India Automotive Market Report and Forecast 2024-2032

India Automotive Market Size

The India automotive market value reached around USD 113.83 billion in 2023. During the forecast period between 2024 and 2032, the market is expected to grow at a CAGR of 8.10% to reach around USD 228.69 billion by 2032.

India Automotive Market Growth

Automotives pertain to self-propelled vehicles, cars, or machines and the broader industry involved in producing and maintaining vehicles for transportation. The term "automotive" includes all aspects related to the design, development, manufacturing, marketing, sales, repair, and modification of motor vehicles.

The increasing urbanisation and growing middle-class population are leading to a rise in demand for passenger cars, with a focus on green mobility solutions. The government's initiatives, such as the Production Linked Incentives (PLI) and Faster Adoption and Manufacturing of (Hybrid) & Electric Vehicles (FAME) schemes, are encouraging the adoption of electric vehicles and contributing to India automotive industry growth.

India Automotive Market Analysis

The India automotive market dynamics and trends are driven by the rising adoption of electric vehicles (EVs). The government's commitment to sustainable mobility, including a goal of 30% EV penetration by 2030, has led automakers to invest substantially in EV technology.

Tata Motors, the leading EV manufacturer in India, has launched several affordable EV models like the Tata Nexon EV and Tata Tigor EV. The availability of government subsidies and incentives for EVs, such as the FAME II scheme, has also encouraged the development and production of affordable EVs.

India Automotive Industry Outlook

The electric vehicle (EV) market is projected to grow at a compound annual growth rate (CAGR) of 49% from 2022 to 2030. Furthermore, the EV industry is expected to create 5 million direct and indirect jobs by 2030, boosting the India automotive market revenue. The transition to electric vehicles presents new market opportunities for manufacturers, enabling them to reach a growing base of eco-conscious consumers.

According to the Society of Indian Automobile Manufacturers, the fiscal year 2021-22 saw a total production of 2,30,40,066 vehicles in India, comprising 36,50,698 passenger vehicles, 8,05,527 commercial vehicles, 7,58,669 three-wheelers, 1,78,21,111 two-wheelers, and 4,061 quadricycles. By 2023-24, these figures had risen markedly, with production reaching 2,84,34,742 units. This includes 49,01,844 passenger vehicles, 10,66,429 commercial vehicles, 9,92,936 three-wheelers, 2,14,68,527 two-wheelers, and 5,006 quadricycles.

Further, as per the Society of Indian Automobile Manufacturers, in the fiscal year 2023-24, India's automobile exports have been estimated to include 6,72,105 passenger vehicles, 65,816 commercial vehicles, 2,99,977 three-wheelers, 34,58,416 two-wheelers, and 4,178 quadricycles, amounting to a total of 45,00,492 units.

The Union Cabinet of India introduced the Production-Linked Incentive (PLI) Scheme for the Automobile and Auto Components sectors, applicable to products manufactured in India from April 1, 2022, for five consecutive years. With a USD 3.5 billion outlay, the scheme offers 18% financial incentives to boost domestic production of advanced automotive technology and attract investments.

In India, the per capita private final consumption expenditure at current prices increased to USD 1,508.19 in 2022-23 from USD 1,418.74 in 2021-22 as reported by the Ministry of Statistics & Programme Implementation. This economic improvement will boost consumer purchasing power, resulting in increasing demand for personal vehicles, thus driving the growth of the India automotive industry.

A large and increasing consumer base drives high sales volumes across various vehicle segments.

• Favorable policies, incentives, and subsidies for electric vehicles and manufacturing boost growth of the India automotive industry.

• A wide range of products, from two-wheelers to commercial vehicles, caters to different consumer needs and preferences.

Inadequate infrastructure, including insufficient charging stations for EVs, hampers market growth.

• Frequent regulatory changes and compliance issues can increase operational costs and affect industry stability.

• Economic instability and fluctuations in consumer spending impact overall vehicle sales and market performance.

Growing interest in EVs opens new market segments and opportunities for the India automotive market.

• Increasing urbanization drives demand for personal and commercial vehicles in emerging cities.

• Expanding into international markets offers growth opportunities and revenue diversification.

High competition from both domestic and international players can erode profit margins.

• Volatility in the prices of raw materials affects production costs and pricing strategies.

• Stringent environmental regulations may increase compliance costs and require continuous adaptation.

Key Players in the India Automotive Market and their Key Initiatives

Tata Motors Ltd

• Expanding its electric vehicle portfolio with 10 models by 2025 to capture the India automotive market opportunities.

• Tata Motors and Microsoft India collaborated to redefine the connected experience for automobile users.

Mahindra & Mahindra Limited

• Unveiled its first electric SUV on World EV Day. 

• Ford and Mahindra collaborated to develop vehicles to support the growth of sustainable mobility.

Toyota Motor Corp

• Launched the pilot project on Flexi-Fuel Strong Hybrid Electric Vehicle Technology in Delhi.

• Enhance its manufacturing capacity in India to meet the growing demand of the India automotive market.

Volkswagen AG

• Introduced Taigun and Virtus models.

• Launched digital platforms for sales and after-sales services.

India Automotive Industry Segmentation

“India Automotive Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Passenger Vehicles
  • Hatchback
  • Sedan
  • SUV
  • MUV
• Commercial Vehicles
  • LCVs
  • Heavy Trucks
  • Buses and Coaches

Market Breakup by Transmission

• Automatic

• Manual

Market Breakup by Propulsion Type

• Internal Combustion

• Electric

• Hybrid

Market Breakup by Vehicle Type

• LMV

• MCWG

• HGMV

India Automotive Market Share

The India automotive market demand is dominated by hatchbacks due to their smaller size, affordability, and suitability for India's urban roads. Meanwhile, the rising preference for versatility, space, and a commanding driving position has driven the demand for SUVs among Indian consumers.

As per India automotive market analysis, the sedan segment has maintained a steady presence by offering a balance of comfort, performance, and style, which appeals to a wide range of consumers. The MPV/MUV segment is projected to grow at a high CAGR as these vehicles are popular for their ability to accommodate large families.

Leading Companies in the India Automotive Market

The companies have a diverse portfolio of products and services and are known for their passenger cars, commercial vehicles, motorcycles, engines, and turbomachinery.

• Tata Motors Ltd 

• Mahindra & Mahindra Limited 

• Toyota Motor Corp 

• Volkswagen AG 

• Ford Motor Company 

• Renault SA 

• Honda Motor Co., Ltd. 

• Hyundai Motor Company 

• General Motors Company 

• Kia Corporation 

• Mercedes-Benz Group AG

Key Highlights of the Report

India Automotive Market Report Snapshots

India Automotive Market Size

India Automotive Market Growth

India Automotive Market Analysis

India Automotive Market Share

India Automotive Companies