Why is the automotive industry booming business in 2021?

The automotive industry incorporates a wide range of companies and organisations engaged in the designing, development, manufacturing, marketing and selling of motor vehicles. It is one of the most numerous revenue-generating industry. It excludes the maintenance of automobiles. Owing to globalisation, digitalisation and increasing competition, this industry is accelerating at a fast pace. Various new features and modifications coming up are giving an upthrust to this industry. Cut-throat competition with each other is leading to unexpected and exorbitant transition. Successful technology always moves ahead with more innovations and development. It is a developing industry about understated reasons:

1. Digital Retailing: One of the remarkable achievements in the automotive industry in 2021 is digital retailing. It has made the car buying process very simple and convenient. Every related information is just a click away. The online market places and visiting the showroom virtually has given an excellent arena for this industry to flourish in all aspects. The use of various social media platforms also enriched the process.

2. Overall development: This industry contributes to the creation of many job opportunities. It improves the quality of life by providing easy mobility, comfort and safety. Employees tend to develop soft skills in this industry to ground technical development, and managerial skills are laid forward.

3. Open the economy to outside investors: For the expansion of industrial growth, the outside market needs to be tapped. Foreign investors are invited to set up export-based plants to reduce import duties.

4. Scope for affordability and value: Domestic growth could be achieved when vehicles are more affordable and easily accessible to people. Many countries keeping in mind the prospect of progress, has released low-cost, compact cars for the people. This effort has heralded inner sale as well as export, thus earning foreign currency as revenue.

5. Improve the infrastructure: Sufficient infrastructure is required to support this industry. This has, in turn, led to the construction of good roads and highways, both interstate and intrastate.

6. Encourages innovation: As the industry grows and prospers, the demand for more product variety and additional features arises, which forces the industry to adopt innovative techniques.

7. Generating revenue: The automotive industry contributes a significant revenue from the sale of vehicles, income taxes, sales taxes etc. Automakers also gain benefit from export and foreign exchange earnings. This is crucial to a country's current account performance and trade balance with other economies. Automotive industries contribute to around 3 per cent of the total GDP.

8. Industrial development: The automotive industry has given a spark and has revolutionised the mobility concept. The movement of goods and people are now easier than ever to move across geographic regions. Better transport has led to counter-urbanization—the migration of people, businesses, and industry from cities to newly developed suburban areas. This trend is spreading to emerging economies.

9. Human capital: Attractive job opportunities will draw talented people. Creating a more comprehensive talent base through effective technology and training can build good human capital.

10. Target sustainability: As the auto industry is proliferating, the government pushes it into the future, mainly through sustainability.  Various road and vehicle policies are coming up to global standards. Incentives and infrastructure investments are helping automakers gear up for next-generation transportation such as hybrid, electric, and alternative fuel vehicles.

Conclusion: Considering all the avenues and opportunities, the automobile industry is reaching its height where the sky is the limit. Opening various opportunities, this industry ranks at the top in all aspects of economic growth and sustainability. The rapid turnover has motivated it to adopt the latest technology, which gives convenience to the masses.