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Last Updated: Tuesday, 3 April 2007, 17:02 GMT 18:02 UK
Timeline: India's automotive industry
India has begun an ambitious development programme for its automotive industry, which it hopes will make it a global production hub by 2016.

To many in India, cars remain illusive luxuries

The initiative, which is backed by both the government and by the existing automotive industry, relies on heavy investment both by domestic operators and non-Indian car companies.

Many foreign firms are eager to participate in the likely profits to be derived both from the growth of the Indian market and from the development of India as a major producer and exporter of cars, motorcycles, commercial vehicles and automotive components.

Here is an overview of the relatively slow, albeit increasingly rapid, emergence of India's automotive industry.


An embryonic automotive industry emerges in India


Efforts to create a manufacturing industry to supply the automotive industry with components get underway, spearheaded by the Indian government and leading entrepreneurs.

1970 to 1980

India's automotive industry begins to grow relatively fast, fuelled by six automotive companies:

  • Telco (now Tata Motors)
  • Ashok Leyland
  • Mahindra & Mahindra
  • Hindustan Motors
  • Premier Automobiles
  • Bajaj Auto

However, having a car is still seen as a luxury.

This is at least partly because the sector's growth is held back by requirements for production licences and restrictions on both production within India and on imports.

1980 to 1985

Rickshaws in Calcutta
Rickshaws are still commonplace in India

Japanese manufacturers begin to build motorcycle, car and commercial vehicle factories in India, often in partnership with Indian firms.

Component manufacturers also enter into joint-venture agreements, with European and US firms.

Exports start to grow.

1985 to 1990

The auto component sector, which had been protected by high import tariffs, squares up to competitors as the rules are changed.

Maruti Udyog enters the passenger car segment.

During the following years, Japanese manufacturers started selling motorcycles and light commercial vehicles.

1990 to1995

Delhi cab driver 1993
Taxis outnumber private cars in many parts of India

Economic liberalisation gets underway, allowing passenger car production without licences, though import restrictions remained in place.

Hero Honda emerges as a major operator in the motorcycle market, while Maruti Udyog becomes the leading passenger car maker.

1995 to 2000

International car makers enter the Indian market, a trend that accelerates.

Calcutta 2001
India's streets are gradually getting fuller

Advanced technology is introduced to meet competitive pressures, and environmental and safety imperatives.

Automobile companies start investing in service network to support maintenance of on-road vehicles.

Auto financing starts emerging as an important driver for demand.

2000 to present

As India's car market grows, the country is also emerging as a global automotive production hub

Liberalisation of the automotive industry gets underway, with the removal of many trade and investment restrictions.

Cars developed and produced entirely in India for both the domestic and exports markets emerge.

Financial services firms begin to offer car loans, in cooperation with the car industry.

Efficiency, capacity and environmental issues are identified, along with initiatives aimed at encouraging research and development to address such issues.

Source: India's Ministry of Heavy industries & Public Enterprises Draft Automotive Mission Plan 2006-2016.

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