Senior management officials of leading international automobile companies like General Motors and Honda Thursday met Prime Minister Narendra Modi here.
According to the Prime Ministers' Office (PMO), Chairman of General Motors Tim Solso and Chairman of Honda Motor Company Fumihiko Ike called on the prime minister separately.
The interest shown by international manufacturers can be gauged from the fact that the Indian automobile market is expected to become the world's third largest by 2020, according to estimates by J.D. Power and Ernst & Young.
According to these estimates, quoted in the National Electric Mobility Mission Plan 2020, India's share of the global passenger vehicle market will jump from four percent in 2010-11 to eight in 2020.
In 2010, India became the sixth largest automobile manufacturer, with two-wheelers and three-wheelers crossing more than 10 million units every year. Therefore, the demand for auto parts is huge.
Even several auto manufacturers are moving operations to India with an eye for promoting their exports out of India.
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According to a report by Standard Chartered Bank, Hyundai plans to source engines for its global operations from India, Ford plans to make India its manufacturing hub for engines for the Asia-Pacific region and Africa, and Volkswagen plans to increase sourcing from India to 70 percent of total global sourcing.
Toyota and Suzuki are also increasingly using India as a sourcing hub for global requirements.
By 2020, India is likely to overtake Thailand in global auto-export market share, the report estimates. Currently, auto exports from Thailand at $24 billion are double that of India's $12 billion.
India is the world's third largest exporter of two-wheelers after China and Japan and analysts expect Indian companies to gain market share in Africa and Latin America.
Seeing this and an opportunity to grow employment opportunities the Modi government is push on building up the manufacturing sector in auto industry.