Sunday, October 1, 2023

Rise & Fall of Indian Automobile Industries

Today Maruti Suzuki India Limited is largest cars manufacturer in India. This company Maruti Suzuki India Limited has a market share of 53% in Indian passenger car market. Maruti Suzuki is joint venture between Suzuki motor corporation and Maruti Udyog limited (Government owned company).  Today Suzuki motor corporation has 56.3% of shares.


History of Automobile Manufacturing in India

Maruti Udyog limited in 1982 signed Joint Venture agreement with Suzuki Motors. In beginning Maruti Udyog imported Cars from Japan.  Mass production in India started in December 1983, after 2 years.

Before Maruti Udyog limited, Hindustan Motors Limited was largest Car manufacturer in India. HML was established before 1947 (before patrician of India and Pakistan) with the help of Morris Motors, which was British car manufacturing company at that time, also it was part of British Motor corporation.

Morris Motors was already making and selling cars in Britain and in other countries, so Morris Motors give same design of cars for Hindustan motors. Then first factory of car manufacturing was established in WB(West Bengal) of India in 1948, where production of Morris motor designed Hindustan Motor cars started.

First Car made in India 

First Car was Hindustan 10, based on Morris 10.

After that some other model of Morris cars were copied on the name of Hindustan. From 1948 to 1957 Hindustan motors made Hindustan 14 (Morris oxford MO), Baby Hindustan (Morris Minor), Hindustan Deluxe (Chevrolet Deluxe), Hindustan Landmaster (Morris Oxford series-2).

In 1958 Hindustan motor limited made Hindustan Ambassador which was based on Morris oxford series-3. Today this is the longest running model in this world. Production of this model stopped in 2014. It was called “king of Indian Road”.

This company keep upgrading the cars under various model name Mark-1, mark-2, 3,4 up-to  1990, after that Ambassador nova-1990-1999, Ambassador Avigo and latest was Ambassador Encore.

Passenger cars production in India

We can not say Hindustan Motor limited was only maker of cars in India.

There were other makers like Premier Limited (Established with help of Chrysler Corporation in 1941),  which made Premier Padmini (from 1964-2000). Other car made by Premier Limited in India were Dodge Kingsway, Plymouth Savoy, Plymouth Belvedere, Fiat Uno, Fiat 1100 and Peugeot 309. This car Premier Padmini was very popular until Maruti launched cheap and fuel efficient car Maruti 800.

Standard motor product of India Limited, which made Standard Herald (Version of Standard triumph). Mahindra & Mahindra also made Jeep CJ-3A (1949-1953).  General motors, Ford and Roots Group was also doing assembly in Bombay. But due to traffic commission policies they decided to move out of India, which was very bad for India. After 1953 Indian Government banned fully build up car in India. So from that time manufacturing of Automotive was very limited, but demand was very huge.

Rise of other vehicle production in India

In passenger car manufacturing limited company was available in India. Apart from passenger car segments there were other vehicle production facilities in India, like-

  • Light commercial vehicle manufacturing-Tempo from Bajaj, Jeep from Mahindra & Mahindra (With collaboration of Willys-now Chrysler).
  • Heavy commercial vehicle manufacturing – Saktiman Truck of Indian Army (made with help of German based MAN SE), TATA motors truck and Bus (made with help of Mercedes Benz), Bedford truck of Hindustan motors (made with help of General Motors), Fargo truck of Premier Limited (Made with help of Chrysler),
  • Bike & Motorcycles Manufacturing– Royal Enfield bike, Scooter from Bajaj Auto, Lambretta mopeds made by Automobiles product of India (Made with help of British Rootes Group company), Rajdoot bike made by Escorts group with help of Poland based CEKOP company.

Since there were limited production, all existing manufacturing making limited vehicles with collaboration of other countries, so growth in automobile section was very slow upto 1960. Other factors of damaging Automobile section in India were poor policies of government and License raj.

In 1970 production of light commercial vehicle, heavy commercial vehicle and Bike/scooter slightly increased, which indicate slight growth in automotive sector in India, but this was because of tractor demand in India. Here car was still major luxury item, which production was down. Up-to 1980 Indian passenger car market was dominated by Hindustan motors, Premier Limited and standard Herald with limited production.

In 1982 Sanjay Gandhi bring Maruti project to heal Indian automobile Industry. That time Rajiv Gandhi was prime minister of India, under his government, Delhi AUto Expo started to promote Indian Automobile sector. Maruti Udyog Limited company make collaboration with Suzuki Motor corporation of Japan and stated making Maruti 800 Car in 1984. This car was most successful car and within 1 year it became highest selling car in India. This car hold record of highest selling car up-to 2004.

In 1991 Dr. Manmohan was prime minister of India who propose liberalization in India. Due to which Indian government allow foreign companies to do business in India. Till now up-to 1992 passenger car manufacturing company were Maruti Udyog Limited (With help of Suzuki), TATA motors, Mahindra & Mahindra, Premiers Automobiles, Hindustan Motors. But after 1992 Japanese car maker companies enter in India like- Hyundai, Suzuki Motors and Toyota. But most successful among three was Suzuki in India. By 2000 more than 10 foreign car manufacturing companies enters for business in India.

Second most successful car manufacturing India became Hyundai which bring Hyundai Santro in 1998. By the next 2 year Hyundai Santro become second highest selling car in India.  Which realized Maruti Suzuki company that it can not rule alone in Indian car market. From 1984 to 1998 Maruti had its accords, but this was ended by Hyundai.

Passenger Car market share of OEMs

Maruti Suzuki India Limited sales around 50% passenger cars in India. Second position is Hyundai motors which captures 17% passenger car market in India. Third position is for Mahindra and the Tata, Renault, Honda Cars, Toyota, Volkswagen, Nissan, Ford Motor cars.

Today out of 10 most selling car list you will see 6 to 7 cars of Maruti Suzuki and 3-4 cars of Hyundai.

Automobile manufacturing cluster in India

Major 3 Automobile manufacturing cluster –Southern cluster (Tamil-Nadu, AP), Norther cluster(Gurgaon) and Western cluster (Maharashtra) . Apart from these Gujarat has also manufacturing faculties of Passenger cars. Major OEMs are MG motors, Suzuki motor Gujarat.

Automobile Export trend in India

In Asia major exporter of cars are Japan, South Korea, Thailand, India and China. On first position Japan and 4th position India & 5th position is China.

Globally Germany is no 1 in export, then Japan, USA.

In 2019 China accounted 30% of  global car production, from which 3% cars were exported. Today Globally India position in export is at 22, While china position is 19.

In India Hyundai is biggest exporter. Maruti Suzuki also export directly or with help of Nissan motors for foreign countries. Apart from Hyundai and Maruti Suzuki, other car maker like Ford, Tata, Mahindra & Mahindra, Volkswagen, General motors, Nissan, Fiat and BMW also manufacture and export from India. From India export destination center is USA, UK, Africa, Europe.

In April-March 2020, overall automobile exports registered a growth of 2.95 percent. While Commercial Vehicles and Three Wheelers exports declined by (-) 39.25 percent and (-) 11.54 percent, respectively. However, Passenger Vehicles exports marginally increased by 0.17 percent and Two wheelers exports registered a growth of 7.30 percent in April-March 2020 over the same period last year. 

Maruti 800 Production

Maruti 800 car was made by Maruti Udyog Limited with help of Suzuki motor corporations. This maruti 800 car was copy of Suzuki Fronte. This was 6th generation model of Suzuki fronte. Before Suzuki Fonte SS40S it was manufactured with name Suzuki fonte SS360, Fonte LS10, Fonte 72GL, Suzuki Fonte coupe LC10W, Fonte Hatch LS30 and Suzuki fonte 7S.

Major specification of Maruti 800:-

  • Engine Model- F8D- (4 Speed/5speed)
  • Displacement- 796cc
  • No of cylinders- 3
  • Power- 45BHP
  • RPM- 5500
  • Fuel Type- Petrol
  • No of stokes- 4 stokes
  • Front Brake- Disc
  • Rear Brake-Drum
  • Brake Mechanism- Hydraulics
  • Front Suspension- Macpherson strut
  • Rear Suspension- Coil spring with gas filled absorber
This car was installed with latest developed 4 stroke, 796cc engine, which end Suzuki 2 stoke engine uses.


According to OICA data India is on 6th position globally in vehicle production. First position -China.

If we look only passenger vehicle production, India position is on 4th globally. India has manufactured 5 million car by year 2020. India is gaining Y0Y growth domestics automobile production and overall domestic automobile sales. India is expected to be the world’s third-largest automotive market in terms of volume by 2026. 

Indian Automobile industry currently manufacture 26 million vehicle including cars, commercial vehicle and bikes, truck buses. This industry share 7.1% in India’s GDP and 3.4% in India’s export. Today it is $118 Billion dollar industry, which will become $300bn industry by 2026. 

Today India is Largest tractor manufacturer in world. India is second largest bus manufacturer in world after China. India is largest 2 wheeler manufacturer in world. 

India has target to make 10 million car by year 2030.

Largest car manufacturer is Volkswagen and Toyota. Suzuki position is on 22. Honda position is on 5th.

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