Low Cost Assembly And Other Benefits That Indian Automobile Sector Offer Foreign Investors

The automotive industry in India has a history of six decades plus. The industry has evolved from one focused on local businesses to those featuring intense competition involving multinational automobile giants and large-sized domestic enterprises as well as foreign-funded joint ventures. Top global companies are turning their attention to the east and especially to India because of benefits like low cost assembly that India offers. The country’s R&D capability and core technologies have seen a steady improvement over the past decade or so and that’s why many multinational companies have started investing in this sector India.

A Slew Of Favorable Factors That Can Drive Sales and Profits

The manufacturing output in automotive and related electronics is expected to get a major boost over the next decade or so according to market experts and this has definitely resulted into a huge potential for businesses investing in this segment. The increasing local consumption of both passenger and commercial vehicles, combined with the entry of many iconic global brands has made the automotive market highly competitive. This has made low cost assembly in India a definite reality, spurred by the increasing and tough competition.

Businesses planning to invest in the Indian automobile sector are hugely encouraged by the fact that there has been a consistent and impressive growth of around 15 per cent in the industry in past five years. This has made top automobile manufacturers from across the globe sit up and reconsider the potential of India as an automobile market with immense scope for growth over the next few decades.

Facts And Figures That Point Towards a Resurging Industry

The automobile and auto components sector can generate an output of around $140 billion by the end of 2016 according to government estimates. This is not an ambitious figure as the automobile sector amounts for up to 10 per cent of the country’s GDP. It can easily generate employment opportunities for over a million people in the near future if the pace of growth sustains, as it most probably will.

The Indian automobile market now stands at the seventh position in the world. India is now producing 17.5 million vehicles annually. Automotive HVAC components India are among the major growth drivers of this sector. Automobile companies have the opportunity to save as much as 10 per cent to 25 per cent in specific areas of business operation costs in India. It helps them achieve a competitive edge in the global markets and the chance to price their products aggressively and competitively.

Low cost assembly India is definitely one of the biggest attractions for foreign manufacturers looking to run their operations from India. The country offers an abundance of educated and skilled manpower. A good percentage of the workers in the industry have a decent level of education and the best part is that they can communicate in and understand English. Their wages are lower than what workers with the same class of technical competence demand in most European countries.

Factors that are likely to drive business potential northwards significantly include encouraging policies of the government, favorable business environment, and easy accessibility to an affordable yet efficient workforce. These aspects can transform India into a global automobile hub. Already, top brands have started capitalizing on the opportunities.