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Automobile exports below potential: Survey

The high growth Indian automobile industry would attract massive investments but its export potential still remains untapped.

india Updated: Feb 27, 2006 14:05 IST

New Delhi, Feb 27 (PTI) The high growth Indian automobile industry would attract a massive investment of Rs 80,000 crore by next year, but its export potential still remains untapped despite it gaining global recognition, the Economic Survey said, on Monday.

"While a beginning has been made in the export of vehicles, the potential in this area is far from fully tapped," the Survey tabled by Finance Minister P Chidambaram said in the Parliament.

It made a case for higher foreign shipments even as the automobile exports as a proportion of total production have increased to 8.9 per cent in 2005-06 from 2.9 per cent in 1999-2000.

"During the last two years, export from this sector has grown significantly, owing mainly to the export of cars and two-three-wheelers.

"...For passenger cars and three wheelers, exports in 2005-06 accounted for 18-19 per cent of total production," it said.

The Survey said the auto industry, which maintained a steady annual growth rate of 15 per cent in the last four years, has seen a rise in investment following the liberalisation in the sector in 1991.

"The industry had an estimated investment of nearly Rs 50,000 crore in 2002-03, which is expected to go up to Rs 80,000 crore by the year 2007," the survey said.

The Survey said number of automobile manufacturing facilities in India has grown to 15 for passenger cars and multi-utility vehicles, nine for commercial vehicles, and 14 each for two/three wheelers and tractors.

The turnover of the automobile industry exceeded Rs 92,500 crore in 2003-04, which would cross Rs 1,44,000 crore if the turnover of the auto-component sector was included, it added.

Commenting on the passenger car segment, the survey said its output was expected to cross the million mark in the current year compared to 8,000 in 1950-51.

It said the sector also offered a substantial scope for gainful employment. "The direct employment creation was estimated to be to the tune of 4.5 lakh, and indirect employment at about one crore."

The Survey said number of automobile manufacturing facilities in India has grown to 15 for passenger cars and multi-utility vehicles, nine for commercial vehicles, and 14 each for two/three wheelers and tractors.

The turnover of the automobile industry exceeded Rs 92,500 crore in 2003-04, which would cross Rs 1,44,000 crore if the turnover of the auto-component sector was included, it added.

Commenting on the passenger car segment, the survey said its output was expected to cross the million mark in the current year compared to 8,000 in 1950-51.

It said the sector also offered a substantial scope for gainful employment. "The direct employment creation was estimated to be to the tune of 4.5 lakh, and indirect employment at about one crore."