IMPACT OF FOREIGN DIRECT INVESTMENT ON INDIA’S AUTOMOBILE SECTOR-WITH REFERENCE TO PASSENGER CAR SEGMENT

Raji Lakshmi Kannan, Prof Dr. T. Ramachandran

Abstract


FDI Inflows to Automobile Industry have been at an increasing rate as India has witnessed a major economic liberalization over the years in terms of various industries. The automobile sector in India is growing by 18 percent per year. The basic advantages provided by India in the automobile sector include, advanced technology, cost-effectiveness, and efficient manpower. Besides, India has a well-developed and competent Auto Ancillary Industry along with automobile testing and R&D centers. The automobile sector in India ranks third in manufacturing three wheelers and second in manufacturing of two wheelers.

. The major investing countries are Mauritius (mainly routed from developed  countries), USA, Japan, UK, Germany, the Netherlands and South Korea. 24. India needs to worry on the foreign direct investment (FDI) front. According to the statistics released by India’s Ministry of Commerce and Industry, the country has received only $18.35 billion in FDI in the first 11 months (April-February) of the financial year 2010-2011, compared to $63 billion that came in the 11 months of the previous financial year. Future prospect of Indian Automotive Sector is looking bright.  Indigenous automobile companies are replacing foreign multinational companies in terms of consumer satisfaction. Since 2002,  automotive sector has much to deliver in the years to come. Direct Investment Inflows in India-Opportunities and Benefits, Important Aspects of FDI in Automobile Industry, Recent FDI Trends in India, The major foreign players who have a significant role in the development of Indian automobile industry, were discussed and the passenger car segment growth, Production, sales and Investment were analyzed.. Here the researcher using three statistical tool for analyzing the study, ARIMA, Linear & Compound Model for analysis purpose to measure future prediction using time series analysis.

Hence this study necessitated the causes and impact of  FDI flows in automobiles sector and also policy regulation, FDI flows in passenger car segment and recent FDI trend in this sector were discussed.


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ISSN : 2251-1563