The automobile sector of India plays an essential role in the country’s economy. Recently, the Union Minister of Commerce and Industry brought up the matter at the 62nd Automotive Component Manufacturers Association (ACMA) Annual Session. ACMA, an apex body for the Indian Auto Component Industry, boasts over 850 manufacturers who contribute to more than 85% of the auto component industry’s organized sector turnover.
The theme of the session was ‘Future of Mobility – Transforming to be Ahead of Opportunity.’ The minister unfolded a 5-point action plan for the Automobile Industry, which includes focusing on quality, thinking holistically, emphasizing value addition, exiting uncompetitive markets, and exploring new opportunities.
Growth and Status of the Indian Automobile Industry
India’s automobile industry, including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and Quadricycles, holds a significant stature globally. In 2021, India’s Automotive Market was valued at USD 100 billion, with projections reaching up to USD 160 billion by 2027. Currently, India ranks as the 4th largest producer of automobiles, the largest tractor manufacturer, the second-largest bus manufacturer, and the third largest heavy trucks manufacturer worldwide. The Electric Vehicle (EV) market in India is anticipated to reach Rs. 50,000 crore (USD 7.09 billion) by 2025, contributing 7.1% to the GDP and accounting for 4.7% of India’s exports.
Government Initiatives and Policies for the Automobile Sector
To boost the domestic manufacturing of advanced automotive technology products and attract investments, the Union Cabinet announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. In addition, under the automatic route, the government permits 100% Foreign Direct Investment (FDI), making it easier for investors to set up manufacturing units in India.
Looking forward, the government has outlined the trajectory of the automotive industry growth through the Automotive Mission Plan 2016-26 (AMP 2026). Additionally, under the National Electric Mobility Mission Plan 2020 (NEMMP), the government aims to promote affordable and efficient hybrid and electric vehicles.
Challenges Facing the Indian Automobile Industry
Despite the promising trends, the automobile industry grapples with several challenges. The rise of shared cars due to apps like OLA and Uber has to some extent challenged the concept of ownership, affecting sales. Banks and other financial institutions have also grown cautious about providing credit for car purchases, making customers hesitant about buying a new vehicle.
Moreover, the government’s ambitious transition plan towards EVs has caused anxieties about job cuts and market disruption, especially since the mandate came when the sector was already dealing with a slump in sales. Finally, an increase in freight-carrying capacity of newer model trucks has curtailed demand for commercial vehicles.
Magnetite Particles in Automobiles
The UPSC Civil Services Examination posed a question regarding the production of magnetite particles from motor vehicles. It’s now understood that these magnetic nanoparticles can be manipulated and they often consist of two components – a magnetic material (iron, nickel, cobalt) and a chemical component.
In the context of the automobile industry, ceramic or ferrite magnets are employed to enhance safety measures. This means cars do release magnetic particles; further corroborated by the fact that engines that utilize high-powered magnets produce a strong magnetic flux, resulting in magnetic particle generation. Consequently, brake systems are considered potential producers of neurodegenerative-problem causing magnetite particles.
