard Motor Products in Madras from 1949 to
1988. Indian Standards were variations of vehicles made in the U.K.
by Standard-Triumph. Standard Motor Products of India Ltd. (SMPI)
was incorporated in 1948,[204] and their first product was the Vanguard,
which began to be assembled in 1949. The company was dissolved in
2006 and the old plant torn down.
ADVANTAGES AND DISADVANTAGES OF
AUTOMATION IN MANUFACTURING

In the past 20 years, technology has changed the nature of manufacturing. In

the old days, manufacturing and fabrication were all done by hand by
people. Now that computers and technology have penetrated the industry,
automation has become the competitive advantage in todays manufacturing
world. Automation has allowed for companies to mass produce products at
outstanding speeds and with great repeatability and quality. Automation has
become a determining factor in whether or not a company will remain
competitive within the manufacturing industry. Although automation is
constantly setting the standards for the industry and has many advantages,
there are also some negative aspects about automation.

Automation Advantages

Reduction in production time having a machine that is automated

definitely speeds up the production time since no thinking is needed by
the machine, there is better repeatability, and less human error.
Increase in accuracy and repeatability when an automated machine is
programmed to perform a task over and over again, the accuracy and
repeatability compared to an employee is far greater.
Less human error no one is perfect, and we are all prone to making
mistakes. Which is why a machine that performs repeated tasks is less
likely to make mistakes than an employee.
 Less employee costs by adding automated machines to an operation,
means less employees are needed to get the job done. It also indicates
less safety issues, which leads to financial savings. With having less
employees, there are numerous costs that are diminished or reduced
such as payroll, benefits, sick days, etcetera.
Increased safety having automated machines means having less
employees who perform tasks that can be dangerous and prone to
injury, which can make the work environment safer.
Higher volume production investing in automated equipment creates
a valuable resource for large production volumes, which in turn, will
increase profitability.

Automation Disadvantages

Less versatility by having a machine that can perform a certain task

limits to the flexibility and variety of tasks that an employee could do.
More pollution different types of machines operate using motor
which may require gases or chemicals in order to operate. This can
cause an increase in pollution in the workplace.
Large initial investment automated machines can be one of the most
costly operating costs for a company. With automated machines
running anywhere between thousands and millions of dollars
depending on the type and degree of automation.
Increase in unemployment by increasing the amount of automation,
there are less employees required causing high unemployment rates.
 Unpredictable costs there can be several unpredictable costs that may
exceed the actual cost saved by the automation itself. Some of these
costs could include research and development costs of automating a
process, preventative maintenance costs, and the cost of training
employees to operate automated machines.
While automation has become a resource for remaining competitive in the
manufacturing industry, there are definitely some factors to be considered in
order to be competitive and to get a return on the investment. Depending on
the operations, automation may or may not be a good fit. If it is a small
operation with low production quantities, the initial investment of
purchasing an automated machine would not be economical. On the other
hand, if the operation has a larger facility with many employees on the shop
floor two fabricate medium to large runs, automated machines would be
better suited.
Here at Vista Industrial Products, Inc., we have had the opportunity to invest
in automation to increase our productivity, repeatability, quality, and provide
shorter lead times. Due to the size of our operation and state-of-the-art
manufacturing facility, automation has been a great fit for our business
model. We have a great ratio of automation and employees to cater to our
customers needs. Given that we can fabricate low mix/high volume and
high mix/low volume runs for our customers, we have the flexibility we
need to get the job done.
SWOT analysis of Automobile industry
Automobiles like Cars, bikes and public transport systems are one of the
most important building blocks for Society. Cars can be status symbol, they
can be necessary transport, they can be for sport and whatnot. So what are
the strengths, weaknesses, opportunities and threats in the automobile
industry?

Strengths in the SWOT analysis of Automobile industry

1. Evolving industry : Automobiles represent freedom and economic

growth. Automobiles allow people to live, work and travel in ways
that were unimaginable a century ago. Automobiles provides access
to markets, to doctors, to jobs. Nearly every automobile trip ends
with either an economic transaction or some other benefit to the
quality of life.
2. Continuous product innovation & technological advancement
: With the advent of E-vehicles & alternative fuel such as Shell gas,
CNG and others, Automobile Companies are increasing R & D
expenditure to drive the next phase of growth through use of
renewable sources of energy which may be solar, wind etc.
3. Growth shifting to Asian markets : Although American &
European market is the pulse of this Industry, but the focus is
shifting to developing markets like China, India & other Asian
nations because of the rise in disposable income, changing lifestyle
& stable economic conditions.
4. Increasing demand of VFM vehicles : Intense competition in the
matured/developed markets has forced automobile manufacturers to
target developing economies. But these developing economies have
high demand for VFM products (value for money). In the
automobile industry, VFM products would be fuel efficient, high
mileage vehicles because majority of customers in these nations
prefer vehicles for commuting. On the other hand, developed nations
need is of vehicles for interstate travelling, and high speed vehicles
suitable for long route with high engine power.
5. Increase in demand of luxury commercial vehicles : Companies
like VOLVO, Daimler/Chrysler, Bharat Benz are betting high & are
targeting the developing nations due to increase in demand of
Luxury public transportation system.
6. Manufacturing facilities in Asian nations to control cost : In
order to control cost & to manage shrinking margins automobile
companies like Harley, Volvo, Bharat benz etc. are building their
manufacturing facilities in developing nations like India, China
because these nations have cheap workforce, are high in resources &
are nearer to developed economies. These are classic conditions of
an emerging market.
Weaknesses in the SWOT analysis of Automobile industry

1. Cars recalled : Controversies relating to recalling vehicles on

account of some technical dis-functionality or non-abidance to govt.
led rules is becoming very common.
2. Bargaining power of consumers : Over the last 3-4 decades the
automobile market has shifted from demand to supply market.
Availability of large number of variants, Stiff competition between
them, and long list of alternatives to choose from has given power to
customers to choose whatever they like.
3. Growth rate of Automobile industry is the in the hands of the
government due to regulations like excise duty, no entry of outside
vehicles in the state, decreasing number of validity of registration
period & volatility in the fuel prices. These factors always affect the
growth of the industry.
Opportunities in the SWOT analysis of Automobile industry

1. Introducing fuel-efficient vehicles : Optimization of fuel-driven

combustion engines and cost efficiency programs are good
opportunities for the automobile market. Emerging markets will be
the main growth drivers for a long time to come, and hence fuel
efficient cars are the need of the hour.
2. Strategic Alliances : Making strategic alliances can be a smart
strategy for Automobile companies. By using specialized
capabilities & partnering with other companies, they can
differentiate their offerings.
3. Changing lifestyle & customer groups : Three powerful forces are
rolling the auto industry. Shift in consumer demand, expanded
regulatory requirements for safety and fuel economy, and the
increased availability of data and information. Also with the increase
in nuclear families there has been increase in demand of two-
wheelers & compact cars and this will grow further.
4. Market expansion : Entering new markets like Asian & BRIC
nations will result in upsurge in demand of vehicles. After these
markets, other markets are likely to emerge soon.
5. OEM priorities : Given the increase in electronic content, OEMs
need to collaborate with suppliers and experts outside the traditional
auto industry. Accomplishing this will require changes in the way
OEMs function. OEMs will be looking to their top suppliers to co-
invest in new global platforms & this will be the driving force in the
future.
 Threats in the SWOT analysis of Automobile industry

1. Intense Competition : Presence of such a large number of players

in the Automobile industry results into extensive competition, every
company eating into others share leaving little scope for new
players.
2. Volatility in the fuel Prices : At least for the passenger segment
fluctuations in the fuel prices remains the determining factor for its
growth. Also government regulations relating the use of alternative
fuels like CNG. Shell gas is also affecting the inventories.
3. Sluggish Economy : Macroeconomic uncertainty, Recession, un-
employment etc. are the economic factors which will daunt the
automobile industry for a long period of time.
4. High fixed cost and investment in R & D : Due to the fact that
mature markets are already overcrowded, industry is shifting
towards emerging markets by building facilities, R & D centers in
these markets. But the ROI out of these decisions is yet to be
capitalized.
5 CHALLENGES THE AUTO INDUSTRY MUST
OVERCOME TO MAKE CONNECTED CARS
MAINSTREAM

Robert Acker is GM of Aha Radio, a business unit of HARMAN

International, the leading global infotainment group. For 15 years, Acker has
been a pioneering entrepreneur in the connected car and infotainment space
at companies including Dash Navigation, XM Satellite Radio and Rhapsody.

The American driver spends countless hours every day sitting in front of his
car radio, a device that first appeared in the 1930s. While car infotainment
systems, as they are called today, now have features like navigation and
multichannel audio, the entertainment content hasnt fundamentally changed
in these past 80 years. It is still focused on playing content that is either
broadcast (via AM, FM, satellite or HD) or brought in (via 8-track, cassette,
CD, or now MP3). The current generation of digerati will expect more from
their in-car content.

Back at the 2007 Consumer Electronics Show, Ford and Microsoft took the
stage and announced Ford SYNC, which forced the entire industry to get
serious about mobile phone integration for drivers. Now five years later,
CES is expecting record participation from automakers with the "connected
car" as a major theme. Once again there is a lot of anticipation about the car
joining people's connected lives, and automakers are racing to safely deliver
web content to the drivers seat.
Some auto manufacturers will demonstrate the use of online data to augment
onboard tech an evolutionary approach if there ever was one. Others have
experimented with copying mobile interfaces by creating app springboards
in their vehicles, but you cant take a two-foot mobile phone interface, put
new lipstick on it and expect people to use it at 65 mph. (Imagine a scenario
where all you have to do to change content is close a podcast app, slide
over two screens, find and open a music service app, navigate through its
interface, and select play to hear a station you like. Oh, and you have to
drive in traffic at the same time.)

A fundamental problem is that the automotive world remains in a completely

different and distant world from what is happening on the web. In Silicon
Valley it is all about launching beta versions of your product or service and
then constantly tweaking based on real consumer feedback using agile
development processes. The automotive world has to design products that
will launch in three years and last for 10. And six years from now, it will
also have to compete with the iPhone 10, which the driver will have within
easy reach of the steering wheel. Put another way, if an auto manufacturer
had begun working on social networking site integration several years ago,
they would just now be getting ready to launch a MySpace feature today.

These challenges are not insurmountable. Instead, they highlight the

opportunity to fundamentally change the experience for drivers and finally
bring in-car media consumption into the 21st century. However, in order for
this to happen and truly become a mass-market solution, there are five key
things that must take place.
1. Rethink the User Experience

Most existing car stereo interfaces arent very different from the first radios
of the 1930s. (Can someone please tell me why preset buttons still have to
exist in groups of six?) They dont support personalization, interactivity, and
the type of content that is now available on the web. Walter Isaacsons best
selling biography of Steve Jobs describes how Jobs reinvented entire
industries with revolutionary new products by figuring out what people want
before the people figure it out themselves. There is a tremendous
opportunity for someone to do that today in the automobile. However,
evolutionary thinking like adding connected content to the existing
interface will never get us there. Revolutionary (not evolutionary)
thinking will be required to capitalize on the driver-centric in-car experience.

2. Design for Safety

Making these systems safe to use in the car is critical. The path to safety is
not through lock-outs drivers will find a way around that. The path to
safety is not through legislation laws are easy to write and hard to
enforce. The path to safety must be through great design.

To curb driver distraction, the auto industry must design user interfaces so
good that consumers dont even want to reach for their phones or feel the
need to take their eyes or brains off the road. Think about how easy it is to
change between radio station presets using steering wheel buttons. This
should be the standard that companies strive to emulate. It is also important
to pick the right content so that a drivers focus can remain on the road.
There is a world of difference between listening to a customized morning
news update (with the ability to pause, forward, and reverse) and attempting
a multistep logic process like booking a restaurant reservation while driving.

3. Use Common Platforms

Today, multiple automotive manufacturers are each developing their own

APIs with the mis-perception that a huge developer ecosystem will
spontaneously grow around them. This is in a world where RIM and
Microsoft/Nokia are struggling to get app developers on board, and we all
know what happened to Palm/HP. Why would more than a handful of
automotive-focused developers work on custom code and sign themselves
up for repeated qualification testing (a big burden) for a measly 10,000 or
even 100,000 potential users?

Requiring developers and content publishers to separately customize their

apps for many different automotive platforms will never add up to a thriving
marketplace for consumers. As long as Ford has one platform, GM another,
Honda a third and BMW still another, audiences will remain too fragmented
to attract serious developer attention. Until automotive manufacturers can
consolidate platforms and provide access to many millions of potential
consumers with one API, this fragmentation will stifle development.

4. Future Proof

Automotive manufacturers must future proof their infotainment systems to

keep pace with the latest web content or consumers will simply turn to their
phones instead. Infotainment system development typically starts three years
before launch, and it takes at least a couple of years for the hardware to roll
out across the intended vehicle lines. While in some cases new features can
be added with software changes, the software still has to be frozen six to
twelve months before launch, depending on the manufacturer. Software
updates are possible after launch, but as we have seen with map updates, it
will be hard to get more than a small subset of consumers to go through the
work of updating their software.

Thus, infotainment systems must be designed from the start to accommodate

the real world web where RSS feeds are used incorrectly, APIs change
frequently, and services come and go. For example, checkins took off two
years ago, then daily deals last year, but both trends are too recent to have
been designed into an infotainment system launching today. It is impossible
for an automotive manufacturer (or anyone) to predict what will be hot when
a system under development today is launched in three years. The industry
needs a solution that can advance with the trends without hassle or expense
to the consumer.

5. No Moving Parts

More and more new cars are shipping with cellular modems for low data
applications like auto airbag deployment notification. A few will also
support audio and other entertainment content via the embedded modem for
an extra recurring fee, but that will only appeal to a small niche of
consumers. Thus, over the next several years, most connected content will
be enabled by connecting (either via cable or wirelessly) a mobile phone into
the cars infotainment system. That solution will work well for early
adopters and heavy consumers of entertainment content. However, most
people are still putting their seat belts on while pulling out of their parking
spots, and arent going to take the time to find and connect their mobile
phones. Thus, to achieve true mass market adoption, a consumer needs to be
able to simply start his car and automatically get content without relying on
a mobile phone.

Embedded data solutions will take off when two additional things take place:

Automotive manufacturers and carriers create embedded modems that

are modular and changeable at the dealership, or even directly by
consumers so that they can specify and later change their
preferred carrier.

Consumers are able to add their car to their monthly carrier bill as a
device on their existing household data plan. While this concept
doesnt exist yet in the U.S., France Telecom began offering a
multiple device single data plan earlier this year.
PROBLEMS FACED BY THE AUTO INDUSTRY
DURING THE TIMES OF RECESSION

Auto Sector

Auto Sector is among one of the most vital sectors for the economy as it is
the key economic growth factor. Its direct dependence on oil use affects the
national security, economy, and the environment of the economy. When the
global oil prices are high, an increase in operating cost is seen for the
vehicles thus it trickles down to the sales and revenue growth for the
organization and also shows an impact on the economic growth. In the year
2008 when the world experienced a recession, the decrease in consumer
spending made a severe impact on the sales of the automobiles. Auto sector
which incurs a huge cost for the R&D department had to struggle to balance
the costs of doing business while maintaining competitiveness.

Costs, R&D and Innovation

Auto Sector has to incur many different costs such as product

innovation/R&D, flexible manufacturing, globalization, marketing, pensions
and legacy, and incentives thus decrease in sales was seen as a big hindrance
in profit making. Apart from the costs incurred, numerous regulatory and
legislative requirements is again a concern for the auto sector during gloomy
years.
Now looking at the consumer trends we see that with an array of
requirements to meet, it becomes difficult for the manufacturing companies
to find a single technological solution thus resulting in investment in
multiple new technologies. This investment has again become a burden for
the companies.

Problems of the Auto Sector in the times of Recession

i) Tightening of regulations by government in relation to the environmental

impact and others has just added to the sectors woes.

ii) The global slowdown in the economy led to the decrease in demand for
automobiles and the sales of the automobiles saw a decreasing trend.

iii) A decrease in disposable income was seen which negatively impacted

the sales.

iv) Due to the tightening credit policy the recovery of the already closed
sale on credit became a tough task and companies witnessed a rise in bad
debt.

v) Intense competition from peers, cost reduction and fluctuation in price of

raw materials are some of the major problems faced in the industry.

In recent times with the rebound seen in the global economy, the crisis
plague in the industry is seen to be diminishing gradually and the sings of
recovery and growth are seen in the industry which again helped in changing
the market sentiments to a great extent. Activities including mergers and
acquisitions was seen rising in the recent times and in times to come, if the
condition prevails. In no time the automotive industry will regain its footing
and could turn to growth model. Policies like mergers and acquisition,
Capex and of course shareholders rewards could be seen rising

Year 2009 shall be a memorable year not for any positives but as one of the
most turbulent and dynamic years especially in the global auto industry. The
worldwide financial crisis by then did the damage and a collapse of vehicle
sales in North America was observed.

i) Soaring fuel prices in 2009, a drop in vehicle sales was experienced,

leaving major automakers and suppliers at the brink of bankruptcy.

ii) This decrease in demand called for some major operational, financial and
structural restructuring in the sector.

iii) Multiple change in financial polices was carried over and owing to lack
of credit availability in market in 2008, the number of mergers and
acquisitions (M&A) remained depressed throughout 2009.

iv) Strategic buyers were least interested to spend their limited cash reserves
or take on additional debt for any buyout despite being offered
mouthwatering price for the deal.
Currently we are at a point in the cyclical recovery where companies having
strong profitability, liquidity position, creditability and strong operating
models will likely leverage M&A which would help them to develop
sustainable competitive advantage over peers. Early 2010 showed positive
signs in the operating environment after the global financial crisis left the
worlds economies with weak credit markets and disrupted consumer
confidence leading to negative market sentiments. Owing to the crisis which
plagued the industry at a global level, a cut in capital expenditure was seen
owing to the three main reasons:

Decision to reduce manufacturing capacity expansion

Current capital expenditures are to a higher degree focused in emerging

markets where construction costs and cost for machinery are generally
lower as compared to high cost countries where it was mainly focused
previously

Use of less automation reduces capital expenditures for manufacturing

lines in low cost countries.
CAREER OPPORTUNITIES IN THE AUTOMOTIVE
INDUSTRY

Working within the automotive industry is fast-paced and an exciting career

choice, with over 17 million cars and motorcycles registered in Australia
that all need to be serviced and repaired. The automotive industry is
currently on the road to a more environmentally friendly future and
technological innovation will be a crucial feature as cars continue to evolve
to meet the needs of a low carbon economy.

Australias automotive industry is a major contributor to the nations

lifestyle and economy. The automotive sector is the largest manufacturing
industry in Australia, with nearly 52,000 people directly employed by the
three local vehicle manufacturers, dozens of importers and thousands of
related components manufacturers. Rapid changes in technology are
influencing the many industries, most notably in the repair and maintenance
subsector, where advances in automotive manufacturing mean that
maintaining skills currency is a front-of-mind issue.

Companies are also identifying gaps in basic skill levels, associating

industry recruitment difficulties with an absence of job-ready candidates.
A high proportion of companies engage with the vocational training system
in response to their skill needs, influenced partly by the reasonably strong
uptake of apprenticeships in the industry. Students looking to start a career
in the automotive industry should begin their training with the Certificate II
in Automotive Studies (Pre-Vocational), this will give students a great
introduction to the industry and kickstart their career today.
The wide-ranging automotive industry includes car manufacturers,
importers, distribution, parts suppliers and manufacturers, car dealers,
mechanics, logistics and transport. These companies are more than often
engaged in the design, research, development, manufacture, sale and
maintenance of motor vehicles and parts.

The demand for highly skilled technicians in all sectors of the industry will
continue to grow as the government subsidises the long anticipated green-car
revolution. Hybrid cars will be great contenders to lead the green revolution
over the next five years. The current advancements in technology have led to
a growing number of career opportunities, and high vehicle sales have
increased the number of vehicles that require maintenance and repair
attributing to the growing need of skilled tradespeople.

The automotive is a sector within the Other Services. The Other Services
industry includes a range of personal care services, such as hair, beauty and
weight management services; death care services; administering religious
events; or promoting the interests of their members. Also included are repair
and maintenance activities for automotive and other machinery and
equipment. This industry contributed $6.1 billion to Victorias output in
2013-14 representing 2% of the total. The Other services sector employs
approximately 109,300 people, with a growth of 3% over the past five years,
with the largest growth in Personal and Other Services. The employment
outcomes for students who study to become a mechanic once they finish
their training show 68% of people who were not yet employed before
beginning their course were employed after completing it.

Automotive Mechanic

A career as an automotive mechanic over the next four years to November

2019 is expected to be above average (between 25,001 and 50,000).
Employment for this occupation rose strongly in the past five years and rose
moderately in the long-term (10 years). Looking forward employment for
Automotive Mechanics to November 2019 is expected to remain steady. As
a very large occupation, this suggests opportunities should be available in
most regions. Automotive Mechanics have a very high proportion of full-
time jobs, 93.8%. For Automotive Mechanics working full-time, average
weekly hours are 40.3 compared to 40.9 for other occupations and
unemployment for Automotive Mechanics is below average. Motor
Mechanics are mainly employed in Other Services, Retail Trade and
Transport and Transport, Postal and Warehousing.

Automotive Electrician - Median salary AU $54,189

Over the next four years to November 2019, the number of job openings for
Automotive Electricians is expected to remain steady. The employment for
this occupation rose very strongly in the past five years and expects to stay
steady in the long-term. Looking forward, employment for Automotive
Electricians to November 2019 is expected to grow slightly. The earning for
this job are above average and unemployment for an Automotive Electrician
is below average. Automotive Electricians are mainly employed in Other
Services, Manufacturing and Wholesale Trade.

Motor Vehicle Parts Technician - Median salary AU $47,651

The number of job openings for Motor Vehicle Parts Technician over the
next four years to November 2019 is expected to be above average (between
25,001 and 50,000). Employment for Motor Vehicle Parts Technician is
expected to grow strongly to November 2019. This is a large occupation
suggesting opportunities should be available in most regions. Motor Vehicle
Parts Technicians are employed in retail trade, wholesale trade and other
services.
CONCLUSION

Thus to conclude it goes on without saying that the Auto Sector experienced
a decline during the year 2009 in particular, when the companies in the
sector had to cut down on their capital expenditure and acquisition
spending. This trend continued until 2010 when due to some support seen in
the economy, auto sector gained momentum and companies started making
acquisitions and expenditure while planning for future growth. Companies in
the sector paid dividends and went for share repurchase to some extent
during the year 2008, so as to offset the decrease in acquisition and capital
spending. This move was intended towards improving the falling share price
in the market and to generate positive sentiments among investors about the
sector. The year 2010 brought in new hope for the sector when the
companies increased largely on the share purchase and dividend payout so as
to give back the maximum to the shareholders.