The Hindustan Ambassador dominated India's automotive market from the 1960s until the mid-1980s and was manufactured until 2014.Fiat 1100D, built under license by Premier Automobiles Limited (PAL), later re-christened 'Premier Padmini', was the Ambassador's only true competitor.
The 1952 Tariff Commission
In 1952, the Indian government appointed the first Tariff Commission, whose purpose was to come out with a feasibility plan for the indigenization of the Indian automobile industry. In 1953, the commission submitted its report, which recommended categorizing existing Indian car companies according to their manufacturing infrastructure, under a licensed capacity to manufacture a certain number of vehicles, with capacity increases allowable, as per demands, in the future. The Tariff Commission recommendations were implemented with new policies that would eventually exclude companies that only imported parts for assembly, as well as those with no Indian partner. In 1954, following the Tariff Commission implementation, General Motors, Ford, and Rootes Group, which had assembly-only plants in Mumbai, decided to move out of India.[11]
The Tariff commission policies, including similar restrictions that applied to other industries, came to be known as the Licence Raj, which proved to be the greatest undoing of the Indian automotive industry, where bureaucratic red tape ended up causing demand to outstrip supply, with month-long waiting periods for cars, scooters, and motorcycles.
Passenger cars
Hindustan Motors was established in Kolkata in technical collaboration with Morris Motors to manufacture Morris Oxford models that would later become HM Ambassador.
Addisons, Madras – An Amalgamations Group company, was the agent for Nuffield's Morris, Wolseley, and Riley cars, and Chrysler's Plymouth, Dodge, and De Soto cars and trucks. The first Morris Minor assembled in India and the first car assembled in Madras was driven out from Addison's twin-plants on Smith Road by Anantharamakrishnan on 15 November 1950.[12]
Vehicle Factory Jabalpur – started manufacturing Jonga Light Utility Vehicles and Vahan 1 Ton (Nissan 4W73 Carriers) in India, under license from Nissan of Japan. They were the main troop carriers of the Indian Armed Forces and much more powerful than any other vehicle of their class.Also, Nissan Power Wagon was added to their line.
Mahindra & Mahindra plant established in Mumbai – technical collaboration with Willys to manufacture CJ Series Jeep.
Bajaj Tempo, Pune, now Force Motors – entered into technical collaboration with Tempo to manufacture Tempo Hanseat, a three-wheeler and Tempo Viking and Hanomag, later known as Tempo Matador in India.
Tata Motors established a new plant in Pune with technical collaboration with Mercedes-Benz to manufacture medium to heavy commercial vehicles both Bus and Trucks.
Vehicle Factory Jabalpur started manufacturing Shaktiman trucks with technical assistance from MAN SE of Germany. The trucks were the main logistics vehicle of the Indian Army with several specialist variants. VFJ still is the sole supplier of B vehicles to the Indian Armed Forces.
Heavy Vehicles Factory was established in 1965 in Avadi, Chennai to produce tanks in India. Since its inception, HVF has produced all the tanks of India, including Vijayanta, Arjun, Ajeya, Bhishma and their variants for the Indian Army. HVF is the only tank manufacturing facility of India.
Ashok Leyland was founded in Chennai with Leyland Motors to manufacture medium to heavy commercial vehicles both Bus and Trucks. Ashok Motors also discontinued its Austin venture formed in 1948 to sell Austin A40 and retooled the factory to make trucks and buses.
Simpsons & Co, Madras – part of Amalgamations Group (TAFE Tractors) – had technical collaboration with Ford to manufacture medium lorry and bus chassis, but did not utilise that option until the 1980s.+
Scooters, mopeds and motorcycles
Many of the two-wheelers manufacturers were granted licenses in the early 1960s, well after the tariff commission was enabled.
Ideal Jawa, Mysore – entered into technical collaboration with CZ - Jawa of Czechoslovakia for its Jawa and Yezdi range of motorcycles.
Royal Enfield (India), Madras – had technical collaboration with Royal Enfield, UK to manufacture the Enfield Bullet range of motorcycles.
Bajaj Auto, Poona – had technical collaboration with Piaggio, Italy to manufacture their best-selling Vespa range of scooters and three-wheelers with commercial options as well.
TVS Motors, Madurai/Chennai - started individually and later had technical collaboration with Suzuki Motors, before finally buying them out of the JV.
Automobile Products of India, Bombay (Better known for API Lambretta) – had a technical collaboration with Innocenti of Milan, Italy to manufacture their Lambretta range of mopeds, scooters and three-wheelers. This company was actually the Rootes Group car plant that was bought over by M. A. Chidambaram family.
However, growth was relatively slow in the 1950s and 1960s, due to nationalisation and the license raj, which hampered the growth of the Indian private sector.
The beginning of the 1970s did not see growth potential; and most of the collaboration license agreements came to an end, but with the option to continue manufacturing with renewed branding. Cars were still meant for the elite and Jeeps, now owned by American Motors Corporation, were largely used by government organizations and in some rural regions. By the end of the decade, some developments were made in commercial vehicle segments to facilitate the movement of goods. The two-wheeler segment remained unchanged except for increased sales to the middle class in urban areas. There was an emphasis on having more farm tractors, as India was embarking on a new Green Revolution; and Russian and Eastern bloc imports were brought in to meet the demand.
But after 1970, with restrictions on the import of vehicles set, the automotive industry started to grow; but the growth was mainly driven by tractors, commercial vehicles, and scooters. Cars still remained a major luxury item. In the 1970s, price controls were finally lifted, inserting a competitive element into the automobile market.[13] However, by the 1980s, the automobile market was still dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers.[14] The rate of car ownership in 1981 was about one in every thousand citizens – understandable when the annual road tax alone cost about half the average income of an Indian at the time.[15]
During the eighties, a few competitors began to arrive on the scene. Of the 30,487 cars built in India in 1980, all but six came from the two main players Hindustan and Premier: Standard had led a shadow existence in the latter half of the 1970s, producing only a handful of cars to keep their license active.[15] A new contender was tiny Sipani, which had tried building locally developed three-wheeled vehicles since 1975 but introduced the Reliant Kitten-based Dolphin in 1982. Nonetheless, all eyes were on Maruti, which caused a major upheaval to the Indian automobile industry.[15]
The OPEC oil crisis saw increased need to install or redesign some vehicle to fit diesel engines on medium commercial vehicle. Until the early 1970s Mahindra Jeeps were on Petrol and Premier commercial vehicles had Petrol model options. The Defence sector too had most trucks on Petrol engines.
1984 to 1992
Chemical Biological Radiological and Nuclear Reconnaissance Vehicle (CBRN-RV) manufactured by the AVANI
From the end of the 1970s to the beginning of the 1980s India saw no new models, the country continuing to depend on two decades-old designs. The Sipani Dolphin, which arrived in 1982, was not a serious contender, with its plastic body and without rear doors - essential to Indian car buyers. This situation forced the government to encourage and let more manufacturers into fray.
In 1984 AVANI was established in Medak near Hyderabad. It started manufacturing Infantry Combat Vehicles christened as Sarath, the backbone of India's mechanised infantry. AVANI is still the only manufacturing facility of ICVs in India. To manufacture the high-power engines used in ICVs and main battle tanks, the Engine Factory was set up in 1987 in Avadi, near Chennai. In 1986, to promote the auto industry, the government established the Delhi Auto Expo. The 1986 Expo was a showcase for how the Indian automotive industry was absorbing new technologies, promoting indigenous research and development, and adapting these technologies for the rugged conditions of India.
Post-1992 liberalisation
Tata Indica, launched in 1998
Eventually multinational automakers such as Suzuki and Toyota of Japan and Hyundai and Daewoo Motors of South Korea were allowed to invest in the Indian market, furthering the establishment of an automotive industry in India. Maruti Suzuki was the first and the most successful of these new entries, in part the result of government policies to promote the automotive industry beginning in the 1980s.[14] As India began to liberalise its automobile market in 1991, a number of foreign firms also initiated joint ventures with existing Indian companies. The variety of options available to the consumer began to multiply in the nineties, whereas before there had usually only been one option in each price class. By 2000, there were 12 large automotive companies in the Indian market, most of them offshoots of global companies.[16]
Slow export growth
Exports were slow to grow. Sales of small numbers of vehicles to tertiary markets and neighbouring countries began early, and in 1987 Maruti Suzuki shipped 480 cars to Europe (Hungary). After some growth in the mid-nineties, exports once again began to drop as the outmoded platforms provided to Indian manufacturers by multinationals were not competitive.[17] This was not to last, and today India manufactures low-priced cars for markets across the globe. As of 18 March 2013, global brands such as Proton Holdings, PSA Group, Kia, Mazda, Chrysler, Dodge and Geely Holding Group were shelving plans for India due to the competitiveness of the market, as well as the global economic crisis.
Emission norms
In 2000, in line with international standards to reduce vehicular pollution, the central government unveiled standards titled "India 2000", with later, upgraded guidelines to be known as Bharat Stage emission standards. These standards are quite similar to the stringent European emission standards and have been implemented in a phased manner.
Bharat Stage IV (BS-IV) was first implemented in 13 cities — Agra, Ahmedabad, Bengaluru, Chennai, Delhi (NCR), Kanpur, Kolkata, Lucknow, Hyderabad, Mumbai, Pune, Surat, Solapur — in April 2010, and then in the rest of the nation in April 2017.
In 2019, in line with international standards to reduce vehicular pollution, the central government of India announced the introduction of BS-VI norms to control air pollution, taking effect from 1 April 2020.[18]
Local manufacturing push
India levies an import tax of 125% on foreign imported cars, while the import tax on components such as gearboxes, airbags, drive axles is 10%. The taxes are intended to encourage cars to be manufactured or assembled in India, rather than be imported as completely built units.[19]
Sub-4-metre rule
In 2006, the government of India imposed a new tax structure, which massively impacted the segment. It enables vehicles shorter than 4.0 metres (157.5in) to qualify for a significantly lower excise duty, which is 8 percent as opposed to 20 percent for longer vehicles.[20]Tata Motors was the first to exploit the new tax structure, which redesigned the rear portion of the Indigo sedan, dropping its length to 3,988mm (157.0in) and renamed it as the Indigo CS.[21] The model became significantly cheaper, becoming one of the largest selling three-box cars in the country.[22] Other manufacturers quickly adapted, which led to the release of the shorter Suzuki Swift Dzire, the Honda Brio Amaze, and others.[23]
The majority of India's car manufacturing industry is evenly divided into three "clusters". In the year 2010, around Chennai was the largest, with a 35% revenue share, accounting for 60% of the country's automotive exports, and home of the operations of Engine Factory Avadi, Ford, Hyundai, Renault, Nissan, BMW, Daimler, Caparo, Mini, and Citroën.[24][25]
An emerging cluster is the state of Gujarat, with a manufacturing facility of MG Motors in Halol, Atul Auto in Rajkot and Tata Motors in Sanand.[29] Maruti Suzuki also plans to set up a new greenfield plant in Gujarat.[30]
In 2025, India became world's third largest manufacturer of vehicles, and exported 50% of its two-wheeler production.[1] India's automobile exports have grown consistently and reached $4.5 billion in 2009, with the United Kingdom being India's largest export market, followed by Italy, Germany, the Netherlands, and South Africa.[95]
According to The New York Times, India's strong engineering base and expertise in the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of manufacturing facilities of several automobile companies like Hyundai, Nissan, Toyota, Volkswagen, and Maruti Suzuki.[96]
In 2008, Hyundai alone exported 240,000 cars made in India. Nissan planned to export 250,000 vehicles manufactured in its India plant by 2011.[97] Similarly, US automobile company, General Motors had announced its plans to export about 50,000 cars manufactured in India by 2011.[98]
In September 2009, Ford announced its plans to set up a plant in India with an annual capacity of 250,000 cars, for US$500 million. The cars were manufactured both for the Indian market and for export.[99] The company said that the plant was a part of its plan to make India the hub for its global production business.[100]Fiat had announced that it would source more than US$1 billion worth auto components from India.[101]
In 2009, India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter of cars after Japan (1.77m), Korea (1.12m) and Thailand (0.26m).[102]
In July 2010, The Economic Times reported that PSA Peugeot Citroën was planning to re-enter the Indian market and open a production plant in Andhra Pradesh that would have an annual capacity of 100,000 vehicles, investing €700M in the operation.[103]Citroën entered the market in 2021 with their first offering being the Citroën C5 Aircross.[104]
In recent years, India has emerged as a leading center for the manufacture of small cars. Maruti Suzuki and Hyundai are the two biggest exporters of cars from the country. Nissan also exports small cars from its Indian assembly line. Tata Motors exports its passenger vehicles to several Asian and African markets. In the 2000s, Mahindra & Mahindra prepared to introduce its pickup trucks and small SUV models in the U.S. market, but canceled its plans. As of 2019, it is assembling and selling an off-road vehicle (Mahindra Roxor; not certified for road use) in limited numbers in the U.S.[105] It is also sold in Canada. While the possibilities for the Indian automobile industry are impressive, there are challenges that could thwart future growth. Since the demand for automobiles in recent years is directly linked to overall economic expansion and rising personal incomes, industry growth will slow if the economy weakens.[106]
Mahindra's major overseas markets include Australia, South Africa, New Zealand, United States and South Asia.[107]
Top 10 export destinations
This section needs to be updated. Please help update this article to reflect recent events or newly available information.(September 2021)
India exported $14.5 billion worth of automobiles in 2014. The 10 countries below imported 47.8% of that total.[108]
Rank
Country
Value (US$)
Share
1
United States
1.2 billion
8.4%
2
Mexico
$1 billion
6.9%
3
South Africa
$888.8 million
6.1%
4
United Kingdom
$637.4 million
4.4%
5
Sri Lanka
$596.9 million
4.1%
6
Bangladesh
$592.1 million
4.1%
7
Turkey
$580.4 million
4%
8
Nigeria
$546.8 million
3.8%
9
United Arab Emirates
$433.6 million
3%
10
Colombia
$428.9 million
3%
Exports of Vehicles in India decreased to US$1478.68 Million in 2020 from US$11332.49 Million in 2019.
India is the 4th largest passenger vehicle producer in the world. In 2018–19, it produced 4.06 million cars.[109] Currently, there are an estimated 30 million cars in India.[110]
This list is of cars that are officially available and serviced in India.
MG, Hyundai, Renault, Nissan, Citroën, Jeep, Honda, Toyota, Kia, Volkswagen, Škoda, Audi, Mercedes-Benz, BMW and Mini are the foreign automotive companies or brands that manufacture and market their products in India.
Automobile Products of India or API - founded in 1949 at Bombay (now Mumbai), by the British company Rootes Group,[139] and later bought by M. A. Chidambaram of the MAC Group from Madras (now Chennai).[139] The company manufactured Lambretta scooters, API Three Wheelers under licence from Innocenti of Italy and automobile ancillaries, notably clutch and braking systems. API's registered offices were earlier in Mumbai, later shifted to Chennai, in Tamil Nadu. The manufacturing facilities were located in Mumbai and Aurangabad in Maharashtra and in Ambattur, Chennai.[140] The company has not been operational since 2002.
Escorts Yamaha - in 1984 Escorts formed a joint venture with Yamaha to manufacture motorcycles. In 2008, it became India Yamaha Motor.
Hero Motors is a former moped and scooter manufacturer based in Delhi, India. It is a part of multinational company Hero Group, which also currently owns Hero Motocorp (formerly Hero Honda) and Hero Cycles, among others. Hero Motors was started in the 1960s to manufacture 50cc two-stroke mopeds but gradually diversified into making larger mopeds, mokicks and scooters in the 1980s and the 1990s. Noteworthy collaborators and technical partners were Puch of Austria and Malaguti of Italy. Due to tightening emission regulations and poor sales, Hero motors have discontinued the manufacture of all gasoline powered vehicles and transformed itself into an electric two-wheeler and auto parts manufacturer.
Ideal Jawa - motorcycle company based in Mysore, sold licensed Jawa and ČZ motorcycles beginning in 1960 under the brand name Jawa and later Yezdi.
Standard - produced by Standard Motor Products in Madras from 1949 to 1988. Indian Standards were variations of vehicles made in the U.K. by Standard-Triumph.Standard Motor Products of India Ltd. (SMPI) was incorporated in 1948,[142] and their first product was the Vanguard, which began to be assembled in 1949. The company was dissolved in 2006 and the old plant torn down.
Tatra Vectra - Initial truck partnership with India by Vectra. Replaced by KamAZ. Tatra trucks for sale in India are now manufactured in collaboration with Bharat Earth Movers Limited.
During April 2012, the Indian government planned to unveil the road map for the development of domestic electric and hybrid vehicles (xEV) in the country.[144] A discussion between the various stakeholders, including Government, industry, and academia, was expected to take place during 23–24 February.[144] The final contours of the policy would have been formed after this set of discussions. Ministries such as Petroleum, Finance, Road Transport, and Power are involved in developing a broad framework for the sector. Along with these ministries, auto industry executives, such as Anand Mahindra (Vice Chairman and managing director, Mahindra & Mahindra) and Vikram Kirloskar (Vice-chairman, Toyota Kirloskar), were involved in this task.[144] The Government has also proposed to set up a Rs 740 crore research and development fund for the sector in the 12th five-year plan during 2012–17.[144] The idea is to reduce the high cost of key imported components such as the battery and electric motor, and to develop such capabilities locally. In the year 2017, An Amaravati, Andhra Pradesh based Electric Vehicles manufacturing company called AVERA[145] New & Renewable Energy started electric scooters manufacturing[146] and are ready to launch their two models of scooters by the end of December 2018.[147]
Electric cars are seen as economical long-term investments, as one doesn't need to purchase gas, but needs only to recharge the battery, using renewable energy sources. According to the United States Department of Energy, electric cars produce half as much CO2 emissions as compared to a gas-powered car.[148] According to The Economic Times, 60% of Indian customers expect fuel prices to go up in the next 12 months and 58% expect to buy a new car in the same time frame. Most consumers are looking to buy a car which gives good mileage. According to the same source, 68% of Asian drivers expect higher mileage from their cars due to the higher fuel prices. This has encouraged 38% of Indian automobile consumers to switch to electric or hybrid cars.[149] Due to this change in the market, many companies, such as Toyota, have planned to introduce electric vehicles in India; and Suzuki has tested almost 50 electric prototypes in India already, according to Mashable. In 2019, Hyundai launched India's first electric car, the Kona Electric .[150]
This section needs expansion. You can help by adding to it. (September 2021)
Automotive Research Association of India (ARAI) and standards
The Government of India felt the need for a permanent agency to expedite the publication of standards and development of test facilities[159] in parallel with the work of the preparation of the standards - as the development of improved safety critical parts could be undertaken only after the publication of the standard and commissioning of test facilities. The Ministry of Surface Transport (MoST) constituted a permanent Automotive Industry Standards Committee (AISC) . The Standards prepared by AISC will be approved by the permanent CMVR Technical Standing Committee (CTSC). After approval, the Automotive Research Association of India (ARAI)[160] will publish this standard.[citation needed]
Intelligent Transport Systems (ITS) are globally proven systems to optimize the utilization of existing transport infrastructure and improve transportation systems in terms of efficiency, quality, comfort and safety. Having realized the potential of ITS, Government bodies and other organizations in India are presently working towards implementing various components of ITS across the country.[citation needed]
The first step taken for creation and implementation of ITS was holding a National Workshop titled "User Requirements for Interactive ITS Architecture",[161] which was conducted as a collaboration between SIAM and ASRTU on 26 & 27 February 2015. This was primarily focused on ITS in Public Bus Transportation. Nonetheless, the workshop helped to create the outline for "National Intelligent Transport System Architecture and Policy for Public Transport (Bus)", which was submitted by ASRTU and SIAM to the government[citation needed]
In the 44th & 45th CMVR-TSC, Chairman had directed - standardization activities to be initiated on Intelligent Transportation Systems (ITS) - Vehicle Location Tracking, Camera Surveillance System and Emergency Request Button. The committee intended to extend the above user requirements to all public transportation namely –buses, taxis, etc. The current document covers the requirements for Vehicle Location Tracking and Emergency Button. The other ITS components like PIS, CCTV system, Fare collection etc. are deliberated and would be addressed in later phase and could be added as separate parts to the current document.[citation needed]
Based on these directions, the AISC Panel on ITS has prepared this AIS-140 titled,"Intelligent Transportation Systems (ITS) - Requirements for Public Transport Vehicle Operation". The panel also deliberated and identified the necessary elements for an effective implementation of vehicle level ITS system.[citation needed]
For AIS-140 Devices, in India, connectivity to report location, and Emergency Panic Button signal is through wireless cellular connectivity. There are device focused Cellular Connectivity Offerings like 'eSIM4Things[162]' available in India, which cater to connectivity requirements of AIS-140 devices.[163] eSIM4Things[162] is fully compatible with all AIS-140 devices and with a connectivity manager and a range of tariff plans.
Driverless Technology in India
While there is controversy on possibility of driverless cars in India,[164][165] many startups are working on this technology.[166]
In Auto Expo 2018, Hi Tech Robotic Systemz launched an artificial intelligence-based driver behaviour sensor technology called Novus Aware in partnership with Daimler India Commercial Vehicles (DICV).[167][168]
Performance-linked incentives scheme for future tech
Automotive sector is part of 13 sectors that GoI has introduced Rs 1.97 lakh cr (US$28 b) performance-linked incentives (PLI) schemes for five years in 2021-22 budget.[169] In Sept 2021, to boost the automotive industry with the newer and green technology the Government of India (GoI) launched 3 PLI schemes, a Rs. 26,000 cr (US$3.61 b) scheme for production of electric vehicles and hydrogen fuel vehicles (PEVHV), the Rs 18,000 crore (US$2.5 b) "Advanced Chemistry Cell" (ACC) scheme for new generation advance storage technologies which are useful for the electric vehicles, and Rs 10,000 crore (US$1.4 b) "Faster Adaption of Manufacturing of Electric Vehicles" (FAME) scheme to go green by expediting production of more electronic vehicles and replacement of other types of existing vehicles with the greener vehicles.[170] The Rs. 26,000 cr (US$3.61 b) PLI scheme to boost automotive sector to boost the production of electric vehicles and hydrogen fuel vehicles will also generate 750,000 direct jobs in auto sector.[169] These schemes will reduce pollution, climate change, carbon footprint, reduce oil and fuel import bill through domestic alternative substitution, boost job creation and economy.[170]Society of Indian Automobile Manufacturers welcomed this as it will enhance the competitiveness and boost growth.[169]
↑Bhaktavatsala Rao, C. (20 February 1993). "Structural Configurations and Strategic Investments: Indian Automobile Industry". Economic and Political Weekly. 28 (8/9). Mumbai, India: Sameeksha Trust: M21.
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↑International Business Times, 31 July 2008, "Mahindra & Mahindra buys Kinetic Motor for Rs. 110 crore, forays into two-wheeler market" by Surojit Chatterjee.
↑Bhaktavatsala Rao, C. (20 February 1993). "Structural Configurations and Strategic Investments: Indian Automobile Industry". Economic and Political Weekly. 28 (8/9). Mumbai, India: Sameeksha Trust: M22.
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