Recent trends in the global automotive industry
The automobile came into existence owing to the technological inventions and discoveries of many all over Europe. But it was in the United States that automobile makers like Henry Ford and Ransom Olds began automobile manufacturing on a large scale and turned the automobile into a major mode of transportation. In developed and developing countries, automobiles have helped people tremendously by making transportation of goods and people easier. Travel and communication has also become much simpler. Automobiles have become the hallmark of any civilization. The rate of buying and selling of motor cars also determines the industrialization growth globally.
The invention of the automobile has had it sown share of pros and cons. On the one hand it has not only made life easy but has also brought about the development of urban sprawls, hotels, shopping malls, super highways, theme parks, drive-in restaurants and also drive-in banking. On the other hand, it has given way to an increase of accidents, dependence on fossil fuels, more and more exhaust and noise pollution and subsequently resulting in global warming.
In 1672, the first working steam powered vehicle was built by a man named Ferdinand Verbiest. The inventor of the modern automobile is as generally acknowledged is Karl Benz. In 1885, Benz built his first Motorwagen for which he was awarded the patent on January 29th, 1886. Soon with the promotion of the vehicle around 25 Benz were sold between 1888 and 1893. The name of another prolific inventor in the field of automobiles was that of Henry Ford who founded the Ford Motor Company in America in the year 1903 on June 16th with a capital of $28,000. Henry Ford has been regarded as the father of modern assembly lines that are used in mass production. American automobile industry was revolutionized with the introduction of his Model T automobile and in the process Ford was awarded 161 US patents. Henry Ford is said to have had a global vision and the key to peace, he believed, was consumerism. There was a rise in many innovations in technology and business, thanks to his intense commitment to the lowering of costs. His efforts led to a franchise system that led to the forming of dealerships being put up in almost every city in North America and also in some of the major cities across six continents.
Presently, looking at the Indian automobile industry, it is seen that India is the tenth largest automobile producer in the world securing a production of two million units approximately every year. Industry experts believe that very soon India will reach the 10 million unit mark in the coming years. There are a number of global automobile giants that are looking forward to enter into collaboration and expansion plans with domestic automotive companies and produce automobiles in India. The Indian industry is highly involved in the design, development, marketing and manufacture and also in the sale of motor vehicles. Some of the big automobile names in the country are of Maruti Udyog, Hyundai Motors India Ltd., Honda Siel Cars India Ltd, Toyota Kirloskar Motor Ltd, Hindustan Motors and others.TVS, Hero Honda, Yamaha, Bajaj are some of the names in the two-wheeler arena while Tata-Telco, Eicher Motors, Bajaj, Mahindra and Mahindra manufacture heavy motors like buses, trucks, auto rickshaws and other multi-utility vehicles.
Jamshedji Tata was the first Indian to own a car and in 1897 the first automobile in India was rolled in Bombay. The passenger car and motorcycle segment in the Indian automobile industry is growing steadily by 8 to 9% while the commercial vehicle is growing by 5.2%. In the two-wheeler industry, motor cycles alone contribute to 80% of the market making India the largest two wheeler manufacturer globally. Experts believe that this segment will further grow by 8 to 9% in the forthcoming years. 79% of the Indian passenger vehicle market is dominated by cars, very much unlike the United States of America. This gives India the status of being the fourth largest car market in Asia. Also it is the fifth largest in commercial vehicle manufacturing.
Global automobile companies have flocked to India in recent times to develop the automobile industry owing to the growth of the Indian middle class and the economy as well. India is highly favored for providing with excellent man power for the growth of this industry coupled with the fact that in Europe, Japan and the USA the industry seems to have stagnated thus making the Indian markets more and more attractive in terms of new capacities and flow of capital. Due to this, the Indian automobile industry has been growing steadily over the past five years at the rate of 15 to 27%. In the list of the top 15 automobile makers in the world India ranks 12th and this statistic has been released by the UNIDO or the United Nations Industrial Development Organization in its International Yearbook of Industrial Statistics 2008. As per the Global 200, the World’s Best Corporate Reputations list as compiled by the Reputation Institute based in the US, Maruti Suzuki India Ltd (MSIL) went ahead its parent Suzuki Motor Company, Japan to become the fourth most reputed automobile company in the world.
Tata and Mahindra and Mahindra have become the leading Indian Original Equipment Manufacturers or OEMs in the global automobile scene. These OEMs have begun to re-invent themselves in terms of technology and manufacturing superior designed vehicles owing to the stiff competition that they face from the global market. Indian OEMs have made breakthroughs in cost-effectiveness and skilled human resource pool to strike at the cost of product development. This principle called ‘Frugal Engineering’ became the hallmark of the Indian automobile industry. Even the suppliers are adding on their competent skills to add to the cost effectiveness. Global OEMs are now looking at the India based design and development centers to control their own coasts of production and manufacture. Some of the well known vehicles like the Tata Nano, Mahindra Scorpio, Tata Ace and Indica are developed by the Indian OEMs after going through market research meticulously and also taking care of the Indian consumer’s needs.
Even global giants like BMW and Daimler Chrysler have recognized and given due importance to the Indian automobile industry. On one hand the global automobile companies are trying to get edgeways into investing into passenger vehicles and on the other hand the Indian automobile companies are making efforts to invest largely into research and development and working towards the overall growth and efficiency of the automobile industry in the country at large. What gives impetus to this industry in modern times is the increasing rate of disposable incomes of the young professionals and this coupled with the low EMI values. This leads to their manufacturing more affordable vehicle to the common masses comprising mainly of the middle classes.
The Ministry of Heavy Vehicles has decided to revamp the automobile industry and increase turnover by four times by its plan for the period 2006-2016. This plan seeks to bring under its wing all the sectors of society, especially the rural sector. Many global companies have formed joint ventures with Indian automobile companies but those like Hyundai have remained fully independent. In future there is a high potential for further mergers to take place between the Indian companies and global automobile companies.
There is a separate market for used cars which is indicative of the popularity of cars in the automobile industry. Used cars are highly beneficial to the middle classes especially those that cannot afford new luxury cars. People today are consciously opting for investment in vehicles and in car dealerships. Many websites give detailed reports of cars—used cares and also the whole process of selling and buying a car including reviews on cars and their prices.
Major Indian, Korean, Japanese and European automobile companies are holding major shares in the market. Tata Motors holds around 60% of the Indian commercial vehicle market being the largest medium and heavy commercial vehicle manufacturer in the automobile industry. TVS makes around 80% of the moped in the country in the two wheeler segment while Hero Honda provides 50% of the motor cycles in the market and Honda holds 46% of the share in the scooter segment. In three wheelers, Piaggio’s market share is around 40% while Bajaj makes 68%of the three wheelers thus being the largest three wheeler manufacturers. In car manufacturing, Maruti Suzuki has complete monopoly over the multi purpose vehicles and also holds the largest passenger car producing shares of 52% in India. Mahindra holds 42% share in utility vehicles and Hyundai and Tata Motors are the second and third in the field of car production.
The Indian automobile market has witnesses a tremendous change in the last couple of decades. While all kinds of cars are making a foray into the country, the sports utility vehicles have also made quite a stir in the automobile market here. The pioneer of SUVs in India was the Maruti Gypsy by the leading car maker, Maruti. Soon Tata Motors emerged with the Tata Sumo and Safari with Mahindra and Mahindra launching Bolero, Scorpio and also the Voyager. Toyota from Japan was the global leader in SUVs and its range of SUVs include Prado, Qualis and Innova. In collaboration with foreign partners Hindustan Motors also launched its own set of SUVs like Pajero, Pushpak and Trekker. The Tuscan and the Terracan were the products of the Korean car giant Hyundai.
The emergence of the SUVs is modeled on the military jeeps that were in use during the World War II. These became highly popular because of their capabilities of traveling through rough terrain in the rural areas of USA and Europe and this gave major automobile companies new ideas for new manufacturing. Some of the initial SUVs making a mark in the automobile market were the Toyota Land Cruiser, Land Rover and When the SUVs began to gain a steady acceptance, these cars gradually made an entry into the towns and cities and it witnessed a steady increase in their demands and production.
Popularly known as the ‘off road vehicle’ and the ‘four wheel drive’, SUVs can broadly be said to be the non-commercial passenger vehicles that are built on a frame chassis similar to the ones used in trucks. With time these sports utility vehicles have undergone many changes in design and aesthetics and components for light weight and fuel efficiency have been integrated into these contemporary SUVs. Thus, these vehicles are now being used for recreational and sporting purposes as well. SUVs like Outlander and Grandis from Hindustan Motors, Ingenio from Mahindra and Mahindra, Skoda’s Roomster and Captiva from Chevrolet are soon to be launched in the Indian automobile market.
As for multi utility vehicles, they play different roles for different consumers because of its multi usage capabilities as the name suggests in itself. These vehicles have dynamic features of stability, high quality, ruggedness, durability, reliability, looks and are easy to maintain and have operational economy; because of this they are used extensively for both public as well as private transport. Their varied features make them highly coveted for a good traveling and comfortably lavish experience. Some of these MUVs that are really being sought after in the market are General Motors’ Tavera, Toyota Innova and Mahindra Scorpio. The oldest automobile manufacturers in India are Hindustan Motors and their models of Pushpak, Trekker and Porter have been highly successful in the rough terrains of the country and also as carrier vehicles. The MUVs of Mahindra and Mahindra Limited have made successful forays into all the sectors, the urban, semi-urban and also the rural markets with its Scorpio and Bolero. Considered to be one of the best MUVs in the market, Scorpio has gained loyal followers due to its spacious interiors and it also ensures safety and reliability with its toughness. Similar to the Scorpio is the Toyota Innova that can take families on holidays through hills and mountains and other rough terrain. It has its height to its credit that ensures comfort to passengers for moving in and moving out. Tavera is quite adept for long distance leisure and work travel owing to its spacious interiors, integrated foot top and root top ski racks. Toyota’s Qualis too has enjoyed a long success as an MUV. This has been owing to its 8+1 seating arrangement, safety features of ELR seat belts and side door beams. Tata Safari is also an excellent MUV. Multi utility vehicles have good value for money because of their functional excellence, fuel efficiency, sturdiness and operational economy.
Automobiles and transport ensure growth and are said to be the cornerstone of the global economy. As per statistics, every day, nearly 80% of freight is carried by trucks thereby delivering 70 kg of goods to every European citizen. Employment opportunities are created by commercial vehicles and they are the engines of commercial growth in many sectors of the economy. The ACEA is the European Automobile Manufacturers Association whose commercial vehicle members are global automobile giants like Daimler AG, DAF Trucks, Iveco, MAN AG, Scania AB, Volkswagen AG and AB Volvo; they produce about 2.6 million commercial vehicles annually thereby generating a turnover approximately 70 billion sterling pounds adding generously not only to the European economy but also to the growth of skilled employment in the industry. More than a million Europeans depend on the automobile industry for their jobs as part suppliers or distributors, dealers or those providing for after-sales care. In addition 2.6 million are employed in 250 billion sterling pounds in a year haulage industry.n recent times, with the rise in levels of global warming and environment control efforts, many automobile giants are striving to make their automobiles environment friendly. They are working hard towards the development of new and innovative technology that would provide for a cleaner and a ‘greener’ transport. In this respect every year, low-emission cars, trucks and vans and other such vehicles are emerging in the market. The automobile industry has begun to address complex questions of how to control the growing transport demand or how to control emissions from congestions that result from inefficient infrastructure. Again, how consumers be included to help in environment control and take initiatives towards the production of cleaner vehicles. These industry experts deliberate over how to sustain the benefits of automobiles which has brought about considerable improvement in the quality of life at the same time reducing environmental impact. The commercial vehicle market in Europe is working towards creating new levels of fuel efficiency at the same time provide for sustainable mobility around the globe. At the IAA in Hanover, an international motor show for commercial vehicles was held where automobile giants like Daimler, DAF, Iveco, MAN, Scania, Volkswagen and Volvo Group expressed their opinions and views at the joint press conference emphasizing on the fact that a sustainable future of automobiles and transport can only be brought about by a collective effort. Recently, the EU ruled that overall greenhouse gas emissions should reduce by 20% by 2020 and it is essential for the strategy of all manufacturers to fit into this objective.
Modern big vehicles like the vans and the trucks have already begun to set proper standards in terms of efficiency, safety and the environment as well the vans and the trucks have already begun to set proper standards in terms of efficiency, safety and the environment as well. Since the late 1980s the pollutant emissions such as the NOx and particulate matter have gone through considerable reduction—85% and 95% respectively. Fuel consumption has also been cut down by the commercial vehicles by more than a third since the 1970s. With improved combustion engines and hybrid trucks and buses along with innovative drive trains and use of alternative fuels, it is positively anticipated that progress will continue undaunted.
However, one must remember that political support and a proper infrastructure are equally important and just developing innovative technology is not enough to create a sustainable automobile industry. Each and every one involved in the process, be it the fuel industry or the hauliers or vehicle operators and drivers must do the needful to lead to a safe and clean and a sustainable society at large.










