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Snapshot
Running in the top gear
India is expected to be the world's third-largest automotive market in terms of volume by 2026.
The Automobile industry of India, currently manufactures 26 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and quadricycles in April-March 2020, of which 4.7 mn are exported. 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.
- The EV market is expected to grow at CAGR of 44% between 2020-2027 and is expected to hit 6.34 million-unit annual sales by 2027. The EV industry will create five crore 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
- India's passenger vehicle industry is expected to post a growth of 22% - 25% in FY22
100% FDI allowed under automatic route
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World's largest tractor manufacturer and second largest bus manufacturer
World’s largest two-wheeler and three-wheeler manufacturer
World’s third largest heavy truck manufacturer and fourth largest car manufacturer
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
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Industry Scenario
The $118 bn Automobile industry is expected to reach $300 bn by 2026.
India’s annual production in FY 2020 was 26.36 Mn vehicles.
In the Automobile market in India, Two-wheelers and passenger cars accounted for 80.8% and 12.9% market share, respectively, accounting for a combined sale of over 20.1 mn vehicles in FY20. Passenger car sales are dominated by small and midsized cars.
Overall, Indian automobile export reached 4.77 million vehicles in FY20, implying a CAGR of 6.94% between FY16-FY20. Two-wheelers constituted 73.9% of the total vehicles exported, followed by passenger vehicles at 14.2%, three-wheelers at 10.5%, and commercial vehicles at 1.3%.
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 crores towards promoting manufacturing in India
Production Linked Incentive (PLI) Scheme
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.
INR 57,042 cr
Scheme Outlay
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GIS - based map displaying available infrastructure for setting up business operations in the state.
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