A Porter's Five Forces Analysis explores five principal industry factors to determine the attractive of a given industry in a given market. In this P5F exercise, we look at the automobile industry in India. This is independent of any manufacturer. As such, it applies to every Indian car manufacturer.

In any P5F analysis, one must examine the following:

1. The threat of new entrants
2. The bargaining power of buyers/customers
3. The threat of substitute products
4. The amount of bargaining power suppliers have
5. The amount of rivalry among competitors

The Indian automobile industry is one of the biggest and most important. It has tremendous growth potential, both for Indian and foreign manufacturers.

In many ways it is like China's auto industry: Over a billion people, a growing economy, increasing wealth, and cheaper and cheaper cars becoming available. Nevertheless, India is still almost a decade behind China in terms of annual auto production, with 2.3 million manufactured in 2008. However, India exports more cars than China does.

Many countries in the world produce cars. Karl Benz, of Germany, is widely credited for having produced the first practical internal combustion, petrol-fueled car. This was in 1885. The United States has Ransom Olds to thank for mass-production of cars on his Oldsmobile assembly line in 1902, although often the credit goes to Henry Ford when he made significant improvements and developments on the assembly line concept in 1914.