Vehicle Business in India, Indian Vehicle Business, Sector, Developments, Statistics


India turned the fourth largest auto market in 2019 displacing Germany with about 3.99 million items bought within the passenger and business autos classes. India is anticipated to displace Japan because the third largest auto market by 2021.

The 2 wheelers section dominate the market when it comes to quantity owing to a rising center class and a younger inhabitants. Furthermore, the rising curiosity of the businesses in exploring the agricultural markets additional aided the expansion of the sector.

India can be a outstanding auto exporter and has sturdy export development expectations for the close to future. As well as, a number of initiatives by the Authorities of India and main vehicle gamers within the Indian market is anticipated to make India a frontrunner within the two-wheeler and four-wheeler market on this planet by 2020.

Market Measurement

Home cars manufacturing elevated at 2.36% CAGR between FY16-20 with 26.36 million autos being manufactured within the nation in FY20. General, home cars gross sales elevated at 1.29% CAGR between FY16-FY20 with 21.55 million autos being bought in FY20.

Two wheelers and passenger autos dominate the home Indian auto market. Passenger automobile gross sales are dominated by small and mid-sized automobiles. Two wheelers and passenger automobiles accounted for 80.8% and 12.9% market share, respectively, accounting for a mixed sale of over 20.1 million autos in FY20.

As per the Society of Indian Vehicle Producers (SIAM), passenger automobile wholesales in India elevated by 26.45% to 2,72,027 items in September 2020, up from 2,15,124 in September 2019.

General, vehicle export reached 4.77 million autos in FY20, rising at a CAGR of 6.94% throughout FY16-FY20. Two wheelers made up 73.9% of the autos exported, adopted by passenger autos at 14.2%, three wheelers at 10.5% and business autos at 1.3%.

EV gross sales, excluding E-rickshaws, in India witnessed a development of 20% and reached 1.56 lakh items in FY20 pushed by two wheelers.

Premium bike gross sales in India recorded seven-fold leap in home gross sales, reaching 13,982 items throughout April-September 2019. The sale of luxurious automobiles stood between 15,000 to 17,000 within the first six months of 2019.


With a view to sustain with the rising demand, a number of auto makers have began investing closely in numerous segments of the trade throughout the previous couple of months. The trade has attracted Overseas Direct Funding (FDI) value US$ 24.53 billion between April 2000 and June 2020, in line with the info launched by Division for Promotion of Business and Inner Commerce (DPIIT).

A few of the current/deliberate investments and developments within the vehicle sector in India are as follows:

  • In October 2020, Kinetic Inexperienced, an electrical autos producer, introduced plan to arrange a producing facility for electrical golf carts in addition to a battery swapping unit in Andhra Pradesh. The 2 initiatives involving organising a producing facility for electrical golf carts and a battery swapping unit will entail an funding of Rs. 1,750 crore (US$ 236.27 million).
  • In October 2020, Japan Financial institution for Worldwide Cooperation (JBIC) agreed to supply US$ 1 billion (Rs. 7,400 crore) to SBI (State Financial institution of India) for funding the manufacturing and gross sales enterprise of suppliers and sellers of Japanese vehicle producers and offering auto loans for the acquisition of Japanese cars in India.
  • In October 2020, MG Motors introduced its curiosity in investing Rs. 1,000 crore (US$ 135.3 million) to launch new fashions and increase operations regardless of the anti-China sentiments.
  • In October 2020, Ultraviolette Automotive, a producer of electrical motorbike in India, raised a disclosed quantity in a sequence B funding from GoFrugal Applied sciences, a software program firm.    
  • In September 2020, Toyota Kirloskar Motors introduced investments of greater than Rs 2,000 crore (US$ 272.81 million) in India directed in the direction of electrical elements and expertise for home prospects and exports.
  • Throughout early September 2020, Mahindra & Mahindra singed a MoU with Israel-based REE Automotive to collaborate and develop business electrical autos.
  • In April 2020, TVS Motor Firm purchased UK’s iconic sporting motorbike model, Norton, for a sum of about Rs. 153 crore (US$ 21.89 million), making its entry into the highest finish (above 850cc) section of the superbike market.
  • In March 2020, Lithium City Applied sciences partnered with renewable power options supplier, Fourth Associate Vitality, to construct charging infrastructure throughout the nation.
  • In January 2020, Tata AutoComp Methods, the auto-components arm of Tata Group entered a three way partnership with Beijing-based Prestolite Electrical to enter the electrical automobile (EV) elements market.
  • In December 2019, Drive Motors deliberate to speculate Rs. 600 crore (US$ 85.85 million) to develop two new fashions over the subsequent two years.
  • In December 2019, Morris Garages (MG), a British vehicle model, introduced plans to speculate an extra Rs. 3,000 crore (US$ 429.25 million) in India.
  • Audi India deliberate to launch 9 all-new fashions together with Sedans and SUVs together with futuristic E-tron EV by finish of 2019.
  • MG Motor India deliberate to launch MG ZS EV electrical SUV in early 2020 and have plans to launch reasonably priced EV within the subsequent 3-4 years.
  • BYD-Olectra, Tata Motors and Ashok Leyland will provide 5,500 electrical buses for various state departments.

Authorities Initiatives

The Authorities of India encourages international funding within the vehicle sector and has allowed 100% international direct funding (FDI) below the automated route.

A few of the current initiatives taken by the Authorities of India are –

  • Beneath Union Price range 2019-20, the Authorities introduced to supply extra earnings tax deduction of Rs. 1.5 lakh (US$ 2,146) on the curiosity paid on the loans taken to buy EVs.
  • The Authorities goals to develop India as a world manufacturing centre and a Analysis and Growth (R&D) hub.
  • Beneath NATRiP, the Authorities of India is planning to arrange R&D centres at a complete value of US$ 388.5 million to allow the trade to be on par with international requirements.
  • The Ministry of Heavy Industries, Authorities of India has shortlisted 11 cities within the nation for introduction of EVs of their public transport methods below the FAME (Quicker Adoption and Manufacturing of (Hybrid) and Electrical Autos in India) scheme. The Authorities can even arrange incubation centre for start-ups working within the EVs house.
  • In February 2019, the Authorities of India accredited FAME-II scheme with a fund requirement of Rs. 10,000 crore (US$ 1.39 billion) for FY20-22.


Following are the achievements of the Authorities within the final 4 years:

  • In H12019, vehicle producers invested US$ 501 million in India’s auto-tech start-ups in line with Enterprise intelligence.
  • Funding circulation into EV start-ups in 2019 (until finish of November) elevated practically 170% to succeed in US$ 397 million.
  • On twenty ninth July 2019, Inter-ministerial panel sanctioned 5,645 electrical buses for 65 cities.
  • NATRiP’s proposal for “Grant-In-Support for check facility infrastructure for EV efficiency Certification from NATRIP Implementation Society” below the FAME Scheme was accredited by Venture Implementation and Sanctioning Committee (PISC) on third January 2019.
  • Beneath NATRiP, following testing and analysis centres have been established within the nation since 2015
    • Worldwide Centre for Automotive Expertise (ICAT), Manesar
    • Nationwide Institute for Automotive Inspection, Upkeep & Coaching (NIAIMT), Silchar
    • Nationwide Automotive Testing Tracks (NATRAX), Indore
    • Automotive Analysis Affiliation of India (ARAI), Pune
    • International Automotive Analysis Centre (GARC), Chennai
  • SAMARTH Udyog – Business 4.0 centres: ‘Demo cum expertise’ centres are being arrange within the nation for selling good and superior manufacturing serving to SMEs to implement Business 4.0 (automation and knowledge trade in manufacturing expertise).

Highway Forward

The auto trade is supported by numerous elements comparable to availability of expert labour at low value, sturdy R&D centres, and low-cost metal manufacturing. The trade additionally gives nice alternatives for funding and direct and oblique employment to expert and unskilled labour.

Indian automotive trade (together with part manufacturing) is anticipated to succeed in Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026.


References: Worldwide Group of Motor Automobile Producers, Media Experiences, Press Releases, Division for Promotion of Business and Inner Commerce (DPIIT), Automotive Part Producers Affiliation of India (ACMA), Society of Indian Vehicle Producers (SIAM), Union Price range 2015-16, Union Price range 2019-20

Be aware: Conversion fee utilized in April 2020, Rs. 1 = US$ 0.013123

Disclaimer: This data has been collected by secondary analysis and IBEF isn’t accountable for any errors in the identical.


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