Lower cost and high profit margins are luring the European carmakers to invest in Indian automotive industry. The country is fast emerging as a latest hub for world auto industry.
According to the market research report "Indian Auto Industry - Market Overview" published by RNCOS, automobile industry is one of the key drivers of Indian economy, with production of total vehicles increasing from 4.2 Million during 1998-99 to 8.46 Million during 2004-05. Indian automotive component industry's annual turnover (for FY 2005) was US$ 8.7 Billion, a jump of 30% YOY (global industry of US$ 737 Billion).
India is the fastest growing automobile market in the world, today. It's projected that by the year end 2010 car sales will double up, thus European major automotive companies are busy in building vehicle factories in Indian sub-continent due to lower cost & high margins.
As per experts, India is in the main league of automotive markets in Asia Pacific region. In last five years production for passenger cars in India has jumped above 100%, and reached 1.11 Million in 2005.
The Indian Government's latest policy to development as a hub for automotive & automobiles components has slipped in to top gear with the ten-year plan that was being unveiled recently. The main aim of this plan is to transform the US$ 34 Billion India's automotive industry to US$ 1450 Billion business by the end of 2016. Over the last few years the international automakers have invested about US$ 3 Billion in India.
An industry analyst estimated that by the end of the year 2007 middle class population in India would be 450 Million out of total one Billion population of the country. Also, the automotive industry in India will grow by 12% over the year with exports more than US$ 2 Billion.
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