The need for a robust transportation network is growing with time, as India is becoming a rapidly industrializing country. Backed by strong bonds, the country’s auto sector is responsible for 50 per cent of the nation’s manufacturing GDP.
Indian automobile industry has always been considered as the key growth influencer, boosted by an expansion in the economy. The industry exports have also expanded to various markets in the subcontinent, Europe and the US as well, says Pawan Ruia, the chairman of Ruia Group. On the other hand, auto component industry in India is considered to be one of the vital modules of the country’s economic growth, backed by robust positive multiplayer effect.
The sector’s exports grew to $15.16 billion per cent in 2018-19, compared to the $13.50 billion in 2017-18. Testimony to its growing recognition globally, the performance of the automobile industry has always been healthy, making India the fourth largest automotive market in the world.
However, the current slowdown has raised questions about the future of the automobile industry. The sales have dropped considerably, impacting the growth trend of the sector. But, various industry experts are upbeat about the future of automobile sector and believe that the slowdown is temporary.
Post liberalization, the automobile industry had completely opened up as the global automakers had set up their bases in the country in both two and four wheelers segment. A strong auto component manufacturing base has also started to establish, as the localization needs of the OEMs (original equipment manufacturers) have grown over the years. Meeting the global standards, the auto component makers have become competitive on the international stage.
According to Pawan Ruia, the story of Indian auto sector is not only about the large manufacturers, but also about the smaller players, who’ve played an instrumental role in shaping the industry. The auto sector has also adopted the technological changes immediately, working in sync with the global practices. The challenge at this juncture is to focus on the resource efficiency and innovative ways to control the environmental impact through eco-friendly schemes.
All in all, it will be interesting to see how the Indian automobile industry concentrates on sustainability, while improving the productivity and quality in the long run.