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.
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.
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.
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.
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.
International car makers enter the Indian market, a trend that accelerates.
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.
In picturesLiberalisation 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.
http://news.bbc.co.uk/2/hi/business/6478685.stm
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