IIPM PUBLICATION
According to the Auto
Component Manufacturers Association (ACMA), the automobile industry, as a whole, is expected to grow at 18.2% and will touch $40-50 billion by 2014. The exports for the sector for 2006-07 were at $2.7 billion; up by 13.1%. According to ACMA, India’s share in world auto components is expected to reach 3% by 2015-16. The profits of the major players in the sector also replicates prevalent trends. In terms of profits, Maruti Udyog’s profits increased by 31.3% to Rs.15.61 billion, while Bajaj Auto’s profits stood at Rs.12.37 billion. Tata Motors clocked net profits of Rs.19.13 billion. Riding on Scorpio’s success, M&M’s profit surged by 24.62% to Rs.10.68 billion. Amidst this hoopla of bullishness, Hero Honda proved to be a laggard with profits dropping by 13.3% to Rs.8.5 billion.The key drivers remain rising the demand for four-wheelers and two-wheelers – a by-product of growing disposable income – fast expanding GDP and the entry of global automobile firms. Apart from these, a continued tariff reduction has also benefitted the sector’s growth. The tariff rate was brought down to 12.5% this year from 35% in 2001. India emerging as one of the key transport equipment centers in Asia is a non-question. What remains to be seen is how massively would Indian consumers be able to contribute to global players’ profits and sales.
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Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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