As per the results exhibited by the automobile industry in 2015 what turns out is that India is really emerging as the new destination when it comes to component manufacturing in the global automobile market due to its vibrant and energetic youth which comprises of its population significantly and buoyant economy compiled with the ever growing foreign direct investment. As per the figures India definitely has good scope of improvement but it is really catching on while the other major giant in car exports that is China has been found to exhibit a slowdown.

Advent of FDI in India in the Automobile Industry

Foreign direct investments have come up and developed in the form of joint ventures formed between local partners and international automobile manufacturers in the auto industry. It has been found that the majority of the automotive giants do not perform exceptionally well when it comes to Asia in terms of car exports except for some of the developed economies like South Korea and Japan.  The automobile manufacturers have been found to dominate the Chinese market at the higher end, laying good amount of focus on the domestic market of China which is large. But the struggle for the lower end of the market is too tough since they continuously work to improve and expand overseas sale by developing better designs and quality. As a result most of the vehicles produced in China tend to stay back in the nation and light trucks and passenger vehicles see exports to other nations. This is the reason why it has slowed down while the car companies in India have really worked their best to improve their exports.

Competition across Asia

In the fiscal year 2015-2016 India has taken the 5^th position in terms of exports among 10 nations performing across Asia, pushing China behind which has been a very significant move. The numbers have been collected by SIAM statistics which showed car exports for FY2016 tantamount to 532,053 units in total for India car exports (passenger cars). This figure was higher than the passenger cars exported by China for the same fiscal year which was 409,800 units as recorded by the China Association of Automobile Manufacturers. India has managed the 5^th rank in terms of car exports in India while it has secured the 20^th rank among the top car exporting countries around the world making China the 22^nd as listed in a data by 2015 Forbes 2000 list.

It may be termed as a good move but beating China should not be a milestone for India for long as it had previously beaten China even in the year 2009 with its automotive exports amounting to 201,138 cars in the first half of the year while China’ figure was 164,800. And moreover the fact that India is doing well even in terms of GDP should more so bolster the fact that it has good amount of reasons to lead and leave behind performing nations like China and later hopefully leave behind Thailand as well in terms of car exports.

In the last fiscal during the same span of time the manufacturing sector had shown a growth of 6.6% while in the recent year the manufacturing sector of the country has shown an all time high percentage of 9.3% thus making it really supportive for the country to push its boundaries and export automotive parts and cars in general to the international market. A very impressive annual growth rate of 8.68% was shown by the country as opposed to China which was 4.3% and increasing its passenger car sales significantly rising to a percentage of 10.18%.

India’s Contribution to the Global Automobile Industry

However in the global market India contributes probably very little as it may seem apparently with a very flimsy percentage of just 0.8% and having exports valuing a figure of $5.40 US billion while Thailand and China contributes 1.4% and 0.6% respectively. Developed economies like Japan have a contribution of 12.8% while South Korea has a percentage of 6.2% followed by Thailand and Turkey consecutively. The lowest performers among the Asian countries are Russia and Hong Kong securing the 9^th and 10^th position in the chart with a percentage of 0.25 and 0.1% respectively.

For India the percentage may seem very miniscule in terms of its share in the larger pie but then the figure cannot be ignored since it is growing and judging by the saturation appearing in American and European market the share in the pie can be significantly improved.  The demand which is ever growing in the consumer market of these developing economies this percentage figure should not be considered as bleak at all. The top nation in the Asian continent actually ranks second in the world list following right after Germany. India must observe its pattern for doing well since the major market for Japan is Europe and USA and in Asia Japan’s major market concentrates in Indonesia and Thailand. India really needs to work to expand its hold in these regions.

In spite of favourable conditions like FDI, policy making and huge development boosting the infrastructure of the country as a whole, India as a nation still has a lot to move up in terms of increasing its exports despite the growth in standard of living and automotive growth. It is worth noting that some of the smaller nations like Belgium and Czech Republic which do not have a great number of skilled manpower or a large automotive industry do so well compared to India in terms of car exports. Some of the reasons cited by experts for this performance are that government policies in terms of production and taxation are not developed in such way to entice investors, and also that the quality of automobiles do not really live up to the global standards of EPA and Global NCAP which have very strict rules and check when it comes to emissions and safety.

Conclusion

India itself realizes that developing nations like China and itself fail to make a very significant mark due to too many organizations are involved in the inspection, safety clearances, testing and emission regulations in the nations and they are different ministries and organization which are finally under the control of automotive manufacturers.  While in nations like South Korea and Japan the regulatory bodies are separate and have many policies just related to certification and testing of the automobile thus increasing their credibility in the global market for exports.

Corrective measures are expected to be taken up by the government and transport networks are expected to improve thus making the logistical efficiency higher and impact exports positively on a whole for India as a nation.