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Day 43 – Q 5.What are the major hotspots of automobile industry in the world? How is the distribution of these centres changing? Analyse.

5. What are the major hotspots of automobile industry in the world? How is the distribution of these centres changing? Analyse. 

दुनिया में ऑटोमोबाइल उद्योग के प्रमुख आकर्षण के केंद्र क्या हैं? इन केंद्रों का वितरण कैसे बदल रहा है? विश्लेषण करें।


The Automotive Industry is an important segment of the global economy, and its performance often tracks that of the broader business cycle. According to international estimates, the average annual turnover of the world automobile industry is more than $3 trillion, which corresponds to 3.65% of world GDP


The major hotspots of the automobile industry in the world:

  • US – General Motors, Ford

  • Germany- Mercedes, Audi, BMW, Porsche, Opel, Volkswagen
  • Italy- Fiat, Alfa Romeo, Ferrari
  • Great Britain –Aston Martin, Bentley, Jaguar
  • Japan- Toyota, Honda, Suzuki
  • South Korea- Hyundai, Kia Motors, Renault.

  • Canada- Bombardier, Intermeccanica.

Currently, the industry is booming, involving an increasing number of countries in the production of cars. Now the development of the country’s economy is difficult to imagine without the development of the automobile industry.

Factors affecting the changing pattern of Automobiles Hotspots:

    • Raw material: Availability and the prices of key raw materials, such as steel iron, aluminium, plastic and computer chips decide the location of Industry. Now China, India and Japan are the largest sources of steel worldwide.

  • Workforce: The cost of labour has a big impact on competitiveness and profitability. North American and European manufacturers are heavily unionized and this affects the industry’s health. Asian countries in general and India and China, in particular, are providing skilled labour force at cheaper rates.

    • Oil price: The price of gasoline (and diesel fuel) is an important factor influencing the demand. Now the emergence of Electric and hybrid vehicles are shifting the production and usage pattern.
    • Environmental norms: Greening is getting more expensive as Carbon dioxide regulation is likely to continue to tighten, and developed countries like Germany, France, China, the US, and Japan have a higher burden of reducing industrial emissions, so they are shifting the production units to developing countries.
    • Advance technology: Conventional production of Petrol-fueled car becoming a thing of the past. The industry is moving towards cars that will soon be interconnected, electronically controlled and fueled by a range of energy sources. This is leading to the rise of new players such as China and South Korea, as they have an advantage in the electronics sector.

  • Globalization effects: Availability of workforce and raw material across the boundaries at no or low tariff rates has also shifted the manufacturing hotspots. 

    • Demand: Production centres are being established in developing countries due to increased purchasing power and higher demand for cars. Earlier consumption was only in developed countries. 

  • Relaxed Import-export norms: Due to relaxed import-export norms, Assembly units are established in countries after importing parts from OEM countries.

Indian automotive industry: 

  • Indian automotive industry is the fifth-largest in the world and expected to become the fourth largest automobile producer in the world by 2020.
  • Biggest two-wheeler market across the globe.
  • By 2026, India expected to be the third-largest automotive market by volume.
  • 100% Foreign Direct Investment (FDI) is allowed under the automatic route in the auto sector, subject to all the applicable regulations and laws.
  • Geographically, India is close to the major automotive markets of Europe, ASEAN, Japan and Korea. 
  • The cost competitiveness of steel is the main incentive to foreign investors. India is the fourth-largest producer of steel in the world.
  • Presence of four large auto manufacturing hubs across the country: Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik-Aurangabad in the west, Chennai- Bengaluru-Hosur in the south and Jamshedpur-Kolkata in the east


Initiatives like Make in India, Skill India, and Invest India are the steps in the right direction to distinguish India as a top player in global manufacturing, especially the automotive industry. This labour-intensive industry will provide more employment opportunities and could play an important role in the country’s socio-economic development, ultimately turning India into a $5 Trillion Economy by 2022.

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