India's automobile industry holds many opportunities for profitable foreign investment. I believe we can find success by expanding our company's market into India. The recession has impacted the growth of the automobile industry worldwide, not excluding India, but India's market proves to still be profitable.
I think our company would benefit from forming a joint venture or strategic alliance in India's auto market. Key markets segments our company should address are the commercial vehicle, two wheeler and fuel efficient compact car markets. We can utilize the research and development centers and incentives to gain further knowledge in green technology. A joint venture or strategic alliance could allow our company access to key distribution channels, resources and knowledge. These modes of entry will also facilitate a better market assessment and ease of gaining market share. I propose we work with a company whose market share is small, but still growing.
Economists predict that India's automobile manufacturing potential could propel India to become the 7th largest automobile market in the world by the year 2016. The manufacturing and component industry output is projected to reach $145 billion U.S dollars by the year 2016, creating employment opportunities for over 25 million people. India has the potential to become the world's 3rd largest automotive industry in the year 2030. Domestic sales of two wheelers is expected to grow 8.8 percent, totaling 11.3 million units by the year 2014 while at the same time, sales of passenger vehicles will grow at a compounded average growth rate of 12 percent, totaling 3.75 million units.
[...] Maruti automobile manufacturing controlled 46% of the domestic market for passenger vehicles, totaling 1.5 million units, with Tata trailing at 15% and Hyundai close behind at 14%. The sum of export sales totaled 217 thousand units whose main key players where Maruti and Hyundai with a market share of 24%. The compounded average growth rate for the domestic passenger vehicle segment was 22% and was 26% for the export market. Commercial Vehicles The commercial vehicle market comprised machine and heavy commercial vehicles for goods and passengers with the rest of the segment comprised of light commercial vehicles in 2007-2008. [...]
[...] Looking at today's automobile industry and looking ahead to the next 10 years, arouses some political and legal concerns that could restrict economic growth. India has a differential excise duty for big and small cars, custom and a customs duty for imported cars (including Hybrids) hindered the country's growth potential in the industry. There was however an excise duty reduction, but only for petrol driven trucks. The existing labor laws in India are complex central acts with an additional 16 associated rules. [...]
[...] More than 125 companies in Fortune 500 have Research and Development centers, proving the countries capabilities for product development, including large automobile companies. In India, companies can utilize the countries acknowledge resources and leadership in the It industry. India provides grants for 100% of fundamental research for pre-competitive technology and 50% for the development of new products. India's Automotive Testing and R&D Infrastructure Project are dedicated to ensure India develops as a strong testing hub. Plans for setting up independent automotive testing centers in close proximity to India's three largest automotive hubs will be supported by 380 million U.S dollars in investments. [...]
[...] Market Overview Data compiled in 2009 ranks India as in the two-wheeler global market, # 4 as the largest commercial vehicle market and in the global passenger automobile market India ranks 11th. There was an overall increase in production in 2008-2009 to 11.7 million vehicles from 10.85 million vehicles in 2007-2008. Production of passenger vehicles rose from 1.77 million vehicles to 1.83 vehicles. The number of two wheelers produced totaled 8.41 million, rising from 8.02 million. Output of units in the commercial vehicle market grew while the number of units produced in passenger market grew and there 7 two wheelers produced for every one passenger car. [...]
[...] Policies supporting Economic Growth in India's Automotive Industry y Current and future economic factors in favor of expanding India's automobile industry include the country's efforts to increase the accessibility to lower interest loans and credit, but there is a possibility than within the next 5 years interest rates could increase due to future planned government borrowing. India's motivation to boost infrastructure investments could expand the commercial vehicle segments, but the availability of resources such as steel, could make steel difficult to find at an affordable price. [...]
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