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Leading Global Automotive Manufacturing Hub

The growing presence of global automobile Original Equipment Manufacturers (OEMs) in the Indian manufacturing landscape has significantly increased the localization of their components in the country. India has become the preferred designing and manufacturing base for most global auto OEMs for local sourcing and exports

100% FDI allowed under automatic route

for more details refer FDI Policy 2017

HIGHLIGHTS

  • Rapidly growing Indian auto market expected to touch USD 300 bn by 2026
  • Auto components exports to grow 5 times in next ten years
  • Indian automotive aftermarket segment expected to reach USD 32 bn by 2026

Industry Scenario

The USD 43.5 bn Indian auto component industry is expected to grow to USD 200 bn by 2026.

Auto components exports, currently valued at USD 10.9 bn, is expected to grow at an annual rate of 3.1% to reach USD 80 bn by 2026.  USA, Germany, Turkey, UK, and Italy are the top destinations for exports.

Aftermarket segment which includes tyre, battery, brake parts, etc is expected to reach USD 32 bn by 2026 from USD 8.4 bn currently.

Growth Drivers

Auto comp GD
  • Contribution to GDP

    2.3%

  • Employment generated

    3 mn

  • Share of Transmission, Steering parts

    31%

  • Hybrid & electric vehicles sale (by 2020)

    6 mn plus

Key policies

Automotive Mission Plan (2016-26)

Envisions to develop India as one of the top 3 automobile manufacturing, engineering and export hubs in the world with a turnover of USD 300 bn. Moreover, the plan aims to generate 65 mn direct & indirect jobs and contribute 12% to India's GDP by 2026.

Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME)

Offers incentives on electric and hybrid vehicles of up to USD 430 for bikes and USD 2050 for cars.

National Auto Policy 2018

The objectives of the National Auto Policy will be met through policy interventions across five identified focus areas:

1. Innovation, Research and Development

2. Vehicle Manufacturing

3. Auto Component Manufacturing in India

4. Green Mobility

5. Eco-system development

National Electric Mobility Mission Plan 2020 (NEMMP)

Aims at creating a vehicle base of approximately 7 mn electric cars by 2020. India plans to become an ‘All Electric Fleet’, by 2030.

National Automotive Testing and R&D Infrastructure Project (NATRIP)

Aims to create a testing, validation and R&D infrastructure, and has invested USD 265 mn crore for setting up of seven auto testing facilities across India.

FDI Facts

  • Share in total FDI inflows

  • Jump in the auto sector FDI from 2014-2016

  • FDI allowed in the sector

Recent Investments

  • April 2018 – Hong Kong-listed Nexteer Automotive is planning to set up a plant in Chennai, Tamil Nadu for manufacturing of electronic power steering which is expected to be functional towards the end of 2018.

  • March 2018Setco Automotive, the home grown clutch manufacturer for commercial vehicles, is planning to invest USD 30-38 mn in 2-3 years in capacity expansion and plant modernization.

  • February 2018 - Auto maker Mahindra and Mahindra tied up with Korea-based battery manufacturer LG Chem for development of a unique cell exclusively for India.

  • September 2017 - Hella India Automotive to set up second manufacturing facility in Gujarat; plans new products for hybrids and EVs in India.

  • September 2017 - Suzuki, Toshiba, Denso to jointly produce EV batteries in India.

Major Investors