Automotive industry in India

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.

The beginning of the 1970s didn't 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.

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.

[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] 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.

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.

Eventually multinational automakers such as Suzuki and Toyota of Japan and Hyundai 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.

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.

[22] Other manufacturers quickly adapted, which led to the release of the shorter Suzuki Swift Dzire, the Honda Brio Amaze, and others.

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 Heavy Vehicles Factory, Engine Factory Avadi, Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, Mini, Citroën and Datsun.

[106] Similarly, US automobile company, General Motors had announced its plans to export about 50,000 cars manufactured in India by 2011.

[107] In September 2009, Ford Motors announced its plans to set up a plant in India with an annual capacity of 250,000 cars, for US$500 million.

[110] 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).

[111] 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.

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.[114] It is also sold in Canada.

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.

MG, Hyundai, Renault, Nissan, Citroën, Jeep, Honda, Toyota, KIA, Volkswagen, Škoda, Audi, Mercedes-Benz, BMW and MINI are the foreign automotive companies that manufacture and market their products in India.

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.

[151] 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.

[151] 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.

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",[169] which was conducted as a collaboration between SIAM and ASRTU on 26 & 27 February 2015.

While there is controversy on possibility of driverless cars in India,[172][173] many startups are working on this technology: 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).

[177] 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.