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Snapshot
Running in the top gear
India is the world’s third-largest Automobile market
The Automobile industry produced a total 22.93 Mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and Quadricycles in April 2021 to March 2022. India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer, and third largest heavy trucks manufacturer in the world.
- Automobile contributes nearly 6% to India’s GDP and 35% of the manufacturing GDP.
- The EV market is expected to grow at CAGR of 49% between 2022-2030 and is expected to hit 10 Mn-unit annual sales by 2030. The EV industry will create 50 Mn direct and indirect jobs by 2030.
- A market size of $50 Bn for the financing of EVs in 2030 has been identified—about 80% of the current size of India’s retail vehicle finance industry, worth $60 Bn today.
- Passenger vehicles posted highest ever sales at 25,04,084 units in FY 2022-23 as of November 2022.The industry is expected to post a growth of 16% in FY23.
- India’s trucking market is expected to grow over 4x by 2050. The number of trucks is expected to more than quadruple, from 4 Mn in 2022 to roughly 17 Mn trucks by 2050.
- India’s Automotive Industry is worth more than $222 Bn and contributes 8% of the country’s total export and accounts for 7.1% of India's GDP and is set to become the 3rd largest in the world by 2030.
- There is a shift in preferences of the customers as they have started to move towards larger/more powerful vehicles across all segments:
‒ UVs (amongst PVs) – 49% in FY22 (vs. 39% in FY21)
‒ M&HCVs (amongst CVs) – 33% in FY22 (vs. 28% in FY21)
100% FDI allowed under automatic route.
For further details, please refer FDI Policy
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India is the largest manufacturer of 3-Wheelers, passenger vehicles & Tractors
India is the 2nd largest manufacturer of 2-Wheelers after China.
World’s third largest heavy truck manufacturer and fourth largest car manufacturer
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
Industry Scenario
The $222 Bn Automobile industry is expected to reach $300 Bn by 2026.
In the Automobile market in India, Two-wheelers and passenger cars accounted for 76% and 17.4% market share, respectively. Passenger car sales are dominated by small and midsized cars.
Export of total number of automobiles increased from 4,134,047 in 2020-21 to 5,617,246 in 2021-22, registering a positive growth of 35.9%
India aims to double auto industry size to INR 15 lakh Cr by 2024 end.
In April 2021 to March 2022, Passenger Vehicle Exports increased from 404,397 to 577,875 units (registering a positive growth of 42.9%), Commercial Vehicle Exports increased from 50,334 to 92,297 units, Three-Wheeler Exports increased from 393,001 to 499,730 units and Two-Wheeler Exports increased from 3,282,786 to 4,443,018 units in April 2021 to March 2022 over same period last year.
In the Union Budget 2023, the government has increased the budget allocation of FAME II by 78 %.
GROWTH DRIVERS
Growing income
3X increase in average household income from $6,393 in 2010 to $18,448 in 2020
'Youngest Nation' by 2025
India to become the youngest nation by 2025 with an average age of 25 years
Vehicle penetration
Expected to reach 72 vehicles per 1000 people by 2025
Expanding R&D hub
India accounts for 40% of total $31 Bn of global engineering and R&D spend. 8% of the country’s R&D expenditure is in the automotive sector.
Atmanirbhar Bharat Abhiyaan - Self Reliant India
Special economic and comprehensive package of INR 20 lakh Cr towards promoting manufacturing in India.
Production Linked Incentive (PLI) Scheme
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. The PLI scheme (outlay of $3.5 Bn) for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determined sales of products manufactured in India from April 1, 2022, for a period of five consecutive years.
The scheme was closed on 9th January 2022.
Recent Developments:
1) Total of 115 companies had filed their application under this scheme. Out of 115, total 85 applicants have been approved under this PLI scheme - 18 applicants for Champion OEM Incentive scheme and 67 applicants have been approved under Component Champion Incentive scheme.
2) The scheme has been successful in attracting proposed investment of INR 67,690 crore against the target estimate of investment INR 42,500 crore over a period of five years.
3) Apart from Indian business groups, approved applicants for Champion OEM Incentive scheme include groups from countries such as Republic of Korea, USA, Japan, France, Italy, UK and Netherlands.
INR 25,938 Cr
Scheme Outlay
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09 September,01:48 PM
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