India Automobile Industry

The Automobile Industry is witnessing an exciting growth of over 20% over past many years. This sector was a major cause of Sensex bull rally to take it to 13000. Today Indian automobile industry approximately has --- market capital with a strong presence of Tata Motors, Bajaj Auto and Maruti udyog globally.

Major threat for the industry is increase in interest rates and rising fuel price, but due to poor public transport and infrastructure the above two factor cannot able to cause any harm to industry yet. Major concern for automobile industry presently is the increasing cost of raw material which is pulling down its margin. Companies had to resort to increased discounting to tackle intensifying competition while simultaneously grappling with increasing prices of key raw materials such as steel and aluminum. Companies are now focusing on diversifying their raw material sourcing, rationalizing the vendor base for component sourcing, reducing wastage through value engineering and controlling development costs by using computer aided designing and testing techniques. Most of the companies are going for inorganic growth to have a good bargaining power with buyer and supplier, which will improve there margin pressure and increase there market share, for example Maruti Udyug is in talk with Nissan Suzuki agreement. Tata Motors is also coming with Joint venture with Marcopolo to increase its passenger transport system. M&M is also planning to launch passenger cars and HCV (Heavy commercial Vehicle) with Joint Ventures.