With the launch of Tata Nano, Indian Automobile industry has found a new place in the world’s automobile industry. The automobile sector is surely rising and it seems that the next ten years will be a crucial period for growth of the Indian automobile industry as a significant player on the global stage. India is one of the fastest growing passenger car market and the second largest two wheeler manufacturer. The growth of Indian middle class with increasing purchasing power, along with strong economic growth over e past few years has attracted major auto manufacturers the Indian market.  Availability of trained manpower at reasonable cost is another reason for the remarkable growth and has pushed it to new capacities.

The increasing competition in auto companies has opened up many choices for Indian consumers at competitive costs. The Indian Automobile industry is growing in all respects and it is also serving as an important source of employment. Indian Auto Industry is a long term growth story backed by the expected rising demand of passenger vehicles fuelled by the increase in spending capacity, affordable interest rates and government's thrust on infrastructure.

PASSENGER VEHICLES
There is more and more demand for passenger cars these days. The factors behind it are
1. Increasing affordability on account of reduction in entry level prices.
2. Low penetration.
3. Increase in disposable income.

With the launch of cars like Nano, this sector would mainly be driven by the small cars. The government and industry majors are also laying emphasis on making India small car manufacturing hub. At present, competition in the small car segment is low with only five players in the dominant compact segment. However, going ahead, by 2011, competition in this segment is expected to heat up.

Maruti Udyog has been the leader in the Indian car market for about two decades. The company has consistently grown over the last six years on rising volumes and improving margins.  Tata Motors is India’s largest passenger automobile and commercial vehicle manufacturing company. It is also the world’s 5th largest commercial vehicle manufacturer.

Though the Indian Automobile industry is growing but contribution in global terms is very low. This is evident from the fact that production of passenger and commercial vehicles in India constitutes just 2.37% of the world’s total production. Indian automotive exports are also comparatively low. With Asia and particularly China and India emerging as the preferred manufacturing hubs for multi-national companies, by virtue of availability of cheap and skilled manpower, auto manufacturing is expected to shift to the Asian region. Passenger car market in India remains very attractive on the back of robust economic growth, rising disposable incomes and abundance of finance at reasonable rates of interest. Though it remains sensitive to hardening interest rates, demand in India is very strong and is expected to remain so on the back of favorable demographics in the form of a burgeoning middle class and growing number of millionaires.