Automobile Industry – UPSC GS1

Explain the factors promoting the rapid growth and development of auto-mobile industry in India, giving suitable examples. (200 Words)

India has witnessed a rapid growth in the auto mobile sector. The reason behind the growth is as follows:
  1. Fuel economy : high rates of fuel have forced competition among the companies to focus on delivering performance-oriented products.
  2. Demography : India is a huge market for automobile industries. It has a great demand for 2 wheeler and cheap 2 wheeler vehicles. Increased affordability has attracted many towards buying vehicles.
  3. FDI : govt has allowed 100% FDI in automobile industries. kawasaki, honda, hundai etc have set up their centres in India.
  4. Banking infrastructure : financial inclusion, availability of car loans has helped.
  5. Improved infrastructure : development of roads, highways (golden quadrilateral) promoted heavy vehicle industry.
  6. Increase in demand from defense and agriculture industry of trucks, tractors etc.
  7. Cheap skilled workers have reduced the production cost and also attracted FDI.
  8. The Government technology modernization fund is concentrating on establishing India as an auto-manufacturing hub.
There is also increasing domestic demand:
  1. Concerns for privacy and safety
  2. Pathetic public transport. Poor last mile connectivity
  3. Culture of materialism due to rise in Purchasing power
India has to keep up the progress as there will be competition from the rest of the world soon by the expansion of technology. self-governing vehicles, more diesel powered cars, high performance hybrid cars will hit market soon



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