Analysis of Automobile Industry In India - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The report India Automotive Market is segmented By Vehicle Types (Two-Wheelers, Passenger Cars, Commercial Vehicles, and Three-Wheelers), By Fuel Type (Diesel, Petrol/Gasoline, Electric, CNG/LPG, and Others), and By Region (North India, East India, West India, and South India). The report covers the market size and forecast for the India Automotive market in value (USD billion) for all the above segments.

India Automobile Industry Overview

Analysis of Automobile Industry In India
Study Period: 2018 - 2028
CAGR: 8.1 %

Major Players

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*Disclaimer: Major Players sorted in no particular order

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India Automobile Market Analysis

India's Automotive Market was valued at USD 100 billion in 2021 and is expected to reach USD 160 billion in 2027, registering a CAGR of 8.1% over the forecast period (2022-2027).

India is a well-recognized Automobile manufacturing hub worldwide because of its low-cost production. Cheap labor, easy availability and low cost of raw materials, and a weak currency are the factors driving the manufacturing Industry. India is the 4th largest producer of Automobiles in the world, with an average annual production of more than 4 million motor vehicles.

Although vehicle production was hampered due to the global pandemic and worldwide lockdown, now, as the situation is easing, the number of vehicles produced is expected to increase in the upcoming years. For instance,

In 2019 a total of 4.5 million vehicles were sold in the country, and in 2020 the number dropped by about 3 %. However, in 2021, the number of vehicles produced rose by about 30% compared to 2020. Hence, considering the rising demand and the production in full swing, the number of vehicles produced is expected to increase during the forecast period.

Due to the rise in the middle-class income and rising young population, the India Automobile market is expected to witness strong growth. Additionally, due to the rising demand for automobiles, export from the country has also seen a significant increase. For instance,

From April to December 2021, Indian automobile exports were 424,037 units, up from 291,170 units from April to December 2020.

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

India Automobile Industry Segments

The India Automotive Market is segmented By Vehicle Types (Two-Wheelers, Passenger Vehicles, Commercial Vehicles, and Three Wheelers), By Fuel Type (Diesel, Petrol/Gasoline, Electric, CNG/LPG, and Others), and By Region (North India, East India, West India, and South India). The report covers the market size and forecast for the India Automotive market in value (USD billion) for all the above segments.

By Vehicle Type
Two-Wheelers
Passenger Cars
Commercial Vehicles
Three-wheelers
By Fuel Type
Diesel
Petrol/Gasoline
CNG and LPG
Electric
Others
By Region
North India
South India
East India
West India

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India Automobile Market Trends

This section covers the major market trends shaping the India Automobile Market according to our research experts:

Rising Investments and Government Initiatives are Expected To Drive the Market

The automobile sector accounts for 7.1% of India's GDP and 49 % of manufacturing GDP. Hence, the automobile sector in India is a significant driver of macroeconomic growth and technological advancement. So, the government is focused on increasing the share of the automobile industry by introducing various norms and schemes.

By 2023, the Indian government expects the vehicle sector to receive USD 8-10 billion in domestic and foreign investment.

For instance, the Prime Minister introduced the Make in India program in 2014 as part of a broader set of nation-building efforts. Make in India was designed as a timely solution to a crisis to transform India into a global design and manufacturing hub.

As a result, many manufacturers are investing in new manufacturing plans and existing plants to cater to the increasing demand for the production of vehicles in the country. Like in July 2021, Maruti Suzuki India stated that it would invest INR 18,000 crore (USD 2.42 billion) in a new production facility in Haryana, with an annual manufacturing capacity of 7.5-10 lakh vehicles.

Additionally, in 2021, the Government of India introduced a new vehicle scrappage policy, where the key objective was to identify and scrap unfit automobiles from the road. This is done to reduce the emission of more greenhouse gases from the older vehicles and make way for the new vehicle compliant with BS6 (Bharat Stage 6 - similar to Euro6) emission norms.

When scrapping an old vehicle, vehicle owners may be eligible for tax savings as an incentive. As a result, the recycling business will generate more cash. Compared to older automobiles, the new vehicles will be safer, aiding the overall automobile market in India.

India Automobile Market Investments

Electric Vehicles Segment is Expected to Witness Significant Growth

In India, about 300,000 electric vehicles were sold in 2021, a 168% increase over the 100,000 units sold the previous year, with passenger EV sales in India tripled in 2021 to about 15,000 units and are still showing signs of growth.​

The government of India has undertaken multiple initiatives to promote the manufacturing and adoption of electric vehicles in India to reduce emissions and develop e-mobility in the wake of rapid urbanization.​

The National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME I and II) helped create the initial interest and exposure for electric mobility.

As of June 2021, in phase two of the FAME scheme, 87,659 electric automobiles have been sponsored through incentives, and 6,265 electric buses have been sanctioned to various state/city transportation undertakings, totaling INR 871 crore (USD 117 million).

Hence in 2021, the government announced an extension of phase two of the FAME scheme through 2024. This phase focuses on the electrification of public and shared transportation through subsidizing e-buses, electric three-wheelers, electric passenger vehicles, and electric two-wheelers.​

The Indian government has also provided tax exemptions and subsidies to EV manufacturers and consumers to promote the domestic electric vehicle industry. As per the phased manufacturing proposal, the government has imposed a 15% customs duty on parts used to manufacture electric vehicles and 10% on imported lithium-ion cells. ​

With 100% FDI allowed, new production centers, and a greater drive to improve charging infrastructure, India’s electric vehicle sector is picking up speed. Other development factors for the Indian EV sector include federal subsidies and policies supporting more significant discounts for Indian-made electric two-wheelers and a boost for localized ACC battery storage manufacturers. Improved government regulations and policies, like no license required to operate EV charging stations in India, further aid the market’s growth.​

With the increasing sales of electric vehicles in India, automakers are investing in developing new technologies and electric infrastructure and increasing their production capacities to accommodate the demand. For instance,

  • In November 2021, Indian Oil Corporation and other public oil companies exclaimed aff 22,000 electric vehicle charging stations over the next 3–5 years.
  • In May 2022, Toyota Group revealed plans to invest INR 48 billion (USD 624 million) in India to manufacture electric vehicle components.

Hence, the India Automotive Market is expected to witness robust growth in the forecast period due to the aforementioned reasons.

Electric Vehicles Registered in India

India Automobile Market Competitor Analysis

The India Automotive Market is reasonably concentrated, with the top five players having most of the market share in all the segments. The major players in the passenger car segment include Maruti Suzuki India Limited (Suzuki Motor Corporation), Tata Motors Limited, Hyundai Motor Company, Mahinda and Mahindra limited, and Honda Motor Company.

The two-wheeler market is also concentrated, with major players occupying the majority share of the market. The key players in the two-wheeler market include Hero MotoCorp Limited, Honda Motorcycle & Scooter India Pvt. Ltd. (Honda Motor Company), TVS Motor Company, Bajaj Auto Limited, and Royal Enfield (Eicher Motors Limited)

Major players in the various segments are investing in R&D and infrastructure to gain the upper hand. For instance,

  • In October 2021, Tata Motors revealed intentions to invest up to USD 2 billion in India over the next four years to develop ten new electric vehicles.
  • In December 2021, Hyundai Motor aimed to invest INR 4,000 crore (USD 531.12 million) in India by 2028 to launch six new electric vehicles.

India Automobile Market Top Players

  1. Mahindra & Mahindra Ltd

  2. Hyundai Motor Company

  3. Tata Motors Limited

  4. Honda Cars India Ltd (Honda Motor Company)

  5. Maruti Suzuki India Ltd. (Suzuki Motor Corporation)

*Disclaimer: Major Players sorted in no particular order

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India Automobile Market Recent Developments

  • In November 2021, Skoda Auto revealed ambitions to produce electric vehicles in India. However, before committing to local manufacture, the company may bring its first EV, the Enyaq, to market as a CBU.
  • In January 2022, As part of its 'Be the Future of Mobility' strategy, Hero MotoCorp announced an INR 420 crore (USD 55.76 million) investment in Ather Energy.
  • In November 2021, TVS Motor agreed to invest INR 1,200 crore (USD 159.33 million) with the Tamil Nadu government to develop new electric vehicle technologies and expand their manufacturing capacity.

India Automobile Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Two-Wheelers

      2. 5.1.2 Passenger Cars

      3. 5.1.3 Commercial Vehicles

      4. 5.1.4 Three-wheelers

    2. 5.2 By Fuel Type

      1. 5.2.1 Diesel

      2. 5.2.2 Petrol/Gasoline

      3. 5.2.3 CNG and LPG

      4. 5.2.4 Electric

      5. 5.2.5 Others

    3. 5.3 By Region

      1. 5.3.1 North India

      2. 5.3.2 South India

      3. 5.3.3 East India

      4. 5.3.4 West India

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

      1. 6.1.1 Two-Wheelers

      2. 6.1.2 Passenger Cars

      3. 6.1.3 Commercial Vehicles

      4. 6.1.4 Three-wheelers

    2. 6.2 Company Profiles*

      1. 6.2.1 Two-Wheelers

        1. 6.2.1.1 TVS Motor Company

        2. 6.2.1.2 Hero Moto Corp.

        3. 6.2.1.3 Honda Motorcycle & Scooter India Pvt. Ltd.

        4. 6.2.1.4 Royal Enfield

        5. 6.2.1.5 Bajaj Auto​ Corp.

        6. 6.2.1.6 Suzuki Motorcycle India Private Limited

      2. 6.2.2 Passenger Cars and Commercial Vehicles

        1. 6.2.2.1 Maruti Suzuki India Limited

        2. 6.2.2.2 Tata Motors Limited​ (includes Tata and Jaguar)

        3. 6.2.2.3 Hyundai Motor India Ltd

        4. 6.2.2.4 Mahindra & Mahindra Limited​

        5. 6.2.2.5 MG Motor India Pvt. Ltd ​

        6. 6.2.2.6 Volkswagen India

        7. 6.2.2.7 Renault Group (Includes Nissan and Renault)

        8. 6.2.2.8 Honda Cars India Ltd.

        9. 6.2.2.9 BYD Company Ltd.

        10. 6.2.2.10 BMW AG (includes BMW and MINI)

        11. 6.2.2.11 Mercedes-Benz India Pvt Ltd

      3. 6.2.3 Three-wheelers

        1. 6.2.3.1 Lohia Auto Industries

        2. 6.2.3.2 Piaggio & C. SpA

        3. 6.2.3.3 Scooters India Ltd.

        4. 6.2.3.4 Atul Auto Limited

        5. 6.2.3.5 Terra Motors India Corp.​

        6. 6.2.3.6 Kinetic Green Energy & Power Solutions Ltd ​​

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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India Automobile Market Research FAQs

The Analysis of Automobile Industry In India is studied from 2018 - 2028.

The Analysis of Automobile Industry In India is growing at a CAGR of 8.1% over the next 5 years.

The Analysis of Automobile Industry In India is valued at 100 Billion USD in 2018.

The Analysis of Automobile Industry In India is valued at 160 Billion USD in 2028.

Mahindra & Mahindra Ltd, Hyundai Motor Company, Tata Motors Limited, Honda Cars India Ltd (Honda Motor Company), Maruti Suzuki India Ltd. (Suzuki Motor Corporation) are the major companies operating in Analysis of Automobile Industry In India.

Analysis of Automobile Industry In IndiaIndustry Reports

In-depth industry statistics and market share insights of the Analysis of Automobile Industry In sector for 2020, 2021, and 2022. The Analysis of Automobile Industry In research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Analysis of Automobile Industry In report PDF.

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