India is one of the largest automobile industries in the world; it is in fact the second fastest growing automotive market in the world after China. India is now focusing on the production of small cars, where it is building a reputation for designing and manufacturing ultra-low-cost cars. Importantly, international companies such as Hyundai and Nissan have invested in factories in Chennai, India. These two companies are demonstrating how the efficiency of their production and logistics functions can improve their company's competitive position while reducing costs. Cost reduction is the main reason why these two companies invested in India. The same has happened to many other industries in other sectors not just automotive, there are many reasons why India is so attractive to foreign industries, which will be explained later in this text. The automobile industry in India has proved to be a very lucrative market for foreign businesses. This industry has witnessed impressive growth over the past two decades; it has modernized; has come up with latest technologies, as well as aligning with global developments. The automobile industry has contributed significantly to the overall industrial growth in India. It has also generated employment opportunities for many people in India and abroad. There is also brilliant engineering talent, as well as the linguistic strength of English and, of course, the overall low cost. All these resources that India has, make them increasingly attractive not only for all foreign automotive manufacturers, but also for other industries in general such as Microsoft which had four good reasons to invest in India. One such reason is that India has an excellent higher education system which graduates...... middle of paper ...... The Indian automobile market is one of the most competitive markets in the world with extremely low costs , making it an attractive location for foreign automakers. India is now being used as a global automotive hub to produce and sell in India and the global market. Automobile manufacturers considered rivals have chosen Chennai India as the hub for the following reasons; India has an excellent higher education system, competition makes these companies more efficient and innovative, clear policies on foreign direct investment. There are also barriers that limit the potential growth of industries. Such as lack of adequate infrastructure, shortage of roads and ports, congested roads with no available parking and shortage of electricity. Foreign companies need to keep all this in mind when looking to invest in a country that appears to be very attractive.