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Old 11th June 2015, 11:33   #1
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Default Big investments lined up in the Indian Auto sector!

The Indian automotive sector is going through a steep profit-making phase for the auto makers. On one hand, car companies are rapidly expanding their manufacturing capacities to meet the ever-increasing demand from the domestic market, and on the other hand, they are tapping it's potential as a base for export markets.

Seeing the long-term profitability of the Indian auto sector, all/most of the car-companies have lined up huge investments for the future. The leader in the race is Suzuki Motors who, through its new wholly-owned subsidiary Suzuki Gujarat, will invest a whopping Rs. 8,500 crores in Gujarat to create a facility with an annual capacity of 7.5 lakh units. Ford India has already announced an all-new (Asian) R & D Center based in Chennai, with a cost of around Rs. 4,000-5,000 crores, while Mahindra & Mahindra is all set to raise Rs. 5,000 crores from the market for expansion of it's plants (specially Chakan), while adding Rs. 3,500 crores in new investments and capex over the next 3 years. The Renault-Nissan combine is also ready to expand it's production facility at Chennai, investing Rs. 5,000 crores for the same.

Here's a look at what the car companies have lined up as future investments:

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According to RC Bhargava, Chairman, Maruti-Suzuki India Limited, the next two to three years will see things brighten up considerably in the Indian auto market, with demand rising and the economy picking up. Same sentiments are echoed by Katsumi Inoue, new President and CEO of Honda Cars India, who considers the Indian youth as it's target base for prospecting and it's biggest business opportunity for the future.

Also, most companies have done their long-term homework and predict a overall growth of at least 10% a year, despite the risks of demand not improving. They are not that far off - the Indian auto market has witnessed a solid growth of ~8% for the last fiscal year. Also, car companies have profited from making India their export hub for global markets such as Africa, Latin America, the Middle East and also developed countries in the near future. A "Made In India" stamped product might become an accepted norm globally in the days to come, to the delight of us Indians.

Today, the auto market is poised for a big boom for the car makers, and everyone is ensuring they don't miss out on their chunk of the profits pie.


ET


Related Reads:

Ford India - Exports higher than domestic sales (Ford: Exports higher than Indian sales)

Ford's new R&D Center to be based in India

Maruti to grow bigger than Suzuki globally (Maruti to become bigger than Suzuki's global operations)

Chennai - The new Detroit (Chennai : A New Detroit Rises In India (WSJ))

Last edited by RavenAvi : 11th June 2015 at 13:31.
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Old 11th June 2015, 17:24   #2
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Default Re: Big investments lined up in the Indian Auto sector!

Thread moved out from the Assembly Line (The "Assembly Line" Forum section). Thanks for sharing!
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Old 11th June 2015, 23:54   #3
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Default Re: Big investments lined up in the Indian Auto sector!

Quote:
Today, the auto market is poised for a big boom for the car makers, and everyone is ensuring they don't miss out on their chunk of the profits pie.
Obviously they're happy. They get to use low cost Indian labour (apparently its cheaper than China), & build their cars here.
And our loosely implemented labour laws form the perfect balance.

Whether positive or negative, this partly makes India, a factory of the world.

Maybe by having an Indian Automotive Research Organisation, hope our government sets up RnD institutions just like ISRO, DRDO etc. to help us be provided with safer cars at affordable(low) prices. Possibly through companies that have "other than just profit" motive or rather just the decency to make good, reliable & safe cars.

Last edited by GrammarNazi : 12th June 2015 at 00:22.
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Old 12th June 2015, 01:45   #4
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Default Re: Big investments lined up in the Indian Auto sector!

Quote:
Originally Posted by RavenAvi View Post
A "Made In India" stamped product might become an accepted norm globally in the days to come, to the delight of us Indians.
If China can manufacture for the whole world, why not India?

For made in India products to be successful, there must be no compromise on quality. The end product rolling out of Indian factories must be world class.

For this to occur, the country needs efficient labour, adequate electric supply, good roads and cheaper raw materials. The government has to make the country as investor friendly as possible.

We need not worry about our lack of technological know how, since foreign companies that set shop here bring their own technologies, which is one way for us to get hold of the latest techniques which would otherwise not be available to us.
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Old 12th June 2015, 02:01   #5
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Default Re: Big investments lined up in the Indian Auto sector!

Surprising to see Renault-Nissan investing so much on the Chennai plant expansion. Their current capacity is 400k vehicles per annum and less 20% of that is dedicated to Indian sales. Now, with the planned capacity expansion and only Renault Kwid being the new product planned, over 85% of the production will be for exports alone. That is a HUGE number on any yardstick. I do not think any other manufacturer is using Indian as an export hub as Renault-Nissan does. Pretty awesome to think "Made in India" cars running all over the globe - Looks like this is one company taking PM's dream of Make in India very seriously.
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Old 12th June 2015, 10:35   #6
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Default Re: Big investments lined up in the Indian Auto sector!

Quote:
Originally Posted by GrammarNazi View Post
Maybe by having an Indian Automotive Research Organisation, hope our government sets up RnD institutions just like ISRO, DRDO etc. to help us be provided with safer cars at affordable(low) prices. Possibly through companies that have "other than just profit" motive or rather just the decency to make good, reliable & safe cars.
The Govt. is already working on that front through the NATRIP Project.

Quote:
National Automotive Testing and R&D Infrastructure Project (NATRIP), the largest and one of the most significant initiatives in Automotive sector so far, represents a unique joining of hands between the Government of India, a number of State Governments and Indian Automotive Industry to create a state of the art testing, validation and R&D infrastructure in the country. The project aims at creating core global competencies in automotive sector in India and facilitate seamless integration of Indian automotive industry with the world as also to position the country prominently on the global automotive map.
More info here:

http://www.natrip.in/
http://en.wikipedia.org/wiki/NATRiP
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