ANALYSIS OF INDIAN ECONOMYON AUTOMOBILE SECTOR

ROLE OF AUTO SECTOR IN GDP• India has become an international player in automobile

industry.

• India ranks 11th in the international passenger car market

• India ranks 5th pertaining to the number of bus and truck sold in the world

• Increase in demand of cars is powered by the increase in income, introduction of tailor made finance schemes, emi schemes or easy repayment schemes.

• Auto sector is manufacturing 2.7mn four wheelers/yr and 9.75mn passenger vehicles including two & three wheelers.

• It is expected that the Automobile Industry in India would be the 7th largest automobile market within the year 2016

SHARE IN GDP

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2006 2009 2010 2016

2006

2009

2010

2016

GROWTH AUTOMOBILE INDUSTRY

POSITIVE

• Introduction of NANO will enable 117mn households to buy a car.

• Auto sector has lured many international giants to invest.

• An export hub because of low labor and components cost.

• Car sales forecasted to be inc. by 38% in July 2011

NEGATIVE

• Demand had been hit by recessionary effects.

• Auto sector is also affected by increased loan rates of central banks.

• Supply bottlenecks offer a major hurdle in path of growth.

• Not been able to produce world class engineered vehicle.

EXPECTATION

• All the major auto companies enjoyed the high growth ride till the mid 2008. But at the end of the year ,industry had to face the hard truth and witnessed the fall in sales compared to last year. In December2009, overall production fell by 22 % over the same month last year.

• It is expected that the Automobile Industry in India would be the 7th largest automobile market within the year 2010 Projected Growth rate in Automobile Industry· Passenger vehicle sales in the country will grow at a CAGR of 12 per cent to touch 3.75 million units by 2014.· The domestic two-wheeler sales will grow at a CAGR of 8.8% by 2014 at 11.3 million units.

• · To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.

CONCLUSION

• Speaking about the automobile sector ,yes inflation tends to bring negative sentiments among the buyers due to increase in prices and on the buyers side increase in input prices, but even taking into these things in considerations .there were ways chalked out to tacle rising prices.

• Considering automobile industry is an crucial component of the Indian economy. Especially in states where automobiles dominate the manufacturing sector, decreases in automobile sales can have dire economic consequences for the state and its people. Therefore, it is critical that the automobile industry plan its business carefully and to be aware of the upturns and downturns that might be coming so as to prevent o rameliorate any economic shock those changes might have on the country’s or the state’s economy.