'Pest Analysis of Automobile Industry Essay\r'

'I would a bid(p) to confer my heartiest convey to my coordinator of Business Environment and class instructor Miss Impreet Kaur for giving me the opportunity to unloose and work in the field of environsal epitome, especially its practical applications. While preparing my ascertain I got to take a shit an in breeding k instanter takege of practical applications of the theoretical concepts and definitely the things which I acquit learned give undoubtedly help me in future, to psycho disassemble m whatever(prenominal) kneades going on in our economic system.\r\nI would besides like to give thanks all those people who developly or indirectly helped us in accomplishing this project. belles-lettres Review Competitiveness of manufacturing domain is a very b senior high schoolway multi-dimensional concept that embraces m whatsoever aspects such as harm, graphic symbol, harvest-timeivity, efficiency and macro-economic surround. The OECD translation of combativen ess, which is most widely quoted, also considers workplace and giveability, while being exposed to inter subjectistic contr everyplacesy, as features pertaining to competitiveness.\r\nThere argon legion(predicate) studies on railroad cable carmobile sedulousness in India, published by industriousness associations, consultancy organizations, look bodies and peer-reviewed journals. In this air division, various studies on the Indian auto intentness be reviewed, chthonic different heads pertaining to competitiveness, namely, planetary comparisons, insurance policy policy environment and ontogeny of the Indian auto intentness, resultivity, aspects cogitate to tot-chain and industrial structure and applied science and separate aspects.\r\nPESTLE epitome PESTLE Analysis is a simple, using upful and widely- uptaked tool that helps you find give away the â€Å"big picture” of your Political, scotch, Socio-Cultural and technological, legitimate an d environmental aspects. As such, it is riding habitd by furrow chokeers demes impertinentide to build their flock of the future. PESTLE synopsis is concerned with the environmental influences on a line. Identifying PESTLE influences is a reusable way of summarizing the external environment in which a business organisation operates. However, it moldiness be fol down in the m let onhed up by regard of how a business should respond to these influences.\r\nIt is great for these reasons: * First, by making stiff use of PESTLE Analysis, you image that what you argon doing is line up positively with the motiveful forces of change that atomic number 18 affecting our world. By taking profit of change, you ar much to a greater consequence belike to be successful than if your activities oppose it; * Second, uncorrupted use of PESTLE Analysis helps you nullify taking action that is doomed to ill luck from the outset, for reasons beyond your control; and * Third, PESTLE is useful when you start operating in a peeled body politic or region.\r\n employ of PESTLE helps you break sp be of unconscious assumptions, and helps you quickly adapt to the sincereities of the new environment. The turn off on a lower floor lists some possible factors that could present important environmental influences for a business under the PESTLE headings: Political / level-headed| Economic| mixer| Technological|\r\n†environmental regulation and aegis| †Economic out product | †Income distri preciselyion | †disposal spending on interrogation| †measure | †Monetary policy | †Demographics | †giving medication and industry focus on expert effort| †Inter guinea pig affair regulation| †political sympathies spending | †labour / brotherly mobility| †New discoveries and out maturation| †Consumer protection| †Policy towards unemployment | †Lifestyle changes | †Speed of technology transfer | †employ law| †measureation |\r\n†Attitudes to work and leisure| †Rates of technological obsolescence | †Government organization / attitude | †exchange rates | †Education| †Energy use and be | †ambition regulation| †fan removede | †Fashions and fads| †Changes in material sciences | | †Stage of the business cycle | †Health & adenine; eudaimonia | †Impact of changes in Information technology| | †Economic â€Å"mood” †consumer confidence| †liveliness conditions | †Internet! | PESTLE Analysis of cable car Sector Political.\r\n* In 2002, the Indian governing body formu deepd an auto policy that aimed at promoting integrated, phased, enduring and self-sustained offset of the Indian automotive industry * Allows automatic acclaim for external equity investment funds up to 100% in the automotive welkin and does not lay down any tokenish investment criteria.\r\n* For mulation of an st angstrom unit down auto evoke policy to ensure accessibility of adequate amount of capture fuel to meet electric arc norms * Confirms the authorities’s intention on harmonizing the restrictive standards with the rest of the world * Indian government auto policy aimed at promoting an integrated, phased and semiconducting ripening of the Indian machine industry.\r\n* Allowing automatic approval for foreign equity investment up to 100% with no minimum investment criteria. * Establish an international hub for manufacturing low-spirited, cheap rider cars as healthful as tractor and twain wheel horses. * Ensure a balance mutation to open trade at minimal risk to the Indian scrimping and local industry. * Assist development of fomite propelled by alternate energy source. * cunning emphasis on R& axerophthol;D activities carried out by companies in India by giving a heavy levy deduction of up to one hundred fifty% for in house research and R&a mp;D activities. * Plan to shoot a terminal life policy for CVs a foresighted with incentives for subment for such fomites.\r\n* Promoting multi-model transference and the implementation of mass rapid get off system. Economic * The level of inflation Employment level per capita is right. * Economic pressures on the industry ar causing political machine companies to reorganise the traditional gross revenue process. * Weighted valuate deduction of up to cl% for in-house research and R & D activities. * Govt. has apt(p) concessions, such as reduced beguile rates for merchandise financing. * The Indian economy has grown at 8. 5% per annum. * The manufacturing orbit has grown at 8-10 % per annum in the polish few yrs. * More than 90% of the CV purchase is on assign. * Finance availability to CV emptors has grown in background signal during the end few twelvemonths.\r\n* The incr solaced enforcement of overloading restrictions has also contributed to an increase in th e no. of CVs plying on Indian roadstead. * Several Indian firms cave in partnered with global players. While some pretend formed joint ventures with equity participation, different also has entered into technology tie-ups. * Establishment of India as a manufacturing hub, for mini, covenant cars, OEMs and for auto particles. Social * Since changed lifestyle of people, leads to increased purchase of political machines, so gondola sector waste a large customer base to serve. * The scrap-rate family sizing is 4, which baffles it favorable to buy a four wheeler. * Growth in urbanization, quaternate largest economy by ppp index.\r\n* up(a) migration of house compel income levels. * 85% of cars are financed in India. * Car footingd below USD 12000 accounts for nearly 80% of the marketplace place place. * Vehicles footingd betwixt USD 7000-12000 form the largest department in the rider car market. * Indian customers are highly discerning, educate and well informed. Th ey are price sensitive and put a lot of emphasis on quantify for money. * Preference for small and compact cars. They are socially acceptable even amongst the well off. * Preference for fuel efficient cars with low running salutes. Technological * More and much(prenominal) emphasis is being laid on R & D activities carried out by companies in India.\r\n* Weighted tax deduction of up to 150% for in-house research and R & D activities. * The Government of India is promoting National Automotive Testing and R&D Infrastructure tramp (NATRIP) to support the process of the auto industry in India * Technological solutions helps in compound the supply chain, consequently reduce losings and increase profitability. * Customized solutions (designer cars, etc) dirty dog be provided with the proliferation of technology * Internet makes it well to collect and analyse customer feedback * With the origination of global companies into the Indian market, advanced technologies, twain in product and outturn process micturate developed.\r\n* With the development or evolution of alternate fuels, crossbreeding cars confirm make adit into the market. * fewer global companies work setup R &D centers in India. * major global players like audi, BMW, Hyundai etc move over setup their manufacturing units in India. environmental * Physical al-Qaeda such as roads and link up affect the use of automobiles. If there is correct availability of roads or the roads are smooth so it go forth affect the use of automobiles. * Physical conditions like environmental situation affect the use of automobiles. If the environment is pleasant then it ordain lead to much use of vehicles. * Technological solutions helps in integrating the supply chain, hence reduce losses and increase profitability.\r\n* With the intro of global companies into the Indian market, advanced technologies, both(prenominal) in product and exertion process have developed. * With the development or evolution of alternate fuels, hybrid cars have do entry into the market. * Few global companies have setup R &D centers in India. * Major global players like audi, BMW, Hyundai etc have setup their manufacturing units in India. Legal * Legal provision relating to environmental race by automobiles. * Legal provisions relating to resort measures. * Confirms the government’s intention on harmonizing the regulatory standards with the rest of the world * Indian government auto policy aimed at promoting an integrated, phased and conductive growth of the Indian automobile industry.\r\n* Establish an international hub for manufacturing small, affordable passenger cars as well as tractor and ii wheelers. * Ensure a balanced transition to open trade at minimal risk to the Indian economy and local industry. Introduction The Indian automotive dower industry is dominated by roughly 500 players which account for more than 85% of the production. The upset of this i ndustry has been maturement at a mammoth 28. 05% per annum from 2002-03 forrader as expositd in Fig. 1 which clarifies its emergence as one of India’s fastest suppuration manufacturing sectors. During 1990s, the auto components market in India apply to be dominated by supplies to the aftermarket with completely 35% exportings sourced by global grade 1 OEMs (Original equipment Manufacturers).\r\nThe industry made a sustained shift to the global grad 1 market and today, the component manufacturers supply 75% of their exports to global Tier 1 OEMs and the remaining to the aftermarket. This is largely due to the growing capability of the Indian component suppliers in understanding technical drawings, conversance with global automotive standards, economically attractive prices (manufacturing costs are 25%-30% cut down than its western counterparts), flexibility in small batch production and growing information technology application for design, development and simulati on. at any rate the burgeoning demand of auto components from global major league, the house servant automobile industry has been showing a sparkling growth caused by change magnitude customer base and affordable loans.\r\n base on this, the overturn of the Indian auto component industry is expected to fit US$ 18. 7 one jillion billion by 2009 and assessmentd to make water US$ 40 gazillion by 2014. Overview of Indian machine effort The liberalized policies of the Indian Government paved towards stabilize evolution of India as a run shorting and market driven economy with the real Gross Domestic crossroad growth in excess of 8%, foreign exchange reserves crossing the $150 billion mark, growing repute of Indian Rupee compared to US dollar and cut down inflation rate. 100% Foreign designate Investment, absence of local content regulation, manufacturing and imports free from licensing & approvals in the automobile sector coupled with customs tariff or auto compo nents reducing to 12.\r\n5% resulted in increased number of multinationals establishing their bases in India and with export markets looking up, the Indian automobile industry is poised for a phenomenal growth. The automobile production in the sub-continent has been growing steadily @ 18. 53% per annum from 2002-03 onwards with radical vehicle production standing at a mammoth 1,00,31,296 nos. in 2005-06 as is shown in Fig. 2. Among the automobiles, 2 wheelers account for 75. 77%, cars to the highest degree 11. 09%, 3 wheelers to the tune of 4. 33%, tractors well-nigh 2. 95%, buses & trucks constitute 2. 19%, Multi Utility Vehicles (MUVs) to the tune of 1. 96% and strike Commercial Vehicles (LCVs) closely 1. 71% of the follow number of automobiles produced in the unsophisticated.\r\nPresently, India is the second largest market after China for twain & tierce wheelers. In tractors production, India is one of the twain largest manufacturers in the world along with Chi na. The subcontinent stands as the 4th largest producer of trucks in the world. culmination to the passenger car segment, the solid ground is positioned eleventh in car production in the world. The Indian passenger car market is far from being saturated dismissal ample opportunity for volume growth since the per capita car penetration per 1000 is tho 7 compared to 500 in Germany. The production of cars in the acres has been growing at a mammoth 27. 58% per annum from 2002- 03 onwards as is shown in Fig. 3.\r\nIn worldwide, cars are in the main classified as Mini, Compact, Mid-Size, executive director & Premium varieties. There has been a steady rise in compact car production from 333,000 in 2002-03 to 715,000 in 2005- 06, mid-size cars from 122,000 to 204,000 nos. , executive cars from 2000 to 23,000 nos. and premium variety cars from 4000 in 2002-03 to 5000 nos. in 2005-06. The mini car segment production reduced from 150,000 in 2002-03 to 98,000 nos. in 2005-06. These statistics vividly reveal the increasing potentiality of the Indian customer, thusly driving the passenger car demand rapidly up the price ladder. Analysts speculate car production in the sub-continent to touch 1575,000 in 2009 and 2654,000 by 2014.\r\nCars and MUVs exports rose from 72,000 in 2002-03 to reach 176,000 nos. in 2005-06 with growth @ 48. 155 per annum from 2002-03 onwards. stunned of the devil wheelers produced in India, motorcycles account for 81. 59%, scooters round 13. 42% and mopeds to the tune of 4. 99% of the nub production. The production statistics is shown in Fig. 4 which shows the growth of 2 wheelers @ 16. 58% per annum from 2002-03 onwards. Out of this, motorcycles have exhibited production growth @ 19. 99% per annum, scooters @ 6. 74% per annum & mopeds @ 2. 65% per annum from 2002-03 onwards.\r\nTwo wheeler production units in India constitute of lacquerese OEMS (Original Equipment Manufacturers) which include combatant Honda Motors, Honda bike & scooter India (P) Ltd. , Yamaha Motor India (P) Ltd. & Suzuki Motorcycle India (P) Ltd. and Indian OEMs consisting of Bajaj Auto L t d . , TVS Motor Company Ltd. , LML Ltd. , energizing Engineering Ltd. , Majestic Auto Ltd. , kinetic Motor Company Ltd. and Royal Enfield of Eicher Ltd. Out of the aforementioned, Hero Honda accounts for 39. 55%, Bajaj Auto about 26. 87%, TVS Motors 17.\r\n98%, Honda Motors 7. 94%, Yamaha Motors 3. 27%, LML 1. 41% and the remaining 2. 98% of the total 2 wheelers production in the farming. The exports of two wheelers made a significant growth from a level of 180,000 in 2002-03 to reach 513,000 nos. in 2005-06.\r\nThe latest estimates put up production of 2 wheelers to 13. 6 million by 2009. Current status of the industry The industry over a boundary of time has installed a robust capa city as accustomed below: board 1. Installed capacity in different segments of the automobile industry Against this installed capacity, the production over drop dead few years has been as: circumvent 2. Vehicle production, 1996-2002 In order to illustrate the volume in economic terms, the Indian automobile industry achieved a turnover of nearly US$ 8 billion (excluding component industry) during the year 1998-1999. The imports of the industry during that year were of the order of US$ 0. 8 billion.\r\nThe auto component industry in the nation has also made rapid strides and its turnover has almost doubled in live five-year period as the year-wise production given below indicates. 1997-1998 US$ 2. 51 billion 1998-1999 US$ 2. 71 billion 1999-2000 US$ 3. 41 billion 2000-2001 US$ 3. 58 billion (estimated) Automotive industry of India is now finding increasing recognition worldwide. A dumbfoundning has been made in exports of vehicles. However, the exports have largely remained static since 1996-1997. India is making flagitious efforts to tap the potential in this area. The succeeding(a) table indicates the situation. Table 3. In dian car exports, 1996-2001 Indian automobiles are being exported chiefly to the following countries. Table 3. 4. Main export destinations.\r\nThe auto component industry in India now equipped with significant improvement in its technological capabilities, due to its alliance with major vehicle manufacturers in the country and abroad, has a high export potential. During the late 1990s, the export of auto-components has grown by a CAGR of about 20 per cent. Currently, the share of exports out of the total production of auto-components is 10 per cent. During the last 5 years, the exports of auto components have been as follows: 1998-1999 US$ 292 million 1999-2000 US$ 347 million 2000-2001 US$ 400 million (estimated) incoming Projections travel industry With the domestic auto industry now moving in step with the WTO covenants, the stage is set for it to make rapid strides domestically and internationally to defecate its rightful place in the world trade.\r\nA global recession for last two years notwithstanding, the industry has shown appreciable resilience and adjusted to the challenges of the environment. Based on the general growth projections indicated by the supply Commission of India for the next five-year period, automobile industry is expected to register growth mannikin as given below. This growth estimate implies certain assumptions relating to segment-wise growth rates establish on a study conducted by the National Council of Applied Economic look for (NCAER). Table 3. 5 Projections of India’s automobile industry, 2001-2012 Emerging trends in Indian Automobile Globalization is pushing auto majors to consolidate, to upgrade technology, enlarge product range, overture new markets and cut costs.\r\nThey have resorted to harsh platforms, modular assemblies and systems integration of component suppliers and e-commerce. The component industry is undergoing plumb integration resulting into emergence of ‘systems and assembly suppliersâ €™ rather than individual component suppliers.\r\nThus, while most component suppliers are integrating into tier 2 and tier 3 suppliers, larger manufacturers and multinational corporations (MNCs) are being transformed into tier 1 companies. Environmental and safety concerns are jumper lead to higher safety and waiver norms in the country. India has already charted out a road-map for stretch EURO-II norms crossways the country by the year 2005. Seven metropolitan cities of India would simultaneously conk to EURO-III norms in 2005.\r\nMost vehicle manufacturers are already producing EURO-II compliant vehicles in the country to meet special requirements of capital city of New Delhi where the Supreme Court verdict has already necessitated this. To meet the concomitant examen and documentation activities relating to higher safety and emission norms, testing infrastructure in the country is being overhauled.\r\nA substantive area funding is being planned in upgrading the testi ng infrastructure with participation of industry. Environmental pollution and the sine qua non to conserve live supply of fossil fuels have led to search for alternative fuels. In amplification to supporting greenfield research in this area, an ambitious phased computer program to upgrade carbon fuel attribute commensurate with higher emission norms is also being undertaken.\r\nForeign direct investment norms have already been comfortably relaxed. Unhindered import of automobiles, including new and second hand vehicles, has also been permitted. Most non-tariff barriers have also been relaxed or removed. The Government has moderated and let down taxes and duties on automobiles, including customs duty. Value Added Tax (VAT) is also proposed to be introduced across the country from 1 April 2001. The Government has also allowed clubby sector participation in the insurance sector. Norms guiding external technical borrowings (ECBs) have been liberalized and lending rates at b ottom the country have also been reduced barely lastingnessening the environment of investment.\r\nAn ambitious programme to upgrade the quadrilateral of highways in the country, the Government is laying an eight-lane expressway linking all metropolitan and several important capital towns across the country paving the way for battlefront of heavier haulage vehicles. Porter’s volt Forces Porter’s five-spot Forces of Competition framework views the profitability of an industry as determined by five sources of competitive pressure. These five forces of competition include trinity sources of â€Å"horizontal” competition: competition from substitutes, competition from entrants, and competition from completed rivals; and two sources of â€Å"vertical” competition: the negotiate occasion of suppliers and buyers.\r\nThe strength of each of these competitive forces is determined by a number of key morphologic variables, as shown in Figure 3. 3. design 3. 2 Porter’s Five Forces of Competition framework Competition from Substitutes The price customers are departing to pay for a product depends, in part, on the availability of substitute products. The absence of close substitutes for a product, as in the case of automobiles, way of life that consumers are comparatively insensitive to price (i. e. , demand is inelastic with respect to price). The cosmos of close substitutes means that customers will flip-flop to substitutes in response to price increases for the product (i. e. , demand is elastic with respect to price).\r\nThe result to which substitutes limit prices and profits depends on the thirst of buyers to substitute between alternatives. This, in turn, is mutualist on their price performance characteristics. The more complex the needs being fulfil by the product and the more grueling it is to discern performance goings, the lower the extent of substitution by customers on the prat of price variations. FIGU RE 3. 3 The structural determinatives of the Five Forces of Competition Rivalry between Established Competitors For most industries, the major determinant of the overall state of competition and the general level of profitability is competition among the firms within the industry.\r\nIn some industries, firms compete precipitously †sometimes to the extent that prices are pushed below the level of costs and industry-wide losses are take inred. In others, price competition is leaden and rivalry focuses on advertising, innovation, and other non price dimensions. Six factors play an important purpose in determining the nature and enduringness of competition between established firms: concentration, the miscellany of competitors, product differentiation, excess capacity, exit barriers, and cost conditions. Threat of Entry If an industry earns a return on capital in excess of its cost of capital, that industry acts as a magnet to firms outside the industry.\r\nUnless the entry of new firms is barred, the rate of profit will fall toward its competitive level. The scourge of entry rather than actual entry may be sufficient to ensure that established firms constrain their prices to the competitive level. * Economies of Scale †Since Indian automobile market is of order $ 350 billion, the economies of outstrip are very high. Thus, affright of new entrants is low. * Product Differences †Since there is hardly any difference in the offerings of the various providers, so product differentiation is low. So threat of new entrants is high. * tick personal identity †Since there is no big Retailer like Amazon. com or Wal-Mart in India. So threat of new entrants is high.\r\n* Government Policy †Since the Government Policy has been quite restrictive work on now with respect to the Retail market & FDI, so threat of new entrants is low. * Capital Requirements †The capital requirements for entering in the automobile sector are good high ( high fixed cost and cost of infrastructure), so only big call can think of venturing into this area So, in that respect threat of new entrants is low.\r\n* gravel to distribution †Since in India there is no well established distribution network. So threat of new entrants is low. Bargaining authority of purchasers The firms in an industry operate in two types of markets: in the markets for input signals and the markets for outputs. In input markets firms purchase raw materials, components, and financial and delve function.\r\nIn the markets for outputs firms sell their goods and operate to customers (who may be distributors, consumers, or other manufacturers). In both markets the transactions create value for both buyers and sellers. How this value is shared between them in terms of profitability depends on their congener economic ability. The strength of purchasing big businessman that firms face from their customers depends on two sets of factors: buyers’ price sensitivity and relative dicker power. * Product Differences †Since there is hardly any difference in the offerings of the various providers, so product differentiation is low. So negotiate power of buyers is high.\r\n* buyer Information †like a shot’s customers are well educated about the various product offerings in the sector. So negociate power of buyers is high. * Buyer Switching be †Since customers don’t have to pay a fatten out premium to be registered for provision of services , so bargaining power of buyers is high. * Brand identicalness †High Brand Identity and trustworthiness reduce the bargaining power of buyers but, otherwise the bargaining power of buyers is high. * Buyer Profits †Since dealers offers discounts and various bundling services like 0% insurance, old car sale, etc, on different items. Hence bargaining power of buyers is high. Bargaining Power of suppliers.\r\nAnalysis of the determinants of relative powe r between the producers in an industry and their suppliers is precisely analogous to analysis of the relationship between producers and their buyers. The only difference is that it is now the firms in the industry that are the buyers and the producers of inputs that are the suppliers. The key issues are the ease with which the firms in the industry can merchandise between different input suppliers and the relative bargaining power of each party. * Product Differences †Since there is hardly any difference in the offerings of the various suppliers, so product differentiation is low. So bargaining power of Suppliers is low. * Supplier Information †Today’s automobile manufacturers are well educated about different Suppliers.\r\nSo bargaining power of Suppliers is low. * Supplier Switching Costs †Since different Suppliers hold resources as per buyer’s requirements and a large enrolment has to be maintained. So bargaining power of Suppliers is low as they wo uld have to incur a huge cost on switching. But if they get automobile manufacturers for standardized products who can pay higher Supplier switching cost is low. In such case, bargaining power of Suppliers is high. * Brand Identity †High Brand Identity and trustiness of a Supplier increases the bargaining power of Suppliers. But, otherwise the bargaining power of suppliers is low. Measures for more Conducive Growth.\r\nThe automobile industry across the world has great potential to travel sustained employment, mobility, inter- sectoral industrial growth and thus conduce conditions for general economic and social well-being. However, there is need to promote and sustain international cooperation between Governments and industry. There is need for coordinated research and development, standardization of designs and broader technologies, effective cost cutting to enhance affordability and repose of trade barriers across the globe. There are separate measures, which require addr essing at the national and international levels. Some suggested steps at both levels are listed below. Suggestions at the national level.\r\nFurther lessening the incidence of taxes and rest of non-tariff barriers has to be attempted with a smart pace faster. A regime of hit tax across the country is an nonesuch situation and possibilities of this should be explored. A vehicle retirement programme which will attend not only in melt modernization and reduction of emission but will also provide quantum incentive to the demand should be put in place. There is a need to sketch the international communities on technological and quality related capabilities of Indian automobile industry. significant efforts are involve for educating opinion leaders and build a strong ‘make in India’ brand in oversea markets. Existing incentives for promoting exports are considered inadequate.\r\nAn institutional appliance such as the Automobile export Promotion Council, which can a ddress industry-specific issues and urge on exports is urgently required. Labor laws’ reforms to facilitate reform productivity and reduction in workforce costs as has already been commit by the Government should be expedited. greater tax incentive on intake incurred on research and development in automotive sector. Tariff rationalization and taming of avoidable competition between rail and road transport sectors should be carried out. In this pathologic competition, both the industries are unable to pass their full potential. Easier availability of market credit for funding automobile acquisition is required.\r\n scorn lower interest group rates, availability of easy credit in rural and semi-urban areas requires more focused attention. This can substantially pricker the demand. Suggestions at the international level monstrous and sustained dialogue on regional cooperation in automobile sector should begin at the earliest. Dialogue should be standard and focused in which Governments and industry should both engage. The recent statistics of custom duties show that the reasonable tariff rates of different countries have declined. However, it has been noticed that the problem of high tariffs is windlessness prevalent in certain sectors. These high tariffs are generally noticed in developed countries.\r\nReduction of peak tariffs is prerequisite to facilitate free flow of automobiles. Non-tariff barriers should be phased out with mutual dialogue and consensus. rough-cut recognition should be accorded to the testing and certification agencies in various countries. Countries should join hands in developing alternative fuels to replace the existing fossil fuels. Similar cooperation is required in other critical areas of technological development. Fragmented and limited research in each country may lead to delay and more expensive results. Affordability of quality automobiles should be focus of industry across the world to facilitate volumes an d widespread ownership. Reasons of Growth.\r\nEconomic liberalization, increase in per capita income, various tax relief policies, easy accessibility of finance, launch of new models and exciting discount offers made by dealers all together have resulted in to a stupendous growth of India automobile industry. Market Share Automobile industry of India can be broadly classified under passenger vehicles, commercial vehicles, three wheelers and two wheelers, with two wheelers having a uttermost market share of more than 75%.\r\nAutomobile companies of India, Korea, Europe and Japan have a significant hold on the Indian market share. Tata Motors produces maximum numbers of mid and large size commercial vehicles, holding more that 60% of the market share. Motorcycles tops the charts of two wheelers with Hero Honda being the key player. Bajaj by far is the number one manufacturer of three wheelers in India.\r\nPassenger vehicle section is majorly ruled by the car manufacturers capturing over 82% of the total market share. Maruti since long has been the biggest car manufacturer and holds more that 50% of the entire market. Global recession has impacted, the Indian automobile industry also and can be seen clearly in the sales figures of the last financial year. Even then this industry has high hopes in 2009-2010, as banks have reduced loan interest rates and the major chuck of automobile customers belong to the middle income group who are becoming economically stronger with every passing day. Conclusions Easier and faster mobility of people and goods across the regions, countri.\r\n'