The automobile industry in India is witnessing significant growth off late, and the trend is expected to continue in the foreseeable future. The Indian automotive industry has developed considerably over the last few years, and there is a slew of different products for different segments of the market. What’s heartening is the fact that that automobiles are gradually making inroads into the rural middle class category, thanks mainly to the considerable investments made in the industry.
India has emerged on the radar for every major global automotive player, and the country is also fast becoming an outsourcing hub for automobile companies worldwide, as reflected in the increased number of automobile exports from the country. Today, all major global automotive players like Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have their manufacturing units in India. This coupled with favorable economic growth and higher disposable income is driving the success of the Indian automobile industry, and the upward trajectory of the industry is not going to end soon.
Automobile industry of India can be broadly classified under passenger vehicles, commercial vehicles, three wheelers and two wheelers. Among these segments, the passenger vehicles market in India looks the most promising albeit with a few challenges that need to be addressed.
Challenges faced by the market
Some of the major challenges faced by the passenger vehicles segment in India include excessive production capacity and surging new competition. Challenges in the form of costs, flexibility and technology are also hampering the growth of the market. The automotive industry also faces huge challenges for implementing the latest technology owing to the considerable production volume it is required to handle. The inability to deploy automation and other related technologies is turning out to be unprofitable, especially for the players operating in the segmented niche markets.
Increasing regulatory and social pressures are detrimental toward the improvement and sustainability of the products as well as production process. Industry experts believe that adequate research can be the key for the automotive industry to address these challenges and for moving toward a sustainable and profitable industry in the future.
Emphasis on environment-friendly automobiles across the world is emerging as another challenge for Indian market. Increasing calls from all corners of the world to bring hybrid cars into the mainstream can be concerning for the overall market growth. Hybrid cars require companies to invest more on research. The Indian automakers had committed themselves to the concept since the beginning, and have taken the lead in the market as a result. However, the global players plying their trade in this market are now being forced to make a major investments towards this concept, and this can be significant deterrent for the overall growth of the Indian passenger vehicles market.
Perhaps the biggest question that lies in the face of the automotive players is how a company can remain competitive amidst the turbulent transformations in the automotive industry. The key to sustaining profitability in this industry lies in being focused, responsive, variable and resilient. Adapting efficiently to the ever-changing market environment is the need of the hour. Identification of adequate problem-solving tools and methods and their quick implementation can go a long way in helping car manufacturers to stay in the game for a considerable amount of time.