World of Automobiles
Index : 1,556 | 1Yr : +30.05% | 1Mo : -2.21%
Category : Sectoral Trackers
Min Investment : 56,272
Automobiles are everybody's prized possessions. The sector accounts for over 7% of India's GDP and employs almost a million people. With a young average age and a low unemployment rate, the need to commute among the working population is growing by the year. The two-wheeler segment accounts for approximately 80% of total and the overall Passenger Vehicle segment has about 15% market share. India has only gained the competitive edge in automobile manufacturing after a few decades of experience with multinationals such as Suzuki, Toyota, Hyundai, Honda etc. in the post liberalization period of 1992 until recent years. India is emerging as a large exporter of low-cost automobiles to the rest of the world and by 2020, Indian auto companies are expected to be the largest players in the 2 wheeler and 4 wheeler segments.
In a way, the GOI protects the interests of Indian manufacturers by imposing heavy import duties on automobiles brought into the country thereby making it unfeasible for foreign companies to exploit the quality situation in India. However, Foreign Direct Investment (FDI) is allowed up-to 100% under the automatic route. This sector is a major priority in the 'Make In India' initiative as the government encourages foreign players to set up manufacturing and assembling plants which can generate large employment and increase government revenues.
There is an increasing need to expand the road network in India and it will have an overall positive impact on the automobile sector. An increase in per capita income levels will also give it a substantial boost.