• Economic share:              34 billion (4,4% of GDP)
• Production:                     11,3 million vehicles, predominant share in 2-wheelers
• Employability:                 3 million people
• Car density:                     9 million car owners (7/1000)
• Export:                           16 % vehicle production, 20% components

In the Indian Auto policy for 2010, India has declared that it wants to establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010

Car-industry in India.
The Indian automotive industry is booming. Car production is now over 1,5 million and is expected to grow to 3,5 million cars per year in 2012. Several global car manufacturers have already built new production plants in India or are planning it.

India is the second largest two wheelers market in the World. The total vehicle production is therefore mainly dominated by the production of two wheelers. Wages are still very low which make it difficult for most of the population to buy a car. The occasion market is very small because most of the cars are driven for 15 to 20 years. This two wheeler group is seen as the highest car purchasing potential of India. That’s why Tata plans to produce a small car for $2000. Other car brands like Renault, Maruti-Suzuki and Volkswagen are also planning the production of a small low cost car for the domestic market.

The biggest local producers are Maruti-Suzuki in Delhi, Tata motors en Mahindra in Pune. Other manufacturers who are already present in India are Toyota, Daimler, Volkswagen, General Motors (with Opel and Chevrolet), Ford, Volvo, Fiat and Renault (Logan).

Important developments:

In the following figure the current plants are shown in black with numbers from the actual production and the expected growth. Red shows the plants in development.

Expected growth from 1,5 mln to 3,5 mln cars in 2012

Opportunities for Dutch companies:
Because of the long time closure of the Indian market the Automotive industry didn’t have lots of international competition. Because of that the level of product and process innovation has been very low over the last years which caused the aging of the domestic car market. This means that the local car producers and suppliers have large difficulties to meet with European standards. Because of the high domestic potential and the potential for export these local producers and suppliers recognise the need to innovate. Because of the lack of knowledge and experiences needed for R&D they are looking for international partners to cooperate. This offers good opportunities for Dutch companies which are specialized in research, development, design, testing and homologation.

Because of the growing local market the capacity of existing as well as new production facilities will have to increase rapidly, without the loss of quality. In this field opportunities rise for several Dutch suppliers of assembly lines and production cells but also for Dutch players in the field of quality and process management.

A specific problem for India is the congestion. In particular the larger cities in India are dealing with high traffic pollution, the cause of this lays in the number of cars and the high discharge of polluted gases. These gases are causing more and more health problems. The government has plans to introduce the Euro 4 standard. The local OEM’s will have to search for partners to help them bring down the emission rates..This results in opportunities for Dutch companies.

Overall the opportunities for the Dutch automotive industry lays in the following fields:

• Process & quality improvement local VM’s
• Bringing vehicles and parts to Europe
• Local supply to Western VM’s
• Emission, environment and mobility
• Upgrading suppliers
• Product design and engineering
• Cars & components
• Logistics and distribution
• Engineering outsourcing
• Component purchasing