The auto ancillary or auto components industry is a critical part of the automotive industry, which deals with the manufacturing and selling of intermediate parts, equipment, and chemicals. It is one of the fastest growing industries, primarily due to the success of the Indian automobile sector. The Indian auto ancillary market has developed its capabilities of manufacturing all the components required to manufacture a vehicle.
The auto ancillary market in India can be classified into the organized and unorganized sectors. The organized sector consists of original equipment manufacturers and high-value precision instruments, and the unorganized sector consists of low-value products and serves the aftermarket.
The auto ancillary market scope suggests that the auto ancillary market is driven by the young population base in India with a high purchasing power, which has led to an increase in first-time vehicle purchases. The organized sector is expected to see higher growth than its counterpart because of the government’s mission to make India an export hub for automobiles.
The government launched the Make in India campaign to make India a self-sufficient manufacturing hub. It posed both opportunities and challenges for the automobile industry. Reports suggest that the automobile and auto ancillary market will lead the Make in India story as it will account for 30% of the entire manufacturing sector in India. The government has made a number of allowances and policies available for the automobile sector. In the auto ancillary sector, 100% foreign equity is allowed through the automatic route. The government provides a number of incentives such as subsidized land costs, power tariff incentives, low rates of interest on loans and special incentive packages for mega projects.
Favorable government policies such as Automotive Mission Plan 2006-2016, Auto Policy plan 2002 and National Automotive Testing and R&D Infrastructure Projects (NATRiPs) as well as concessions provided on excise duties in the Union Budget 2015-16, will help the auto ancillary market in India achieve considerable growth.
The auto ancillary market in India can be classified into the organized and unorganized sectors. The organized sector consists of original equipment manufacturers and high-value precision instruments, and the unorganized sector consists of low-value products and serves the aftermarket.
The auto ancillary market scope suggests that the auto ancillary market is driven by the young population base in India with a high purchasing power, which has led to an increase in first-time vehicle purchases. The organized sector is expected to see higher growth than its counterpart because of the government’s mission to make India an export hub for automobiles.
The government launched the Make in India campaign to make India a self-sufficient manufacturing hub. It posed both opportunities and challenges for the automobile industry. Reports suggest that the automobile and auto ancillary market will lead the Make in India story as it will account for 30% of the entire manufacturing sector in India. The government has made a number of allowances and policies available for the automobile sector. In the auto ancillary sector, 100% foreign equity is allowed through the automatic route. The government provides a number of incentives such as subsidized land costs, power tariff incentives, low rates of interest on loans and special incentive packages for mega projects.
Favorable government policies such as Automotive Mission Plan 2006-2016, Auto Policy plan 2002 and National Automotive Testing and R&D Infrastructure Projects (NATRiPs) as well as concessions provided on excise duties in the Union Budget 2015-16, will help the auto ancillary market in India achieve considerable growth.
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