Indian Automobile Industry Size & Share Analysis - Growth Trends & Forecasts (2024–2029)

 Analysis of India’s Automotive Market reveals a valuation of USD 100 billion in 2021, poised to escalate to USD 160 billion by 2027, marking an anticipated Compound Annual Growth Rate (CAGR) of 8.1% over the forecast period (2022–2027).

India stands out as a prominent global Automotive manufacturing hub, leveraging low-cost production strategies driven by factors like economical labor, easily accessible and affordable raw materials, and a depreciated currency. As the world’s fourth-largest automobile producer, the country consistently manufactures over 4 million vehicles annually.

The pandemic initially disrupted vehicle production and worldwide lockdowns impacted the automotive industry. Nevertheless, as the situation normalizes, there’s a resurgence in vehicle production. For example, in 2019, 4.5 million vehicles were sold, dipping by approximately 3% in 2020. However, in 2021, production surged by about 30% compared to the previous year, signaling an anticipated increase in vehicle production during the forecast period due to heightened demand and robust production.

Driven by a burgeoning middle-class income and a rising young population, the Indian Automobile market foresees robust expansion, evident in the substantial surge in exports. Notably, from April to December 2021, Indian automobile exports reached 424,037 units, a significant rise from 291,170 units in the same period of 2020.

Leading players in the passenger car segment include Maruti Suzuki, Tata Motors, Hyundai Motor Company, Mahindra and Mahindra, Kia Motor Company, among others. In the two-wheeler segment, prominent names include Hero Moto Corp., Honda, TVS, Bajaj, and Royal Enfield.

India Automobile Market Trends

Key market trends steering the India Automobile Market:

Driving Investments and Government Initiatives

The automotive sector contributes 7.1% to India’s GDP and 49% to manufacturing GDP, being a significant driver of economic growth and technological advancement. Recognizing its crucial role, the government is actively introducing norms and schemes to bolster the industry’s share.

By 2023, the government anticipates the vehicle sector receiving USD 8–10 billion in domestic and foreign investment. Initiatives like Make in India, launched in 2014, aim to transform India into a global design and manufacturing hub, prompting considerable investments in new and existing manufacturing plants. For instance, Maruti Suzuki India pledged INR 18,000 crore (USD 2.42 billion) for a new production facility in Haryana with an annual capacity of 7.5–10 lakh vehicles.

Moreover, the introduction of a vehicle scrappage policy in 2021 aims to phase out unfit automobiles, curbing greenhouse gas emissions and fostering safer, BS6-compliant vehicles. Tax incentives for scrapping old vehicles encourage recycling while promoting the adoption of safer, more environmentally compliant vehicles, augmenting India’s automotive market.

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