4 Wheeler Industry Analysis

History of Automobile sector- four wheelers in India

The concept of four wheelers was coined way back in 1895, though it is not certain that automobiles started developing from this period only. The development of 4 wheeler industry has changed as the life style of people changed over the years. It has direct relation with the enhancement of people’s lifestyle. The history of modern four wheelers can be traced back to 1940s. But effectively, the growth phase started after 1970s. Premier Automobile Limited and Hindustan Motors (HM) set up factories in mid 1940s. HM started manufacturing cars in 1949. PAL and HM focused mainly on passenger cars. In 1945, Mahindra brothers founded Mahindra and Mahindra with the objective of making utility vehicles,

The rise in disposable income of people raised the purchasing power of people and so the growth of industry. The above figure shows that due to increase in income, the number of cars has increased from 1.95 million in 2009 to 3.07 million in 2013 where as the GDP has grown by 39.51% from 2009 to 2013. The number of cars has increased by 57.43%. So relatively the 4 wheeler industry has grown with higher rate than GDP of the country.

Indian four wheeler Industry has shown conceptual changes in type of fuelling technique used over the years. The cars are mainly made up of petrol and diesel run engines and in recent decade the green vehicles has emerged which uses natural gases as fuel.

Green Vehicles In 1998, India entered into Green vehicles, which was a step different from the global industry. Supreme Court played crucial role in introducing natural gas run vehicles. It started with introduction of CNG buses and three wheelers in Delhi. All the city buses, taxies and auto rickshaws switched from petrol, diesel run engines to compressed natural gas fuel engines. The cost benefits and environmental awareness created a demand in market for such vehicles. Indian auto industry is evaluating two paths in its move towards green

As we can see in the table above, there was a sudden surge in the production of cars after liberalization.

Classification of Cars in India

Society of Indian Automobile Manufactures (SIAM) is the top most body in India for classification of automobiles.

There are many categories in which cars are classified in Indian Market. Length of car, engine capacity, features offered, seating capacity are some of the parameters in which cars can be classified . According to SIAM the 2 most prominent categories to classify the cars are –

• Car Segments

• Car Body Type

Car Segments 

The length of car is the basic parameter for classification based on car segment. The length of car also contributes the price variations. Different car segments are as follow:

Car Segment Length of Car Example

A1 Up to 3400 mm Nano

A2 3401 to 4000 mm Alto, i10,zen,WagonR

A3 4001 to 4500 mm Manza, Logan ,Dzire,City

A4 4501 to 4700 mm Corolla, Octavia, Optra

A5 4701 to 5000 mm Accord, Camry ,Sonata

A6 More than 5000 mm Mercedes S Class

Car Body Type 

The length of the car can’t be the only criteria on which price of car is decided. Cars can be further classified on the basis of their body