Evolution of vehicle industries in the region

Md Saidur Rahman in the second of his three-part article An embryonic automotive industry emerged in India in the 1940s. Mahindra & Mahindra was established by two brothers as a trading company in 1945, and began assembly of Jeep CJ-3A utility vehicles. The company soon branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. Following India's independence in 1947, the Government of India and the private sector launched efforts to create an automotive component manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in the 1950s and 1960s due to nationalisation and the licence formalities, which hampered the Indian private sector. After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors, commercial vehicles and scooters. Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies. In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles and light commercial-vehicles. It was at this time that the Indian government chose Suzuki for its joint-venture to manufacture small cars. Following the economic liberalisation in 1991 and the gradual weakening of the licence regulation, a number of Indian and multi-national car manufacturing companies launched operations. Since then, automotive component and automobile manufacturing growth has accelerated to meet domestic and export demands. Following economic liberalisation in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which has attracted significant India-specific investment by multinational automobile manufacturers. In February 2009, monthly sales of passenger cars in India exceeded 100,000 units and have since grown rapidly to a record monthly high of 182,992 units in October 2009. Now, The Indian Automobile Industry is manufacturing over eleven million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75 per cent and passenger cars with a market share of about 16 per cent. Commercial vehicles and three wheelers share about 9.0 per cent of the market between them. About 91 per cent of the vehicles sold are used by households and only about 9.0 per cent for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people. In China, Zhang Xueliang founded his arsenal to make one truck called Ming Sheng in 1931. Another general, Yang Hucheng, patronised the inventor Tang Zhongming to make a new type of mobile energised by charcoal. In 1956, the first modern automobile factory First Automobile Works began production. In1958, the first 2.5 ton light duty truck (NJ130), which was based on Russian GAZ-51, was produced in Nanjing. The truck was named Yuejin (meaning "leap forward") by China's First Ministry of Industrial Machinery. In 1958 Nanjing Automobile Works, previously a vehicle servicing unit of the Army was established. The truck production continued until the last truck (NJ134) rolled off the assembly line on July 9, 1987. During late 1950s to 1960s, several automobile factories were set up in Nanjing (now known as Nanjing Automobile (Group) Corporation), Shanghai (Shanghai Automotive Industry Corporation), Jinan (evolving into China National Heavy Duty Truck Group), and Beijing (now known as Beijing Automotive Industry Holding Corporation). In 1968, the Second Automobile Works (later Dongfeng Motor Corporation) was founded. The country spent some $3.0 billion to import more than 350,000 vehicles (including 106,000 cars and 111,000 trucks) in 1985 alone. Three taxi companies in particular thirsted for Japanese cars, such as Toyota Crowns and Nissan Bluebirds. China's answer to the import binge was to sign a series of joint-venture passenger car production agreements. In 1983, American Motors Corporation (AMC, later acquired by Chrysler Corporation) signed a 20-year contract to produce their Jeep-model vehicles in Beijing. The following year, Germany's Volkswagen signed a 25-year contract to make passenger cars in Shanghai, and France's Peugeot agreed to another passenger car project to make vehicles in the prosperous southern city of Guangzhou. After 1990, several enterprises entered the automobile industry. Some of them are originated from defence industry, such as Chang'an Motors, Changhe, and Hafei Motor; some were developed from old state-owned companies, such as BYD Auto, Brilliance China Auto, Chery Automobile, and Changfeng Automobile. Others are private-owned companies, such as Geely Automobile, Great Wall Motors. Economic trends of Bangladesh: Though both the volumes of exports and imports of Bangladesh are increasing, the growth rate of import has always exceeded that of export. Exports have grown at an amazing rate of 42 per cent in fiscal 2011, making Bangladesh amongst the highest export growth achievers in the world. Other indicators of an expanding economy are the growth in imports and credit growth to the private sector (29 per cent). On the social side, the latest Household Income and Expenditure Survey (HIES 2010) shows that national poverty has declined by around 9.0 percentage points between 2005 and 2010. As a result, the overall poverty rate declined from 40 per cent in 2005 to 31.5 per cent in 2010... While both exports and imports are expanding, indicating a buoyant economy, the trade gap is widening because of the much larger import base. If we look at trade deficit between Bangladesh and India, we see an upsetting economic imbalance between the two countries. The trade deficit between India and Bangladesh more than doubled in just five years. The gap, which was $1,998.58 million in fiscal 2006-07, reached $4,057 million in 2010-11, according to Bangladesh Bank and Export Promotion Bureau data. The writer is a researcher and can be reached at email: msaidurbd@yahoo.com