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The automotive industry in India has been witnessing dynamic market trends, reflecting both challenges and opportunities. Over the past few years, several significant shifts have been observed, reshaping the landscape of the sector. One notable trend is the growing preference for electric vehicles (EVs). With increasing awareness about environmental concerns and government incentives promoting cleaner mobility solutions, the demand for EVs has been steadily rising. Major automotive players are investing in research and development to enhance their EV offerings, aiming to capitalize on this emerging market segment.
Another prominent trend is the surge in demand for connected and autonomous vehicles. With advancements in technology, vehicles are becoming more interconnected, offering features like GPS navigation, real-time diagnostics, and remote monitoring. Additionally, the prospect of self-driving cars is gaining traction, driven by the promise of improved safety, efficiency, and convenience. As a result, automotive manufacturers are integrating more sophisticated software and hardware into their vehicles to cater to this evolving consumer demand.
Furthermore, there is a noticeable shift towards shared mobility solutions, particularly in urban areas. Ride-hailing services and car-sharing platforms have become increasingly popular, offering convenient and cost-effective alternatives to traditional car ownership. This trend is driven by factors such as changing consumer preferences, traffic congestion, and the desire for flexible transportation options. Automakers are recognizing the importance of this trend and are collaborating with mobility service providers to develop customized solutions tailored to the needs of shared mobility users.
Additionally, the Indian automotive industry is witnessing a renewed focus on sustainability and fuel efficiency. With rising concerns about climate change and fluctuating fuel prices, there is growing pressure on automakers to develop more eco-friendly and fuel-efficient vehicles. This has led to the introduction of advanced technologies such as hybrid powertrains, lightweight materials, and aerodynamic designs, aimed at reducing emissions and improving fuel economy. Government regulations mandating stricter emission norms have further accelerated this trend, compelling manufacturers to invest in cleaner and greener technologies.
Moreover, digitalization is reshaping various aspects of the automotive industry, from manufacturing processes to sales and marketing strategies. Automakers are embracing digital tools and technologies to streamline operations, optimize supply chains, and enhance the customer experience. Online sales platforms, virtual showrooms, and digital marketing campaigns are becoming increasingly prevalent, allowing companies to reach a wider audience and adapt to changing consumer behaviors. Furthermore, data analytics and artificial intelligence are being leveraged to gain insights into customer preferences, improve product development, and personalize services.
Despite these positive trends, the Indian automotive industry also faces several challenges. Economic uncertainties, fluctuating raw material prices, and geopolitical tensions can impact market dynamics and profitability. Moreover, infrastructure constraints such as inadequate charging infrastructure for EVs and poor road conditions can hinder the widespread adoption of new technologies. Additionally, regulatory uncertainties and policy changes pose risks to long-term investment plans and business strategies.
In conclusion, the automotive industry in India is undergoing significant transformation driven by evolving consumer preferences, technological advancements, and regulatory changes. While challenges persist, there are abundant opportunities for growth and innovation. By staying abreast of market trends, leveraging emerging technologies, and adapting to changing consumer needs, automotive companies can position themselves for success in this dynamic and competitive landscape.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Opportunities | Growing government support for policies Global leaders are investing more in the production of automobiles in India |
| Market Dynamics | Growing demand for electric vehicles Rising numbers of middle-class people |
India Automotive Industry Market Highlights:
India Automotive Industry Market Overview:
India Automotive Industry Market Size was valued at USD 100.5 Billion in 2022. The Global India Automotive Industry is projected to grow from USD 109.3 Billion in 2023 to USD 214.7 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.80% during the forecast period (2023 - 2032). Market drivers contributing to the market's expansion include the expanding middle class, technological advancements in the automotive sector, and government programs and laws that facilitate the establishment of the automotive sector.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
India Automotive Industry Market Trends
Increasing demand for cars is driving the market growth
In India, the automobile industry contributes 7.1% of the country's GDP and 49% of the manufacturing GDP. As a result, India's car industry plays a big role in both macroeconomic expansion and technological improvement. Therefore, the government's main goal is to increase the automobile industry's share by enacting new laws and programs. The Indian government anticipates that 8–10 billion USD in local and foreign investment will reach the automotive sector by 2023. For instance, as part of a larger series of nation-building initiatives, the Prime Minister unveiled the Made in India program in 2014.
The goal of Make in India was to turn India into a powerhouse for global design and manufacturing in response to a critical situation. In order to meet the growing demand for automobile production in the nation, numerous manufacturers are investing in both new and existing plants. Furthermore, the Indian government unveiled a new car scrappage strategy in 2021, with the main goal being to locate and remove unsafe cars from the road. This reduces the amount of greenhouse gases that the older cars emit and makes room for the new car that complies with BS6 (Bharat Stage 6 - equivalent to Euro6) emission standards. This will boost the market CAGR.
Around 300,000 electric cars were sold in India in 2021—a 168% increase over the 100,000 units sold the year before. Sales of passenger EVs in India tripled to approximately 15,000 units in 2021, and they are still exhibiting growth.In response to increasing urbanization, the Indian government has launched various programs to encourage the production and use of electric vehicles domestically. The goal is to lower emissions and advance e-mobility.The Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME I and II) and the National Electric Mobility Mission Plan (NEMMP) also contributed to generating the early interest in and exposure to electric mobility.
Furthermore, to support the indigenous electric vehicle industry, the Indian government has also given tax breaks and subsidies to EV producers and users. The government has put a 15% customs tariff on parts used to make electric vehicles and a 10% duty on imported lithium-ion cells in accordance with the phased production proposal. Additionally, manufacturers are investing in the development of new technologies and electric infrastructure in addition to increasing its production capacity to meet the demand brought about by the rising sales of electric vehicles in India. Thus, driving the Market revenue.
India Automotive Industry Market Segment Insights:
India Automotive Industry Market Vehicle Type Insights
The market segmentation, based on vehicle type includes Two-Wheelers, Passenger Cars, Commercial Vehicles and Three-wheelers. The three-wheelers segment dominated the market mostly. Short-distance transportation is frequently provided by three-wheelers. Since three-wheelers offer inexpensive short-distance passenger transportation, the market benefits from Indian consumers' great price sensitivity. Because of the country's expanding population, which sustains transportation need, the demand is anticipated to be constant over time.
India Automotive Industry Market Fuel Type Insights
The India Automotive Industry market segmentation, based on fuel type, includes Diesel, Petrol/Gasoline, CNG and LPG, Electric and Others. The electric category generated the most income. A number of factors, such as government incentives, increased environmental awareness, and technological breakthroughs, are contributing to the boom in demand for electric vehicles that the Indian automotive sector is experiencing. Government rules and incentives have played a significant role in driving the adoption of EVs in India.
Figure 1: India Automotive Industry Market by Fuel Type, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
India Automotive Industry Market Regional Insights
India is a globally recognized center for automobile manufacture due to its affordable output. The manufacturing sector is driven by cheap labor costs, easy access to and low cost raw materials, and a weak currency. With an average yearly production of about 4 million motor cars, India ranks as the fourth largest producer of automobiles worldwide. The growing middle class and younger population in India are also expected to contribute significantly to the country's automobile market's projected rapid expansion. Additionally, exports from the nation have increased significantly as a result of the growing demand for autos. Indian car exports increased from 291,170 units in April to December 2021 to 424,037 units in December 2021. Furthermore, the market is anticipated to see increased demand for commercial vehicles from the expanding passenger and logistical sectors. Policies and initiatives from the government have a significant impact on market growth and are predicted to continue doing so in the years to come.
India Automotive Industry Market Key Market Players & Competitive Insights
Leading market players are investing heavily in research and development in order to expand their product lines, which will help the India Automotive Industry Market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, automotive industry industry must offer cost-effective items.
Key Companies in the India Automotive Industry Market include
- TVS Motor Company
- Hero Moto Corp.
- Honda Motorcycle & Scooter India Pvt. Ltd.
- Royal Enfield
- Bajaj Auto​ Corp.
- Suzuki Motorcycle India Private Limited
- Tata Motors Limited​ (includes Tata and Jaguar)
- Hyundai Motor India Ltd
- Mahindra & Mahindra Limited​
- MG Motor India Pvt. Ltd ​
- BMW AG (includes BMW and MINI)
- Mercedes-Benz India Pvt Ltd
- Lohia Auto Industries
- Piaggio & C. SpA
- Scooters India Ltd.
- Atul Auto Limited
- Terra Motors India Corp.​
India Automotive Industry Market Industry Developments
In July 2024, Tata Elxsi, a prominent multinational corporation specializing in design and technology services, and Emerson, a worldwide leader in automation, collaboratively opened the Tata Elxsi + NI Mobility Innovation Centre (TENMIC) in Bengaluru. This state-of-the-art facility is dedicated to expediting automotive innovation by utilizing modern technology, software solutions, and worldwide knowledge. The launch event was attended by senior technology and R&D professionals from global OEMs, automotive suppliers, and semiconductor businesses. The event was sponsored by top executives from both companies. This emphasizes the importance of TENMIC and the partnership between Tata Elxsi and NI in improving automotive development and fostering innovation.
In June 2024, DAEWOO introduced its state-of-the-art automotive batteries designed for use in automobiles, trucks, tractors, and buses. DAEWOO's vehicle batteries utilize cutting-edge technology to ensure maximum performance. The product is built with a strong and sturdy structure to improve its durability and lifespan. It also features increased vibration resistance, making it suited for rough terrains. Additionally, it has a maintenance-free design, ensuring that owning it is hassle-free. DAEWOO offers automobile four-wheeler batteries with a comprehensive warranty, ensuring customer pleasure and demonstrating the company's dedication to quality.
India Automotive Industry Market Segmentation
India Automotive Industry Market Vehicle Type Outlook
- Two-Wheelers
- Passenger Cars
- Commercial Vehicles
- Three-wheelers
Automotive Industry Fuel Type Outlook
- Diesel
- Petrol/Gasoline
- CNG and LPG
- Electric
- Others
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