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Automobile

The Indian automobile industry has historically been a good indicator of how well the economy is doing, as the automobile sector plays a key role in both macroeconomic expansion and technological advancement. The two-wheelers segment dominates the market in terms of volume, owing to a growing middle class and a huge percentage of India’s population being young. 

Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector. The rising logistics and passenger transportation industries are driving up demand for commercial vehicles. Future market growth is anticipated to be fueled by new trends including the electrification of vehicles, particularly three-wheelers and small passenger automobiles. 

India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world.India’s annual production of automobiles in FY23 was 25.9 million vehicles. India has a strong market in terms of domestic demand and exports. This sector's share of the national GDP increased from 2.77% in 1992-1993 to around 7.1% presently. It employs about 19 million people directly and indirectly.

  • Automobile Sector resulted in 5.35% of the total FDI inflow as per the Dec 2023 DPIIT Report.

  • The EV market is expected to grow at CAGR of 49% between 2022-2030 and the EV industry would create 5 million direct and indirect jobs by 2030.

  • A market size of US$ 50 billion for the financing of EVs in 2030 has been identified, about 80% of the current size of India’s retail vehicle finance industry, worth US$ 60 billion now.

  • India’s trucking market is expected to grow over 4x by 2050. The number of trucks is expected to more than quadruple, from 4 million in 2022 to roughly 17 million trucks by 2050.

  • As per the Society of Indian Automobile Manufacturers (SIAM), the Auto industry generates employment of 13 persons for each truck, 6 persons for each car and four persons for each three wheelers and one person for each two-wheelers

  • Export of total number of automobiles in 2022-23 was recorded at 47,61,487 out of which two wheelers accounted for about 77% of the total exports. 

  • In Apr 2022 to Mar 2023, Passenger Vehicle Exports increased from 5,77,875 to 6,62,891 units, registering a positive growth of 14.7%. 

  • Vehicle penetration is expected to reach 72 vehicles per 1000 people by 2025

  • India accounts for 40% of total US$ 31 billion of global engineering and R&D spend. 8% of the country’s R&D expenditure is in the automotive sector.

  • Under the Atmanirbhar Bharat Abhiyaan - Self Reliant India, Special economic and comprehensive package of INR 20 Lakh Cr is allotted towards promoting manufacturing in India.