ORIGINAL HISTORYHistory can be divided into four phases: 1898 to 1957The first automobile on the streets of India was seen in 1898. In 1903, an American company started a service of public taxi with a fleet of 50 cars in Mumbai. For about 50 years after the first automobile arrived in India, cars were directly imported until foreign manufacturers began to realize the vast potential India had with its vast distances and large population. Before the First World War, approximately 4,000 motor vehicles were imported. During the wars, an automobile industry was started with the establishment of assembly plants in Mumbai, Calcutta and Chennai. The importation and assembly of motor vehicles increased markedly after the 1920s, exceeding 30,000 units in 1930. It was towards the end of the war that the importance of establishing an indigenous automobile industry in India was realized when Premier Automobiles Ltd. (PAL) and Hindustan Motors (HM) set up factories in the mid-1940s for progressive manufacturing rather than assembling imported components. At the time of independence, PAL and HM concentrated on passenger cars, while the Mahindra brothers founded Mahindra & Mahindra in 1945 with the aim of manufacturing commercial vehicles. After independence, the automobile industry was termed to be of immense importance in India, therefore measures were taken for its control and regulation by the government. Starters were prohibited from importing fully built units, if not outright banned. In 1952 the government appointed the first Tariff Commission. As per the suggestion of the Tariff Commission, the government put an end to the activities of assemblers who had no production schedule. It was also decided to keep the number of models selected for production at a realistic minimum level... middle of paper... world proof. The next two years were a boom and brought unprecedented growth in the industry, forcing assembly lines to work overtime to meet demand. Dazzled by the potential of India's roughly 100 million people, automakers planned ambitious capacities. However, India was a much more difficult market due to strong competition from the Indian company Maruti on price and value for money. This has forced most new entrants into the mid-sized luxury segment. With cars costing five to eight lakhs, only a few people can afford them. Daewoo, Hyundai, Mitsubishi, Ford, Peugeot, GM Opel, Mercedes Benz, Honda are all burdened with excess capacity. Manufacturers are rethinking their strategies and streamlining capabilities to cope with the situation. Many are still optimistic about the mid-sized segment and expect it to have the greatest growth potential.