INDUSTRY PROFILE OF AUTOMOBILES
HISTORY
The history of the automobile is very rich and dates back to the 15th century
when Leonardo da Vinci was creating designs and models for transport vehicles.
There are many different types of automobiles – steam , electric, and gasoline - as
well as countless styles. Exactly who invented the automobile is a matter of
opinion. If we had to give credit to one inventor, it would probably be Karl Benz
from Germany. Many suggest that he created the first true automobile in
1885/1886.
The early history of the automobile can be divided into a number of eras,
based on the prevalent means of propulsion. Later periods were defined by trends in
exterior styling, size, and utility preferences.In 1769 the first steam-powered
automobile capable of human transportation was built by Nicolas-Joseph Cugnot. In
1808, François Isaac de Rivaz designed the first car powered by an internal
combustion engine fueled by hydrogen.
In 1870 Siegfried Marcus built the first gasoline powered combustion engine,
which he placed on a pushcart, building four progressively more sophisticated
combustion-engine cars over a 10-to-15-year span that influenced later cars. Marcus
created the two-cycle combustion engine. The car's second incarnation in 1880
introduced a four-cycle, gasoline-powered engine, an ingenious carburetor design and
magneto ignition. He created an additional two models further refining his design
with steering, a clutch and a brake.
The four-stroke petrol (gasoline) internal combustion engine that still
constitutes the most prevalent form of modern automotive propulsion was patented
by Nikolaus Otto. The similar four-stroke diesel engine was invented by Rudolf
Diesel. The hydrogen fuel cell, one of the technologies hailed as a replacement for
gasoline as an energy source for cars, was discovered in principle by Christian
Friedrich Schönbein in 1838. The battery electric car owes its beginnings to Ányos
Jedlik, one of the inventors of the electric motor, and Gaston Planté, who invented
the lead–acid battery in 1859.
In 1885, Karl Benz developed a petrol or gasoline powered automobile. This
is also considered to be the first "production" vehicle as Benz made several other
identical copies. The automobile was powered by a single cylinder four-stroke
engine
In 1913, the Ford Model T, created by the Ford Motor Company five years
prior, became the first automobile to be mass-produced on a moving assembly
line. By 1927, Ford had produced over 15,000,000 Model T automobiles.
During the 19th century attempts were made to introduce practical steam
powered vehicles. Innovations such as hand brakes, multi-speed transmissions and
better steering developed. Some commercially successful vehicles provided mass
transit until a backlash against these large vehicles resulted in the passage of
legislation such as the United Kingdom Locomotive Act (1865), which required many
self-propelled vehicles on public roads to be preceded by a man on foot waving a
red flag and blowing a horn. This effectively halted road auto development in the
UK for most of the rest of the 19th century; inventors and engineers shifted their
efforts to improvements in railway locomotives. The law was not repealed until
1896, although the need for the red flag was removed in 1878. Steam-powered road
vehicles, both cars and wagons, reached the peak of their development in the early 1930s
with fast-steaming lightweight boilers and efficient engine designs. Internal combustion
engines also developed greatly during WWI, becoming simpler to operate and more
reliable. The development of the high-speed diesel engine from 1930 began to replace
them for wagons, accelerated in the UK by tax changes making steam wagons
uneconomic overnight. Although a few designers continued to advocate steam power, no
significant developments in production steam cars took place after Doble in 1931.
Electric automobiles
In 1828, Ányos Jedlik, a Hungarian who invented an early type of electric
motor, created a tiny model car powered by his new motor.[14] In 1834, Vermont
blacksmith Thomas Davenport, the inventor of the first American DC electric motor,
installed his motor in a small model car, which he operated on a short circular electrified
track.[15] In 1835, Professor Sibrandus Stratingh of Groningen, the Netherlands and his
assistant Christopher Becker created a small-scale electrical car, powered by non-
rechargeable primary cells.[16] In 1838, Scotsman Robert Davidson built an electric
locomotive that attained a speed of 4 miles per hour (6 km/h). In England, a patent was
granted in 1840 for the use of tracks as conductors of electric current, and similar
American patents were issued to Lilley and Colten in 1847
German Flocken Elektrowagen of 1888, regarded as the first electric car of the world
INTERNATIONAL LEVEL
The turn of the twentieth century witnessed the dawning of the automobile
industry. Tinkering by bicycle, motorcycle, buggy, and machinery entrepreneurs in
Europe and the United States led to the first prototypes of automobiles in the late
nineteenth century. French woodworking machinery makers Rene Panhard and Emile
Levassor built their first car in 1890 with an engine designed in Germany by Gottlieb
Daimler and Wilhelm Maybach. Armand Peugeot, a French bicycle maker, licensed the
same engine and sold his first four lightweight cars in 1891. German machinist Carl Benz
followed the next year with his four-wheeled car and in 1893 Charles and Frank Duryea
built the first gasoline-powered car in the United States. Ransom Olds is credited as the
first mass producer of gasoline-powered automobiles in the United States, making 425
“Curved Dash Olds” in 1901. The first gasoline-powered Japanese car was made in
1907 by Komanosuke Uchiyama, but it was not until 1914 that Mitsubishi mass-
produced cars in Japan.
Each region in the triad—North America, Europe, and Asia—has made significant
contributions to process, product, and organization throughout the twentieth
century. These innovations together have shaped the competitive structure of the
automotive industry that exists today. The organization of production inputs—such
as labor and suppliers of components and materials—as well as the configuration of
distribution channels are also important dimensions of the growth and evolution of
the industry. Furthermore, various forces outside the industry shape industry
structure and strategies: trade flows; regional and international movement of capital;
regional and global policies on trade, environmental regulation, and intellectual
property, particularly in emerging economies; and the infusion of information
technology throughout the procurement, production, and distribution systems.
In the late 1990 Japanese auto manufacturers took over more than a
quarter of the U.S. market, and Big Three market share slipped below 70 percent.
Today, there are only two-and-a-half U.S. automakers—General Motors, Ford, and
DaimlerChrysler—collectively capturing 58.7 percent of the U.S. market. GM still
has the largest share of the U.S. market (27.3%), but Toyota’s market share in the
United States is just one percentage point below Chrysler’s (13%). Worldwide,
market concentration has also been declining since the mid-1980s, with entrants
such as Hyundai/Kia diluting the collective market share held by dominant
automakers.
Maintaining high customer repurchase rates is critical to long-term profitability in
the industry. Therefore, automakers attempt to attract and keep customers from the
purchase of their first car in their late teens until retirement and thereafter.
Product variety at all of the major automakers spans the full spectrum from small to
full-sized cars, although some automakers are better known in particular market niches.
For example, Mercedes, BMW, Lexus, Infiniti, and Acura capture a third of the
upscale market in the United States, whereas Buick, Ford, Mercury, and Toyota are
known for their family-styled traditional cars. Turnkey reliability is the hallmark of
Japanese makes, whereas Ford, Chevrolet, and Toyota appeal to buyers of small or
sporty vehicles. The fastest growing market segment in the United States in recent
years has been sport utility vehicles (SUVs). By the early 2000s, SUVs captured 55
percent of vehicle sales.
INDIAN LEVEL
The first car that plied on Indian roads was as early as 1897 and the first
Indian to own a car in 1901 was Jamshedji Tata. It was in 1942, before India’s
independence that Hindustan Motors manufactured the first automobile in India.
Soon after India’s independence, the Government of India tried to boost the sector
by encouraging manufacturing of automobiles. Before that, the cars were imported
directly.
The automobile sector formally came into being in the year 1952 when the
Government appointed its first tariff commission with the aim of indigenizing this
industry. The year 1952 also marked the introduction of passenger cars in the
country. Manufacturers like Hindustan Motors, Premier Automobiles and Standard
Motors came into the limelight.
Even SUV’s started being manufactured by Mahindra and Mahindra, Bajaj,
Standard Motors, etc. Cumbersome and medium commercial vehicles were made by 7
manufacturers which included Ashok Motors, Simpsons and Co., Premier Motors
and more.
Economic Growth
The evolution of the auto industry contributed much to the economic growth of the
country. It also helped the finance and insurance sectors. In time, vehicle insurance
was set up and governed by the Motor Vehicles Act, 1988. It ushered in mandatory
insurance for vehicles driven on Indian roads.
STATE LEVEL
Ford Motor Company forayed into India in 1995. Ford's decision to build a
base in Chennai was a breakthrough for the automobile industry in Tamil Nadu.
It was initially a 50:50 joint venture with Mahindra & Mahindra until Ford picked
up majority stake in 1998 to be renamed Ford India. It was Ford's first passenger
car facility in India and in addition to making available 36.1 acres of land
belonging to the Chennai Metropolitan Development Area (CMDA) to Ford India
for its plant, the then Chief Minister J Jayalalithaa announced incentives such as
providing infrastructural facilities, sales tax exempt for input, refund of output tax
up to limit of investment, capital subsidy of ₹ 1.5 crore and power tariff discount
during the first three years of operation of the plant. Ford has since expanded their
operations and production capacity through investments and has also recently
announced plans to build a new global engineering and technology centre in
Chennai.
In 2012 the Tamil Nadu government signed a Memorandum of
Understanding with five automobile majors with an investment of at least ₹ 5,700
crore to create 9,530 jobs. The MoUs were signed with Daimler India Commercial
Vehicle Pvt Ltd, Yamaha Motor India Ltd, Ashok Leyland-Nissan Motor
Company Ltd, Eicher Motors Ltd and Philips Carbon Black Ltd. In fact, her
government also unveiled the first-of-its-kind automobile policy in 2014 called
the Tamil Nadu Automobile and Auto Components Policy 2014. The policy aims
at making Chennai one of the top five centres in the world in the automobile and
components space. India's total export of automobiles during 2007-09 was
₹8861.33 crore, Chennai exported over 53 per cent of those ( ₹ 4,733 crore). Tamil
Nadu accounts for 35 per cent of India's auto component production and three
Chennai based industrial groups make up more than 22 per cent of India's auto
components production.
While Tamil Nadu has become a manufacturing and export hub, it's obvious that
more carmakers want to be based out of this state. The Government of Tamil
Nadu has offered 390 acres of land to KIA Motors to set up a factory in India. KIA
Motors, a subsidiary of Hyundai Motors, has been scouting for locations for a
factory to make its entry into India and are looking to produce over 3 lakh units per
annum. But it doesn't stop there the Jayalalithaa government also helped in adding
critical infrastructure - a world-class ₹ 450 crore Global Automotive Research
Centre unit run by the National Automotive Testing R&D Centre (NATRiP). It
gives vehicle manufacturers a range of facilities including to design testing, safety
emissions and performance standards.
