India becomes fifth largest car manufacturer in the world

India has surpassed South Korea to become the fifth largest car manufacturing nation in the world. It now trails countries like Germany, Japan, USA and China. India produced 25.7 lakh cars from January - June 2016, while South Korea manufactured 25.2 lakh units during the same period.

Last year, South Korea produced 45.5 lakh cars, as compared to India's manufacturing log of 41.2 lakh. However, from the past one year, the South Korean automotive industry is facing labour unrest and a demand slump. Workers of the Hyundai-Kia group have gone on a long strike, demanding an increase in their wages. This has adversely hit production of Korea's biggest auto company. Moreover, increasing taxes on car purchases have kept customers at bay, thus negatively affecting local demand.

However, the Indian automotive market is witnessing a steady growth rate. With the 7th pay commission, automakers are expecting a surge in demand over the next year. Exports from the country too have seen a growing curve, under the Government's Make in India campaign.

As a result, India is expected to hold on to its 5th position for a longer time. Meanwhile, South Korea might also be overtaken by Mexico in the near future, as Kia has set up production plants there in order to avoid losses due to Korea's labour unrest.

Source: Times of India