The automotive sector includes wide range of companies and organizations involved in the manufacturing and selling of vehicles. The automotive industry evolved in 18th century with hundreds of manufacturers who wanted to change the way people used to commute. The automobile industry is one of the major contributors of economic growth of the nation and employment. The automobiles sector is majorly divided into four segments- Two wheelers, Passenger vehicles, Commercial vehicles and three wheelers. The automotive sector has witnessed a robust growth rate of 26 % in the last two years.Internationally the Indian automobile sector has the following market share as per the confederation of Indian industry is:Largest three wheeler marketSecond largest two wheeler marketTenth largest two wheeler marketTenth largest passenger car marketFourth largest tractor marketThe Indian auto industry is one of the largest in the world. This sector shares 7.11 % of the country’s gross domestic product. The two wheeler segment is the leader of the Indian automobile market with 80% market share. The growing interest of the companies in exploring their rural market has further aided the growth of the sector. Overall passenger vehicle segment has 14% of market share. In Mar-April 2017, exports of passenger vehicle and commercial vehicle saw a phenomenonal growth of 16.20 percent as compared to 4.99% in March-April 2016. Market Size The production of passenger vehicle, commercial vehicles, and three wheelers grew at 5.41% in FY17 to 2, 53, 16, 044 vehicles from 2, 40, 16, 599 vehicles in FY16. The sales of passenger vehicles and commercial vehicles saw a growth of 9.23% and 4.16% respectively. Factors determining the growth of the industry:Fuel economy and demand for greater fuel efficiency accounts for a major factor that affects consumer purchase decision.Increased affordability and increased demand of small car segment. Availability of inexpensive skilled workers.Market segment and product innovation.Hybrid cars are predicted to be on the streets by 2020 and more than half the cars on the street shall be powered by diesel by 2020. The Indian automobile industry has a prominent future in Indi and abroad. Considering the future projections, The Government of India encourages foreign investment in the automobile sector and allows 100% Foreign Direct Investment. Some of the major initiatives taken by the Government of India areGovernment of India has extended its support to the Indian industry by increasing custom duty on CBUs of commercial vehicles from 10% to 40%Government of India aims to make automobiles manufacturing the main driver of ‘Make in India’ initiative, as passenger vehicles market is expected to triple ( 9.4 million units) by 2026 as perAuto Mission Plan (AMP) .The Indian automotive sector is estimated to witness a rise of 10-15 % to reach US$ 16.4 billion by 2021 from around US$ 7 billion in 2016 with a potential to generate up to US$ 300 billion in annual revenue by 2026. This will create 65 million additional jobs and contribute more than 12% to India’s Gross Domestic Product.