introduction:
The Automotive Division is a product and process technology leader in the manufacturing sector. Recognized as one of the driving forces of economic growth, the domestic automobile industry is considered a barometer of the economy. This idea is consistent with international trends, as in most mature economies the performance of the automotive industry is considered to reflect the health of the economy.
This sector has emerged as the sunrise sector of the Indian economy. The automobile sector is divided into four segments: two-wheelers, passenger cars, commercial vehicles and three-wheelers. Over the past decade, India has emerged as one of the most preferred locations in the world for manufacturing all kinds of high-quality auto parts and vehicles, closing the gap with several established locations in the process. Ta. By 2030, it is expected that more than 500 million people will live in Indian cities.
With rising income levels, India’s consumer base is expected to expand and spend on more and better vehicles across segments, providing a ready-made market for car companies.
Contribution of the automobile industry to India’s economic growth
- The Indian auto industry truly embodies the spirit of Atmanir Bharat, and perhaps many other industries can also draw lessons from it.
- The industry contributes 6.4 percent of GDP and approximately 35 percent of manufacturing GDP, directly supporting more than 8 million jobs (OEMs, suppliers, dealers) and an additional 30 million jobs in the value chain.
- Cumulative investments in the past decade have reached $35 billion, generating export revenues of $27 billion, nearly 8% of India’s total merchandise exports.
- The automobile industry is a major source of employment for India and provides many benefits to the MSME sector, which is an important cog in the Indian economy.
- The share of MSMEs in value addition of automobiles is 35%.
- Furthermore, in the automotive aftermarket, Creating economic opportunities for thousands of MSMEs.
- Although official numbers are not available, some estimates put the total number of MSMEs involved in the automotive value chain in the range of 25,000 to 30,000.
Challenges facing today
- Car sales in India fell 18.71% in July 2019, the steepest decline in about 19 years, and about 15,000 workers lost their jobs in the past quarter.
- This year has seen a slowdown in the automotive sector in major regions around the world, with sales numbers sluggish in Europe and the United States, but the situation has improved slightly since the beginning of July.
- During the past two years, when the market was strong, car sales in cities like Delhi, Mumbai and Bangalore had declined. Growth came from small towns in India.
- The disruption of small town ecosystems can be attributed to demonetisation and shift to Goods and Services Tax (GST).
- Uncertainty over BS VI norms also hit car sales.
Our goal
- The current slump in the auto industry appears to be temporary. The festive season and good monsoon will provide the much-needed catalyst.
- GST on cars and two-wheelers should be reduced, at least for a while. The state government also needs to reduce road tax.
- We need to turn liquidity into aggressiveness and willingness to raise funds. NBFCs should be encouraged to provide finance to people to buy cars. This will help increase car sales at the retail level.
- The market is large enough to accommodate both internal combustion engines and electric vehicles. The government just needs to formulate policies accordingly.
- Overall, the economy needs to be stimulated so that people’s disposable income increases, thereby increasing overall demand.
- Governments must ensure that: The automotive industry has not been borne the brunt of the transition. Toward a more environmentally friendly fuel
- If a nation aims for a $5 trillion economy, Automotive industry makes a major contribution.
