The Indian automobile industry has come a long way since in the first car ran on the streets of Bombay (now Mumbai) in 1898. The initial years of the industry were characterized by unfavorable government policies. The real big change as we see in the industry today, started to take place with the liberalization policies that the government initiated in the 1991. The liberalization policies had a salutary impact on the Indian economy and the automobile industry in particular.

 

Indian Automobile Industry—Recent Trends

The increased demand for Indian automobiles has resulted in a large number of multi-national auto companies, especially from Japan, U. S. A., and Europe, entering the Indian market and working in collaboration with the Indian firms. Also, the institutionalization of automobile finance has further paved the way to sustain a long-term high growth for the industry.

 

Indian Auto Components Industry

The entry of Maruti in the 1980s marked the beginning of the second phase of the industry. The autoancillary industry in the country really showed a spurt in growth during this period. This period witnessed the emergence of a new generation of auto ancillary manufacturers who were required to meet the stringent quality standards of Maruti’s Korean collaborator Suzuki of Japan.