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Surfindia » Automobile » Automobile Industry » Industry Investment

Industry Investment

According to Commerce Minister Kamal Nath, India is an attractive destination for global auto giants like BMW, General Motors, Ford and Hyundai who were setting base in India, despite the absence of specific trade agreements.
Current Scenario
  • On the cost front of Indian automobile industry, OEMs are eyeing India in a big way, investing to source products and components at significant discounts to home market.
  • On the revenue side, OEMs are active in the booming passenger car market in India.
Overview
Snippets
  • By 2010, India is expected to witness over Rs 30,000 crore of investment.
  • Maruti Udyog has set up the second car with an investment of Rs 6,500 crore.
  • Hyundai will bring in more than Rs 3,800 crore to India.
  • Tata Motors will be investing Rs 2,000 crore in its small car project.
  • General Motors will be investing Rs 100 crore and Ford about Rs 350 crore.
  • Ashok Leyland and Tata Motors have each announced over Rs 1,000 crore of investment.
Why India
The economy of India is emerging. The following table show the ranking of India in the past four years.
Rank 2005 2004 2003 2002
1 China China China China
2 India Thailand Thailand Thailand
3 Thailand India USA USA
4 Vietnam Vietnam Vietnam Indonesia
5 USA USA India Vietnam
6 Russia Russia Indonesia India
7 Korea Indonesia Korea Korea


Twin Advantages:
  • Scaling costs
  • Optimising resources
Note: Excellent source for IT based engineering solutions - for products & process integration.

Facts & Figures
The automobile industry in India is on an investment overdrive. Be it passenger car or two-wheeler manufacturers, commercial vehicle makers or three-wheeler companies - everyone appears to be in a scramble to hike production capacities. The country is expected to witness over Rs 30,000 crore of investment by 2010.

Over the next one year, some 20 new cars will be seen on Indian roads. Take note of this, Maruti Udyog is coming up with new Zen and the diesel version of Swift during the next few months. Hyundai will also be unmasking the Verna and a brand new diesel car. General Motors will be launching a mini and may be a compact car.

Most of the companies have made their intentions clear. Maruti Udyog has set up the second car plant with a manufacturing capacity of 2.5 lakh units per annum for an investment of Rs 6,500 crore (Rs 3,200 crore for diesel engines and Rs 2,718 crore for the car plant itself). Hyundai and Tata Motors have announced plans for investing a similar amount over the next 3 years. Hyundai will bring in more than Rs 3,800 crore to India, Tata Motors will be investing Rs 2,000 crore in its small car project.

General Motors will be investing Rs 100 crore, Ford about Rs 350 crore and Toyota announced modest expansion plans even as Honda Siel has earmarked Rs 3,000 crore over the next decade for India - a sizeable chunk of this should come by 2010 since the company is also looking to enter the lucrative small car segment.

Some new entrants will also taste the water. They are the big names in passenger cars like Citroen, Volkswagen AG, Nissan (separately, apart from its tie-up with Suzuki), Alfa Romeo, Maserati, Land Rover and Aston Martin.

Talking about the commercial vehicle segment, Ashok Leyland and Tata Motors have each announced well over Rs 1,000 crore of investment. Mahindra & Mahindra's joint venture with International Trucks is expected to see an infusion of at least Rs 500 crore.

In two-wheelers segment, Chinese bike major Lifan and the iconic US brand Harley-Davidson are expected to enter India soon. Hero Honda is about to establish its fourth manufacturing plant. Bajaj Auto and TVS Motors are moving to the excise-free zones of Himachal Pradesh and Uttaranchal for putting up new capacity.

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