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Industrial Relations

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Growing middle class :-
Currently there are are about 160 mn people who fall under the category of middle class up from 120 mn 2006-07 close to 33% growth. Which has been key factor in the growth of this lucrative industry.As per the study, which uses 'household income' as the criterion, a family with an annual income between Rs 3.4 lakh to Rs 17 lakh (at 2009-10 price levels) falls in the middle class category.
Infrastructure :-
In 10th 5 year plan budget ( 2003-07) for infra development was $300 million which was raised by 65% in 11th 5 year plan to $495 millions . This is a clear picture that shows govt has been very aggressive in investing in infrastructure which has somehow improved roads , highways , more connectivity across different parts of country in better way .
Rivalry among players :-
There are so many players in current Indian market that automobile industry Is considered as oligopoly market in which all players face stiff competition from the competitiors nd has given better options to consumers to choose from.
Skilled workforce :-
India is one of the prime destinations for Usa , Japan , and many European countries for outsourcing there components here and by planting assembly units here they have grown like anything. Us firms like ford and gm earn close to 30% profits by this and german manufacturers like bmw , merc , audi they earn almost 50% . They get cheap and one of the best labour here .
Barriers to entry :-
After Indian economy entered globalization in 1991 which removed many barriers for foreign players automobile industry saw entrance of foreign players and also custom and excise duty have been reduced by close to 50% like back in 2000 it was close to 200% which is now come down to 100% though still is high but better nd is expected to come

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