India Passenger Car Market Outlook - Growth, Trends, and Forecast (2020 - 2025)

The India Passenger Car Market Outlook has been segmented by Vehicle Type (Hatchback, Sedan, and SUV and MUV) and Fuel Type (Petrol, Diesel, and CNG).

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Market Overview

The Indian passenger car market is anticipated to register a CAGR of 9.5% during the forecast period (2019-2024).

The Indian automotive industry has been experiencing steady growth in the demand for and sales of passenger cars, owing to improvement in economic condition and rise in the consumers’ disposable incomes. The country has witnessed a gradual shift from transportation to comfortable/convenient transportation, and from convenient transportation to luxurious and safe transportation. 

  • The globalization and commercialization further helped to increase connectivity and broaden the overall automotive industry's presence and importance in the country.
  • The Indian automotive industry is shifting from just being a components manufacturer, to an assembler and manufacturer of complete vehicles, including passenger cars.
  • India is also a major exporter of automotive parts, components, and assembled vehicles to countries in the Middle East and Asia, which is expected to continue to be a major contributor to the Indian automotive industry’s revenue.
  • With the growing presence of international automobile manufacturers and brands in the country, and the consumers’ ability to purchase new cars and maintain those, the consumers have been willing to buy more than one passenger cars to suit their various daily needs and travel purposes.
  • Additionally, a consistent rise in population has been a major factor responsible for the rise in the automotive industry’s revenue, both for commercial vehicles and passenger cars.
  • Furthermore, with the growing focus on improved fuel economy and reduced exhaust emissions,  the demand for and sales of electric vehicles, especially electric cars, are expected to witness fast growth during the forecast period. However, inadequate charging infrastructure and high cost of electric cars may hinder the growth of the market.


Scope of the Report

The Indian passenger car market covers the rising demand for passenger cars in the country, incentives offered by the government for the adoption of electric vehicles, emission regulations, developments in the used-car market, and market shares of OEMs.

The market has been segmented by vehicle type and fuel type.

By Vehicle Type
By Fuel Type

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Key Market Trends

Growing Auto Component Industry

The Indian automotive component industry is expected to witness healthy growth during the forecast period, owing to increasing domestic demand, rising exports, and the increasing flow of investments in the automotive components sector. Thus, it makes India a key automotive components sourcing hub.

Additionally, the Union Budget of 2018-2019, proposed an increase in the basic custom duty on completely knocked down (CKD) imports of motor vehicles from 10% to 15%. It also proposed an increase in the minimum support price of all crops to 1.5 times of the production cost, which in turn, may aid in the rise of agricultural income, thereby, benefitting the demand for passenger cars among the consumers, especially for the entry-level cars. This, in turn, is expected to support the domestic auto component manufacturers and the passenger car market.


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Gradual Shift in Focus toward Electric Passenger Cars

Sales of electric cars in India decreased during FY 2017-2018, as compared to that in FY 2016-2017, recording a decline of 66%. In order to boost the sales of electric cars, OEMs have been collaborating with battery technology suppliers to develop long-range cars. Additionally, in order to support electric cars’ sales, the Indian government announced subsidies on the purchase of new electric cars. Currently, Mahindra & Mahindra and Tata offer electric vehicles in the Indian market. Maruti Suzuki is testing its first EV, the WagonR. 

The Indian government announced its National Electric Mobility Mission Plan (NEMMP), to support the local manufacturing capabilities of the automakers. With this roadmap, the Government of India plans to make electric vehicles economically viable and self-sustaining, by 2020. The government also announced investments of over INR 13,000 crore for demand incentives, INR 1,800 crore for R&D investments, INR 5,000 crore for power infrastructure, and INR 1,200 crore for charging infrastructure.

This plan aims at encouraging reliable, affordable, and efficient EVs that can meet the consumers’ performance demand and price expectation. It involves the collaboration of government and the industry for the promotion and development of indigenous manufacturing capabilities, consumer awareness, technological advancements, and required infrastructure, thereby, helping the country to emerge as a global leader in both electric two-wheeler and four-wheeler market, by 2022.

The government has decided to take a critical role in supporting the creation of demand and acceptability of EVs, spurring collaborative R&D efforts and enabling required infrastructure to take its shape. The government has also decided to implement a robust EV demand-generating scheme, in terms of size and duration, in order to meet the objectives of bridging the gap in the acquisition price of EVs, in comparison to the normal IC engine vehicles.


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Competitive Landscape

Maruti Suzuki led the Indian passenger car market in 2018, in the hatchback, sedan, and SUV and MUV segments. Mahindra registered the highest sales in SUVs, after Suzuki, whereas Hyundai led the hatchback and sedan segments, after Suzuki. MSIL started upgrading the engines of its most-sold vehicles that are compatible with BS6 norms, and Baleno was the first model launched in April 2019. The most sold MPV by MSIL, Ertiga, may also get a BS6 upgrade in the second- half of 2019.

Hyundai, Mahindra & Mahindra, Honda, Toyota, and Ford India have added new passenger cars to their product line-up. The vehicles launched in 2018 and Q1 of 2019 include Hyundai Santro; Honda’s Amaze and Civic; Toyota’s Camry Hybrid and Yaris; Mahindra’s XUV 500, XUV 300, TUV 300 Plus, and Marazzo; and Ford’s updated Figo, Aspire, and Freestyle.


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Table Of Contents


    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 PESTEL Analysis

    6. 4.6 Government Regulations

      1. 4.6.1 Emission Regulations

    7. 4.7 Aftermarket Scenario

    8. 4.8 Used Car Market

    9. 4.9 Car Sharing/Car Rental Market

    10. 4.10 Electric Vehicle Market Scenario


    1. 5.1 By Vehicle Type

      1. 5.1.1 Hatchback

      2. 5.1.2 Sedan

      3. 5.1.3 SUV and MUV

    2. 5.2 By Fuel Type

      1. 5.2.1 Gasoline

      2. 5.2.2 Diesel

      3. 5.2.3 CNG


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Automotive Manufacturers

        1. Maruti Suzuki India Ltd

        2. Hyundai Motor India Ltd

        3. Mahindra & Mahindra Ltd

        4. Tata Motors Ltd

        5. Honda Cars India Ltd

        6. Toyota Kirloskar Motor Pvt Ltd

        7. Volkswagen India Pvt Ltd

        8. Renault India Pvt Ltd

        9. Nissan Motor India Pvt Ltd

        10. Skoda Auto India Pvt Ltd

        11. Ford Motors India

      2. 6.2.2 Automotive Ancillary Manufacturers

        1. Robert Bosch

        2. Samvardhana Motherson Group

        3. Exide Industries Ltd

        4. WABCO India Ltd

        5. Sundaram Clayton Ltd

        6. Gabriel India Limited

        7. Bharat Forge Limited

        8. Spark Minda

        9. JBM Group

        10. India Nippon Electricals Limited

        11. Mahindra CIE Automotive Ltd



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