Automobile Industry of India Overview
| Share in India’s GDP | 7.10% |
| Employment generated | 35 Million |
| Share in global R&D | 40% |
| Share in India’s exports | 4.30% |
India is the worlds largest two-wheeler, three-wheeler, tractor manufacturer and 2nd largest bus, manufacturer and 3rd largest heavy truck manufacturer and 4th largest car manufacturer. Currently, the automotive industry of India manufactures 26 million vehicles including Three Wheelers, Two Wheelers Passenger Vehicles, Commercial Vehicles and Quadricycles in April-March 2020, of which 4.7 million are exported. India is playing an important role in the automobile industry globally and holds a strong position in the heavy vehicles segment globally as it is the largest tractor manufacturer, 2nd largest bus manufacturer hub, third-largest heavy trucks manufacturer hub in the world. The automobile getting down because of COVID pandemic but will increase by 2023. Let see the automobile industry growth as mentioned here.
- During April-March 2020, overall automobile exports recorded a growth of 2.95% of which two-wheeler registered a growth of 7.30% and passenger vehicles export growth increased by 0.17%
- EV industry will see a huge growth by 2030 and will create 5 crore direct and indirect jobs.
- Automobile industry sector attracted $24.5 billion FDI during Apr 2000-June 2020
Automobile Industry Scenario
In 2018, annual production had been 29.08 million which has been 30.91 million vehicles, registered a good growth of 6.26%. In FY 2018-19, sale of passenger vehicles increased by 2.70%, two-wheeler by 4.86% and three-wheeler by 10.27% against FY 2017-18. By 2021, India will emerge as the worlds 3rd largest in the passenger vehicle segment.
By 2026, the automobile industry of India will be expected to reach USD 300 billion
Automobile Industry Growth Factors
- Under Atmanirbhar Bharat package, India is planning to spend 51,000 cr
- Under Self Reliant India, a comprehensive package of INR 20 lakh crore has been sanctioned towards promoting manufacturing in India.
- India will be the youngest nation by 2025, with an average age of 25 years.
- Vehicle penetration expected to reach 72 vehicles against 1000 people by 2025
- Country is investing 8% of R& D expenditure in the automotive sector
- Household income will be increased by 2020
Major Investors
Ford, GM, ISUZU, MAN, Mercedes-Benz, PIAGGIO, SCANIA, VOLVO, VOLKSWAGEN, BMW, FIAT, NISSAN, Hyundai, SUZUKI, RENAULT, TOYOTA
Investment in Automobiles Industry
According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT). The automobile industry attracted Foreign Direct Investment (FDI) worth USD 24.5 billion between April – June 2020. Several auto manufacturers have started investing in India’s automobile.
- In Oct 2020, MG Motors have shown interest in investing INR 1000 cr to launch new car variants and models
- In Oct 2020, Ultraviolette Automotive, a manufacturer of electric motorcycle in India raised disclosed investment from a software company (GoFrugal Technologies)
- In Sept 2020, Toyota Motors announced investments of more than Rs 2,000 crore in India for domestic customers and exports to develop electric component and enhance new technology.
- In Sept 2020, Mahindra & Mahindra and Israel-based REE Automotive signed an MOU to develop commercial vehicles.
- Volkswagen merged of its three entity in India and made new entity called as Skoda Auto Volkswagen India Private Limited.
Top & Major Manufacturers in Automobile Industry
- Bajaj Auto
- Daewoo Motors India
- DC Designs
- Eicher Motors
- Ford India Ltd.
- General Motors India
- Hero Motors
- Hindustan Motors
- Hyundai Motor India Ltd.
- Royal Enfield Motors
- Swaraj Mazda Ltd
- Telco
- TVS Motors
Source: (investindia.gov, ibef.org)