Automotive Mission Plan 2016-26 to be finalised by mid-2015
In the last two decades, a lot of things have changed about the Indian automobile market. Many new players came in, some old players grew stronger, some of them lost market share and a lot of new technology came in to stay. With all these market trends setting in, the Automotive Mission Plan for 2016-2026 decade is being prepared. It will be finalised by the middle of 2015. Many manufacturers missed their sales target in this decade and this will be noted while preparing the plan for next decade.
The document for automatics is currently in works under the Make in India campaign recently introduced by Prime Minister Narendra Modi. With this campaign, the government is trying to promote manufacturing in India only. For the automobile manufacturers, it would be a great move as the cost of production is low in India and labour is available at reasonable rate. This would help them price the products competitively and attract more buyers. Manufacturers like KTM have achieved really attractive pricings by high level of localisation. They are also manufacturing models that are not sold in Indian market in India only. Ford is also exporting a large number of cars made at their Indian facility. The government is trying to promote this so that more manufacturers follow suit and make India their manufacturing hub.
The Indian automobile industry employs almost 19 million people directly or indirectly and the new plan will propose measures to further boost the numbers. It contributes to 7 percent of our country’s GDP. The AMP for 2016-26 conceived the possibility of India being an international hub for automobile manufacturing. The output was expected to be USD 145 billion accounting for over 10 percent of India’s gross domestic product. The count of people employed in this sector was expected to be 25 million by 2016 however due to the economic slowdown; things haven’t gone the way they were supposed to be.
SIAM announced that the slowdown in economy will cause the industry to miss the targets set for 2016. The difference could be as much as 25 per cent less than the targets that were set in AMP 2016. The document stated that India will be the fourth largest automobile market in terms of numbers. We have seen the emergence of large automotive clusters in India. There are many hubs where manufacturers have got their plants and assembly units set up. Some of them are in Faridabad, Gurgaon, Bengaluru, Chennai, hosur, Kolkata and Jamshedpur. These hubs will also help fuel the growth in automobile market.
The growth in population will obviously result in sale of more vehicles. The purchasing power of people has increased and they have got more disposable income. This would be a factor in boosting the sales of automobile manufacturers. In the last seven years, the production of two wheelers has grown to 15.9 million units per year from 8.5 million units. India is the second largest two wheeler manufacturer in the world.