Automotive Industries

The high growth observed since 2001-02 in automobile sales continued and the annual growth was 13 per cent in 2005-06. Consequent to liberalisation, the arrival of new and contemporary models, easy availability of finance at relatively low rate of interest and price discounts offered by the dealers and manufacturers appear to have stimulated the demand for vehicles and a strong growth of the industry. The automobile industry grew at a compounded annual growth rate (CAGR) of 14 percent between 2000-01 and 2005-06. With investment exceeding Rs. 265,034 million and the turnover of the automobile industry exceeded Rs. 835,851 million in 2004-05.

The progressive liberalisation of the norms for foreign investment and import of technology appear to have benefited the automobile sector with production of total vehicles increasing from 4.2 million in 1998-99 to 7.3 million in 2003-04. It is likely that the production of such vehicles will exceed 10 million in the next couple of years. The global standards achieved by the industry have manifested in the increasing exports of the sector. The performance of the automobile industry in exports which grew by more than 28% in year 2005-06 as compared to 2004-05 is also encouraging. More information available on SIAM website.