Trends in the Growth of Individual Private Cars Production Till 1980 , rigid restrictions were imposed on the import of passenger cars . Our entire structure of tariffs and quantitative restrictions were aimed at restricting the foreign presence in this sector . Moreover , the role of cars , especially personal cars in the transportation system was negligible . Strong Public transportation system was in existence whose characteristics are safety and accessibility . The main vehicle in this system is the bus which is used collectively . It saves fuel , metal usage , reduces traffic on the roads and pollution . Further , its maintenance expenditure and cost of transportation of individual are less .
The state of affairs is totally reversed since 1981 . In fact , the liberalization trends have entered during this period and aggressively aggravated in the 1990s with the entry of globalisation in the name of New Economic Policy . This resulted in the initiation of policies to encourage imports and to increase foreign collaborations which resulted in the demise of indigenous production as well as indigenous technology . The merger of Government of India owned Maruti Udyog Limited with Suzuki motors resulted in the demise of dominance of Premier Automobiles and Hindustan Motor Limited in the Indian car market . The dominance of foreign companies and foreign collaborations has been established in the automobile sector .
The New Economic Policy resulted in the abolition of licenses and it hastened the process of bringing in foreign companies . By 2002 as many as 16 foreign collaborations are strongly established in India . The car market is filled with large variety of cars . Moreover the imports of necessary new materials , intermediate goods and spare parts increased rapidly . The rise in the imports resulted in the transfer of our wealth to foreign countries in the form of higher licence fee , royalties and high fee for technical expertise . Further , the flow of foreign investment in this sector increased November - 2021 enormously . The rise in the sale of import - intensive cars resulted in the shortage of foreign exchange which is necessary for the real needs of the country . The scarce and valuable foreign exchange earned by NRIs with their hard work as well as with their restricted consumption has been transferred to the producers and consumers of these costly cars in the form of royalties , concessions and incentives . This is really a cruel contradiction .
Possibilities to Raise the Sales of Cars
Since 1980s , the liberalization trends have been increasing in the automobile sector . Despite growing unemployment and poverty , the possession of individual private personal car became a necessity . The second five year plan based on Mahalanobis model , gave high priority to large scale industries which produce productive / capital goods to achieve self-reliant industrial development as early as possible . This plan has failed because it created a serious shortage of mass consumption goods . However the rich did not suffer from inaccessibility but the entire burden transferred to poor and oppressed who are already living in miserable conditions . The failure of second Five Year Plan is the consequence of unequal society . In these conditions , it is identified and decided that imports of necessary essential goods must be accepted . On this pretext , imports of luxury goods which manifest the richness of rich class started to rise significantly . The imports as well as the production of individual personal cars increased as part of it . Moreover , the importliberalisation policy encouraged this trend . Further the domination of foreign collaborations increased in automobile sector which resulted in the demise of indigenous technology . This resulted in the concentration of technological monopoly in the hands of parent companies of foreign collaborators . In fact , India became an assembling centre by importing various parts of the car . Thus , our industrial development is centred around automobile sector with capital-intensive , foreign capitalintensive and imports intensive character . Thus the distorted development has strengthened in our industrial structures .
Causes for the Rise in the Demand for Cars
The demand for cars is very much essential for the survival of automobile industry . For this the government has strongly implemented two strategies :
1 ). It has implemented measures to decrease and restrict Public Transportation system which resulted in the rise of private Transportation system . Consequently , autos and cabs became inevitable for the needs of people ’ s transportation . Further driving autos and cabs became a source of livelihood .
2 ). The survival of automobile sector required the large entry of middle class into the cars market . On the one hand , it became compulsory for this class to purchase personal cars in view of the decline of Public transportation system . On the other , easy credit and personal bank loans were made available to the middle class . At the same time , pay revision enhanced the salaries of Government employees . All these favourable conditions encouraged middle class to purchase personal cars . Moreover , it is significant to note that the size of our middle class is more than or equal to the population of England or population of France . Therefore , the entry of our middle-class into the cars market ensures sufficient demand for cars .
The government is determined to encourage automobile industry . It is one of the six Superstar sectors recognised for Make in India . The sales in the segment of passenger cars is on the rise continuously . The government has been formulating policies with the aim of raising the share of this sector in Gross Domestic Product to the tune of 12 percent . Depending upon the number of cars on the road , demand for oil will rise . They are inseparable . In fact ,
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