Automobile industry in India flourished properly after independence. Before the independence of the country, automobiles were not manufactured in India. They were just assembled from the imported parts. In the year, 1949, manufacture of some parts of passenger cars was undertaken by the Hindustan Motors in Kolkata. It was from the same year that India started manufacturing passenger cars using some indigenously made parts. Since that time, India has made considerable growth in the sector of automobile industry. Tremendous progress has been made in the manufacture of passenger cars, motor cycle, scooters and much more.

Automobile industry basically prefers its location near steel and iron producing centres as steel is basic to the manufacture of automobiles. Another factor that is taken into consideration before the set-up of automobile industry is the availability of ready market factor. Initially, the factories that started production of vehicles based on imported parts were situated at port towns like Mumbai, Kolkata and Chennai. At these towns, in addition to the facilities of importing automobile parts, skilled as well as semi-skilled labour, power, banking facilities, limited automobile subsidiary industry, market and machinery existed. However, the factories situated near steel producing centres have advantages of effortless access to steel and iron.

Jamshedpur, Jabalpur, Mumbai, Chennai, Ahmedabad, Lucknow are some of the major automobile industry centres in India. Cars, scooters, military vehicles, trucks, buses, jeeps, etc. are manufactured in the country. Government of India has been liberal in allowing the Indian entrepreneurs to manufacture technologically superior and fuel efficient vehicles and two wheelers in collaboration with the foreign manufacturers. The major percentage of the total components of the vehicles is now manufactured in the indigenous automobile industries of India. Only some of the specialized parts are imported. Indian made vehicles get ready market in other countries.

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