Policy Changes in Automotive Industry in India

The history of Inidan Automotive Industry could be classified in to four statges based on the reveloutuonery policy changes introduced in the industry.The are  before   up to  1980 period ,up to 1990 period ,a the period up to 2007 and the era beyond 2008.These milestones are fixed according to the revlutionery changes introduced in the regulating principles.

The  last two decades of robust growth of the industry turned the country to leading manufature as well as exporter of automotive parts. As per the Draft National Policy published ,When volume of production is concered india is the  fifth largest country in the world and largerst manufacture as well as market for two wheelers and threse wheelers and tractors.The  country is the fourth largest manufature  in Light Commercial Vehicles and Fifth position in Heavy Commercial Vehicles.It is estimated that the automobile industry will be third largest industry in 2020 after China and USA.

Policy Milestones in abstract

Period Before 1982

• Industry was protected and Regulated
• Licenst/Permit Raj
• Restriction on Foriegn investments

1983  to 1990

• Policy liberalisation
• Foriegn investements
• Joint Venture  by Goverment  with Suzuki

1991  to 2007

• De licensing
• 100 % foriegn  Direct Investment
• BS 1 in emission levels
• Automotive Mission plan 2006 -2016
• Auto Policy 2002

2008 onwards

• BS  IV  Emission Standards
• National  Electric Mission Mobility Plan  NEMMP
• Faster Adoption and Manufacturing of Hybrid and Electric Vehicles FAME
• Fuel Economy Standards

Vehicles Production in India

According to the draft policy the car market is expected to raise to  the rate 29.5 per 1000 population from the existing 20.3 to 1000 demand stage.Rapid population gowth with good volume of young population and expected rising income are pointed out as the factors for such growth.

The automotive production in the country was recording a growth rate o@ 4 %,.It was 20.4  Million in volume , in  2011-12 and reached 25.3 Million in 2016/17 out of which 19.9 Million are  two wheelers .India is the largest manufacture of two wheelers in the world,than japan and china.

Present trend 

As per the report of SIAM, the  market is struggling due to various reason.The  total  vehicle produciton which recorded average  4% growth.recorded a decline in production  at a rate  - 10 .5 % ,instead of anticipated growth.Two Wheelers diminished to nearly 11.50 %  during the period,during the period  April /June 2019.The Commercial vehicle sector recorded a decline rate of  9.5 % wheras the passenger sector  deeply affectred with a decline rate more than  18 %.The total  reduction in sale of vehicle is more than 12 % during this period.

Sale of Vehicles

According to the data relaesed by  SIAM,apex body of automobile manfatures in the country,all the sectors suffered set back  during the period April to June 2019.Two wheelers sector suffered a set back of  11.5 % wheras the passenger segment suffered a decline of more than 18 % in the total sale of vehicles.Declin in domestic sale of vehicle is more than  9 %  during the period.

Reason for the down fall

According to SIAM ,change in the GST pattern could provide more sale of vehicles .They also demanded a perusal by the goverment to make the industry more stable .The hike in diesel price as well as hike in import of components etc are pointed out as the other grounds for the set back,