The liberalization of the Indian automotive industry in 1991 laid the ground for the development of this industry. With the de-licensing of the automotive sector and the subsequent opening up of 100% FDI through the automatic route, the Indian automotive industry attracted interest from both private as well as foreign players. On the one hand, rising purchasing power has been fuelling domestic demand and on the other, market-linked exchange rate and availability of trained technical manpower at competitive cost have made auto manufacturing in India more attractive. The near stagnation of the auto industry in USA, the EU, and Japan has also worked as a push factor for shifting of new capacities and capital into India.

On an average, the Indian automotive industry has grown at a spectacular rate of 17% in the last few years. The industry has attracted an investment of around Rs.500 billion and a further Rs.350 billion worth of investments are in the pipeline. The industry has now attained a turnover of Rs.1,650 billion (US$ 34 billion) and provides direct and indirect employment to 13.1 million people. Exports in the automotive sector have grown at an average CAGR of 30% per year in the last five years.

The growing demand for automobiles and business-friendly policies of the government has helped in attracting several large MNCs such as GM, Ford, Toyota, Honda, Hyundai, etc to the Indian market. Almost all of these players have established greenfield units in India. With the establishment of automobile factories, a large number of Indian as well foreign automotive component companies, such as Bharat Forge, Sona Koya, Schumak Equipment, etc. have also set up ancillary units, with many even exporting their products to faraway countries.

However, the Indian Automotive Industry's contribution globally is very low at 2.37% of world production. Similarly, Indian auto exports constitute only about 0.3% of global trade. Nevertheless, future growth estimates indicate that India will become the world's third largest automobile market by 2030, behind China and the US. This suggests that the industry will continue to grow at a brisk pace for many more years. However, for this growth potential to be realized, the government would have to create a conducive environment and help improve competitiveness of the Indian auto industry. The government is giving tax subsidies with the intention to develop India into a global hub for compact cars. In addition, it has come out with an Automotive Mission Plan 2006-2016.

Managers in the automotive sector would be required to have specialized knowledge of the sector in addition to a good understanding of all functional areas. With several more brands and companies expected to enter India in the near future, managers would have to keep track of competition and develop comprehensive marketing programs including merchandising, branding, and promotion. They would also have to devise strategies to enter new segments of the market.

A Master's in Automotive Business Management would equip students to face the opportunities and challenges in this dynamic sector.