Indian Passenger Vehicle Industry: Strategic Analysis with Focus on the Big Four Firms



Overview of the Indian Automobile Industry

The Indian market, before independence, was seen as a market for imported vehicles while assembling of cars manufactured by General Motors and other brands was the order of the day. The Indian automobile industry mainly focused on servicing, dealership, financing and maintenance of vehicles. After a decade from independence, manufacturing started. Till the 1950s, it was primarily the Indian Railways that met the country’s transportation requirements.

Since independence, the Indian automobile industry has faced several challenges. The main focus of the government was development through heavy, long gestation and capital intensive projects like steel manufacturing. Priority was given to the quality of finished goods and customer feedback. Setting up manufacturing capacities required license from the government.The industry grew in spite of these challenges.

For nearly three decades since independence, the total annual production of passenger cars was limited to 40,000 units. The production was confined to three main manufacturers – Hindustan Motors, Premier Automobiles and Standard Motors. The industry saw no research & development or specialization. Initially, labour was unskilled and had to go through a process of learning through trial and error.

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