Make in India & this entire initiative has been quite an integral part of a lot of discussion these days. Wherever I go, I see people discussing industries & the growth & etc. So I decided to sit & research as I was feeling quite left out not being able to participate in such talks. So here is what I feel about it, especially about the automobile sector.
Top reasons why International Automobile industry is investing in India
India’s automotive industry is well-positioned for growth, demographically and economically. Well prepared to service both domestic demand and, increasing export opportunities. A predicted increase in India’s working-age population is likely to help stimulate the burgeoning market for private vehicles. Rising prosperity, easier access to finance and increasing affordability is expected to see four-wheelers gaining volumes, although two wheelers will remain the primary choice for the majority of purchasers, buoyed by greater appetite from rural areas, the youth market and women.
Here are a few reasons that are likely to increase investments;
Over the next 20 years, India will be a part of the big global automotive triumvirate.
Growth factors - growth in demand on back of rising income, expanding middle class and young population base, large pool of skilled manpower and growing technology; The country enjoys natural advantage and is among the lowest cost producers of steel in the world.
India’s car market has the potential to grow to 6+ Millions units annually by 2020. The emergence of large automotive clusters in the country: Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik- Aurangabad in the west, Chennai-Bengaluru-Hosur in the south and Jamshedpur-Kolkata in the east.
Global car majors have been ramping up investments in India to cater to growing domestic demand. These manufacturers plan to leverage India’s competitive advantage to set up export-oriented production hubs.
An R&D hub: strong support from the government in the setting up of NATRiP centres. Private players such as Hyundai, Suzuki, GM are keen to set up an R&D base in India.
Multinational automotive plants in India rank among the top across the world in terms of their productivity and quality.
Largest tractor manufacturer; 2nd largest two wheeler manufacturer; 2nd largest bus manufacturer; 5th largest heavy truck manufacturer; 6th largest car manufacturer; 8th largest commercial vehicle manufacturer.
The Automobile Industry provides varied investment opportunities, Two-wheelers (motorcycles, geared and ungeared scooters and mopeds), three wheelers, Commercial vehicles (light, medium and heavy), Passenger cars and Utility vehicles (UVs).
The production numbers in 2013-14 have been very encouraging for the growth of the Automobile sector in India. Passenger vehicles – 3.1 million; two wheelers – 16.9 million; commercial vehicles – 0.7 million; three wheelers – 0.8 million
The Make in India Strategy adopted by the Indian Government aims to facilitate investment, foster innovation, enhance skill development and build a sustainable eco-system for the manufacturing infrastructure in the country. These changes will only help build confidence among the global & India investors. The Government of India allows 100 per cent FDI under the automatic route. Excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced in February last year to 8 per cent from 12 per cent to boost the ‘Make in India’ initiative of the Indian government.
Hope it helps! Please feel free to comment & add to this.