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India’s annual production of automobiles in FY22 was 22.93 million vehicles. The two wheelers segment dominates the market in terms of volume owing to a growing middle class and a huge percentage of India’s population being young. Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector.
India is also a prominent auto exporter and has strong export growth expectations for the near future. In addition, several initiatives by the Government of India and major automobile players in the Indian market are expected to make India one of the leaders in the two wheeler and four wheeler market in the world by 2022.
The India passenger car market was valued at US$ 32.70 billion in 2021, and it is expected to reach a value of US$ 54.84 billion by 2027, while registering a CAGR of over 9% between 2022-27. The electric vehicle (EV) market is estimated to reach Rs. 50,000 crore (US$ 7.09 billion) in India by 2025.
According to NITI Aayog and the Rocky Mountain Institute (RMI), India's EV finance industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030. A report by the India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026. In addition, projection for the EV battery market is expected to expand at a CAGR of 30% during the same period.
The automotive manufacturing industry comprises the production of commercial vehicles, passenger vehicles, three wheelers and two wheelers.
In the fourth quarter of FY22, total production of passenger vehicles*, commercial vehicles#, three wheelers, two wheelers, and quadricycles was 6,014,377 units.
The Indian auto industry is expected to record strong growth in FY23, post recovering from the effects of the COVID-19 pandemic. Electric vehicles, especially two wheelers, are likely to witness positive sales in FY23.
A report by India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026. In addition, projection for the EV battery market is forecast to expand at a CAGR of 30% during the same period.
To keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry during the last few months. The industry attracted Foreign Direct Investment equity inflow (FDI) worth US$ 32.84 billion between April 2000-March 2022, accounting for 6% of the total equity FDI during the period.
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References / Read More: https://www.ibef.org/industry/india-automobiles (Note: Data except for BMW, Mercedes, Tata Motors & Volvo Auto, Daimler, JBM Auto & Scania data not available). Society of Indian Automobile Manufacturers (SIAM), and The Economic Times.
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