Automobile Industry in India and World

Proximity to Markets

• Detroit in the USA has a huge automobile industry due to its proximity to the U.S. consumer market.

Supply Chain

• Building a vehicle requires numerous components ( like steel, rubber, plastic, paint, cables etc.). Hence, an efficient supply chain is important in deciding where to locate the automobile industry. E.g., Germany’s automotive industry benefits from a well-developed infrastructure and efficient supply chain networks for building automobiles. 

Skilled Labour and Talent Pool

• Stuttgart (Germany) is home to major automotive companies benefitting from a talented pool of engineers and workers.
• Similarly, the Gurgaon-Manesar Belt (Haryana, India) has attracted automotive manufacturing due to the availability of skilled labour.

Government Policies and Incentives

• The Mexican government’s pro-business policies and trade agreements have attracted automakers to set up plants in Mexico.

Research and Development Centers

• Silicon Valley in the USA and Bengaluru in India have attracted electric and autonomous vehicles due to R&D centres in these regions. 

• Transport: Located on the banks of the Detroit River and linked to Lake Huron, the geographical positioning of the city of Detroit provides a vital connection to the expansive Great Lakes waterway system, facilitating the cost-effective movement of goods and materials.
• Labour: In the 19th century, Detroit saw the emergence of floor mills utilizing running water and the adoption of internal combustion engines for boats. It led to the establishment of numerous repair shops, fostering the development of generations of skilled labour.
• Entrepreneurs: Two iconic figures stand out in the narrative of Detroit’s entrepreneurial spirit: William Durant (founder of GM) and Henry Ford (founder of Ford Motors).
• Raw Material: Detroit’s proximity to Pittsburgh, a major steel-producing centre, ensured a steady steel supply. Additionally, the region has numerous intermediate industries providing components, such as seat cushions, spray paint, tires, and electronic circuits.