Scope of 3PL service providers in the Indian automobile industry

Abstract

The Indian Automobile Industry, the seventh largest in the world, has demonstrated a tremendousgrowth over the last ten years. India’s automobile industry is currently estimated to have a turnoverof US$ 73 billion. This accounts for 6% of India’s GDP and 22% of manufacturing GDP. According theDirector General, Society of Indian Automobile Manufacturers, industry volumes have increased by3.2 times, from 4.7 million units to 14.9 million units in the last ten years. Domestic vehicle salesincreased from 9.7 million units in 2008-09 to 12.3 million units in 2009-10, registering a growth of26.8% y-o-y. Despite the fiscal slowdown worldwide, the industry grew at an impressive CAGR of12% between 2006 and 2010. The automobile industry ranks sixth in terms of FDI inflow, with 4.54%of total FDI inflows going to the automobile industry. During the period from April 2000 to May2011, cumulative FDI inflow to the automotive sector; including both automobile and autocomponents totalled US$ 6247 million. India achieved the position of top growing passenger marketin the world during the January-June 2011 period overtaking the US. During the same six monthperiod, the passenger vehicles market in India grew by 18.2% - fastest in the world.The automotive manufacturing industry comprises of the production of two wheelers, passengervehicles, commercial vehicles and three wheelers. Exhibit 1 depicts the different market segments.