Market Reports

Automotive Sector In India

1	Indian Automotive Sector: Quick Facts
2	Automotive Clusters in India
3	Megatrends Impacting the Indian Automotive Sector
4	India’s Automobile Industry Scenario
5	Overview of Electric Vehicles Market in India
6	Key Investments in the EV Industry
7	Recent/Planned Developments in the Indian Automobile Sector

Indian Automotive Sector: Quick Facts

The world’s largest two-wheeler manufacturer

Third largest heavy truck manufacturer

World’s largest manufacturer of tractors

World’s second-largest bus manufacturer and fourth-largest manufacturer of cars

Seventh largest in commercial vehicle manufacturing

Automobile sector contributes 49% to India’s manufacturing GDP

India exported ~ 4.8 million automobiles in 2022-23

Indian Government targets 30% vehicles on road should be electric by 2030

Total 3.7 Mn electric vehicles already registered in India

12,146 operational Public EV charging stations in India currently

419 public EV charging stations operational on national highway

Y-o-y growth of 209% was witnessed with 1.0 million registered EVs in FY23, as compared to FY22

7.1% Share in India's GDP

37 million Employment generated

4.7% share in India’s exports

FDI worth USD 35.4 billion from April 2000 to September 2023 which is around 5.5% of the total FDI inflows in India during the same period

In the Union Budget 2023, the government has increased the budget allocation of (Faster Adoption and Manufacturing of Electric Vehicles) FAME II by 78%

Automotive Clusters in India

In FY 2022-23, the Indian automobile industry produced a total 25.9 million vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and Quadricycles.
Predominant automotive clusters of India are Jamshedpur, Pune, Chennai, Gurugram, Faridabad, and Pithampur.
Two-wheelers and passenger vehicles together dominated India’s automobile production and accounted for 92.7% share in total vehicle production.

Automotive - Leading Players

North India

Ashok Leyland
Amtek Auto
Bajaj Auto
Force Motors
Piaggio
Swaraj Mazda
Volvo
Eicher
Honda Motor Company
Maruti Suzuki
Tata Motors
Hero MotoCorp
Escorts Kubota Ltd.
Sonalika Group
Yamaha Motor Company
Mahindra & Mahindra

West India

Ashok Leyland
Bajaj Auto
Fiat
Maruti Suzuki
Mahindra & Mahindra
Skoda
Tata Motors
Volkswagen
Renault Group
Nissan
John Deere
Mercedes Benz Group
Tata Hitachi
Volvo
Eicher
Kia Motors
Toyota Motor Corporation

East India

Tata Motors
Hindustan Motors
Maruti Suzuki
Bajaj Auto
Toyota Motor Corporation
Hyundai Motors Company
Volvo
Eicher
Honda Motor Company
Mahindra & Mahindra

South India

Ashok Leyland
Mahindra & Mahindra
Toyota Motor Corporation
Volvo
Eicher
Maruti Suzuki
Royal Enfield
Hyundai Motors Company
BMW
Bosch
TVS Motor Company
Renault Group
Nissan

Megatrends Impacting the Indian Automotive Sector

Global Influence

Indian companies going global.
Next wave of global companies coming to India to set up their plant.

Mobility Infrastructure

Encouragement given to public.
Smart cities projects.
Huge FDI and private sector investments in road infrastructure.

Evolving Customer Expectations

Advancement in automobile production technology.
Customers are becoming more digitally savvy.
Surge in institutional customers.

Evolving Technologies

The rapid adoption of new technologies in

Vehicles (electric, driverless, connected).
Supply chain (digitized trucking, automated warehouses).
Business (mobility, sharing).

Regulatory Environment

Shift from BS IV to BS VI standards.
Introduction of CAFÉ norms, ABS for two-wheelers, higher axle loads for commercial vehicles, and end-of-life scrappage policies.
Adoption of Electric Vehicles through FAME-2.
National Automotive Testing and R&D centers have been setup.

India’s Automobile Industry Scenario

Overview of the Electric Vehicles Market in India

According to Invest India, India’s Electric vehicles market is expected to expand at a compounded annual growth rate (CAGR) of 45.5% between 2024-2030, with the segment’s volumes set to cross annual sales of 16 million units by 2030.

Key growth drivers include:

Expanding the deployment of charging stations.
Rising acceptance of low-emission, fuel-efficient, and high-performance automobiles.
Increased environmental consciousness among citizens.
The Fame India scheme is also started to promote electric vehicles.

The Government of India has taken initiatives to promote electric vehicle adoption in India. Some of them are:

Tax exemption of up to Rs. 1,50,000 under Section 80EEB of the Income Tax Act for purchasing an EV (2W or 4W) on loan.
Reduction of customs duty on nickel ore (a key component of lithium-ion batteries) from 5% to 0%.
State-specific concessions on road tax and other incentives given by the respective states.

There are huge opportunities for foreign companies in this sector, especially for manufacturing battery compounds, and other components and setting up charging stations.

Some of Key Investments in EV Industry

Company	EV related plans
Kia	Kia intends to start producing compact SUVs and electric vehicles in India for global markets in 2025
Maruti Suzuki	By 2025, Maruti Suzuki intends to introduce its first electric vehicle in India.
Tata Motors	The government placed an order with Tata Motors for Rs. 5,000 crore for electric buses, and the company intends to introduce 10 additional EVs in India.
Hopcharge	Hopcharge, a Gurgaon-based start-up, has created the world’s first on-demand doorstep fast charge service
MG Motors	MG Motors India has partnered with Bharath Petroleum to expand the EV charging infrastructure
Mahindra & Mahindra	By 2027, Mahindra & Mahindra plans to introduce 16 EV models in its SUV and LCV segments.
Hero MotoCorp	Hero MotoCorp announced an investment of Rs. 500 crore in California-based Zero Motorcycles to collaborate on the development of electric motorcycles
MG Motors	MG Motors announced plans to raise Rs. 3,000–4,000 crore in private equity in India to fund its future needs, including EV expansion
Hyundai Motors Company	Hyundai Plans to invest Rs. 4,000 crore in R&D in India, to launch six EVs by 2028

Recent and planned developments in the Indian Automobile Sector

According to IBEF, In November 2023, Tata Motors inaugurated its state-of-the-art registered vehicle scrapping facility in Chandigarh.
In June 2023, Hero MotoCorp revealed plans to invest up to Rs. 1,500 crore in developing premium bikes and EVs in India.
In May 2023, Maruti Suzuki India revealed plans to invest over Rs. 40,000 crore to double capacity by 2030.
In March 2023, the Central government sanctioned Rs. 800 crore million under FAME India Scheme Phase II to Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL), for setting up 7,432 public fast charging stations across the country.
In February 2023, German luxury car maker Audi India began local production of the Audi Q3 and Audi Q3 Sportback at the Skoda Auto Volkswagen India Private Limited (SAVWIPL) plant in Aurangabad.
In February 2023, Nissan and Renault revealed a plan to invest Rs. 4,800 crore in India over the next 3-5 years to expand their market share in passenger cars and electric vehicles.
In February 2022, a memorandum of understanding (MoU) was signed between the electric two-wheeler company Ather Energy and the Electric Supply Companies (ESCOMs) of Karnataka for setting up 1,000 fast charging stations across the state.
In November 2022, Maruti Suzuki India announced plans to spend nearly Rs. 7,000 crore on several projects this year, including the building of its new facility in Haryana and the introduction of new models.
In July 2022, TVS Motor lined up fresh investments of Rs. 1,000 crore in an EV push.
Two-wheeler EV maker HOP Electric Mobility, a diversified business venture of Rays Power Infra, is looking at investing RS 100 crore over the next two years to expand manufacturing capacity for its EVs.
In February 2022, 20 carmakers were chosen to receive production-linked incentives (PLI) as part of the government’s plan to increase local vehicle manufacturing and attract new investment. The 20 automobile companies have proposed a total investment of around Rs 45,000 crore.