What factor contributed most to the acceleration of the development of automobile?
Answers
India has witnessed a rapid growth in the auto mobile sector. The reason behind the growth is as follows :
1. Fuel economy : high rates of fuel have forced competition among the companies to focus on delivering performance-oriented products.
2. Demography : India is a huge market for automobile industries. It has a great demand for 2 wheeler and cheap 2 wheeler vehicles. Increased affordability has attracted many towards buying vehicles.
3. FDI : govt has allowed 100% FDI in automobile industries. kawasaki, honda, hundai, etc have set up their centers in India.
4. Banking infrastructure : financial inclusion, availability of car loans has helped.
5. Improved infrastructure : development of roads, highways (golden quadrilateral) promoted heavy vehicle industry.
6. Increase in demand from defense and agriculture industry of trucks, tractors etc.
7. Cheap skilled workers have reduced the production cost and also attracted FDI.
8. The Government technology modernization fund is concentrating on establishing India as an auto-manufacturing hub.
9.India has to keep up the progress as there will be competition from the rest of the world soon by the expansion of technology. self governing vehicles, more diesel powered cars, high performance hybrid cars will hit market soon.
10. Raw material: Raw material such as steel, electricity, tyres are available in India. Ex: Chennai automobile sector is located near Salem steel plant
11. Labour: India has presence of both cheap skilled as well as unskilled labour. Ex: Automobile center at delhi and mumbai beacuse of presence of cheap skilled labour
12. Port location: Helps in import of machinery part and export of final product. Ex: Mumbai and chennai port location make them favorable position for industry
13. Transport: Mumbai, Delhi, Chennai, Pune are well connected with both rail transport as well as road transport which help in transport of goods.
14.Market: India has ready market for automobile industry especially metro cites like Delhi, Mumbai
15.Govt. policy:Government policy for 100% FDI through automatic route, testing labs, tax benefits are boon for the sector
16. Strategic location of india: India's strategic location in indian ocean with accessibility towards east asia as well as Middle east and africa is boon for india.
However there are some issues like delay in constructing dedicated freight corridors, interrupted power supply, increased bank rate which need to be overcome to further increase growth of automobile sector and make Indian campaign 'Make in India' great success.