Analysis of Automotive Industry in India in 2019


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The Automotive Industry in India is an ever-evolving industry that has experienced both rapid growth and a decline in sales. This is largely due to the fact that the automotive industry shares certain similarities with other large industries such as electrical and apparel industries.
Over a period of two decades, the Automotive industry in India has been driving its own growth through phases. With comparatively, a higher rate of economic growth index against global powers, India has become a hub of domestic and exports business.
The automotive industry in India is emerging as the world’s third-largest passenger-vehicle market. It is on the cusp of major changes and is moving to a new period. These days the various manufacturers of Tyres such as Apollo tyres, Yokohama Tyres, Pirelli Tyres, etc. are hitting the market at rapid speed.

Now, let’s put some light on Analysis of Automotive Industry in India-


The automotive sector contributes about 7.1% of India’s GDP. It contributes to 22% of the country’s manufacturing GDP. It is the world’s 6th largest automotive market. It is expected to become the world’s 3rd largest market by the next 3 years.
The domestic automotive production increased by 7.08% between 2013 and 2018.
29.07 million vehicles were manufactured in the country in 2018 including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle.
Domestic automotive sales increased by 7.01% between 2013 and 2018.
It contributes to 13% of excise revenue for the Government.
As per the Automotive Components Manufacturers Association of India (ACMA), following is the standing of Automotive Industry in India-
1) Largest tractor manufacturer

2) 2nd largest two-wheeler manufacturer

3) 2nd largest bus manufacturer

4) 4th largest heavy truck manufacturer

5) 6th largest car manufacturer

6) 8th largest commercial vehicle manufacturer


Commercial vehicles
The overall Commercial Vehicles segment grew by 19.94 per cent in 2018. Medium & Heavy Commercial Vehicles (M&HCVs) grew by 12.48 per cent and Light Commercial Vehicles grew by 25.42 per cent in 2018.

Passenger Vehicles
The Passenger Vehicles segment grew by 7.89 per cent. The sale of Passenger Cars, Utility Vehicle and Vans grew by 3.33 per cent, 20.97 per cent and 5.78 per cent respectively.

Three wheelers
Three Wheelers sales grew by 24.19 per cent in 2018. Passenger carrier sales registered a growth of 28.65%. Goods carrier sales witnessed a growth of 7.83%.

Two Wheelers sales grew by 14.80 per cent. Scooters segment grew by 19.90 per cent. Motorcycle segment registered a growth of 13.69 per cent. Mopeds declined by (-) 3.48 per cent.

•Automotive exports increased by 16.12 per cent.
•Two Wheelers Segments registered a growth of 20.29 per cent.
• Three wheeler segment grew by 40.13 per cent. while
• Passenger Vehicles declined by (-)1.51 per cent.
• Commercial vehicles declined by (-) 10.53 per cent.

Category 2017-18
Passenger Vehicles . 4010373
Commercial Vehicles 894551
Three Wheelers 1021911
Two Wheelers 23147057
Grand Total 2,90,73,892


Passenger Vehicles 13
Commercial Vehicles 3
Three Wheelers 3
Two Wheelers 81
Grand Total 100
Installed Capacity (In Million)
A. Four Wheelers 7.00
B. Two & Three Wheelers 27.56
C. Engines 1.02

India is surely the global leader in the automotive industry. It has shown tremendous progress in the growth rate of production, domestic sales and exports. It employs over 29 million people directly and indirectly. This provides very lucrative investment options to domestic as well as foreign investors.
Automakers are expected to invest $8-10 billion (Rs 51,600-64,500 crore) in India to set up factories and expand production in the country. The investment will span over a period of next three-fours years.’
-The Economic Times

At an R&D centre in Rohtak, Haryana, Maruti will be investing Rs 1,900 crore for its second phase of expansion.

To build its first manufacturing plant in India, South Korea’s second largest automotive manufacturer Kia Motors has invested around US$1.1 billion. The production is expected to begin in the second half of 2019 and they will produce approximately 3,00,000 units each year.

Hyundai Motors plans to invest $2 billion. It is aiming at producing one-million units in India by 2020-2021.

SAIC Motors plans to invest US$ 310 million in India.

The manufacturing capacity of Mercedes Benz has increased the manufacturing by 20,000 units per year. It is the highest for any luxury car manufacturer in India.

Honda Motors Company is planning to set up its third factory in India for launching hybrid and electric vehicles with the cost of Rs 9,200 crore (US$ 1.31 billion).

According to SIAM, the automotive industry in India is estimated to grow to Rs 16.16 – 18.18 lakh crore by 2026.

Automotive Mission Plan- It is a ten-year plan (2016-2026) also called AMP 2026. It aims at improving India’s global contribution, competitiveness, institutional structure and capability in the sector of Automotives. It seeks to communicate the Government and industry’s intent and objectives in respect of the Indian Automotive industry. Check out the core objectives:
1) AMP 2026 aims to propel the Automotive industry in India to be the engine of the “Make in India” programme, as it is amongst the foremost drivers of the Manufacturing sector.
2) AMP 2026 seeks to increase net exports of the Automotive industry in India to 35-40 per cent.
3) AMP 2026 aims to provide multiple options to the public for mobility by 2026. It seeks to provide safe and efficient mobility for every person.

Rapid urbanization, continued government support, fuel economy, increasing affordability of private vehicles and the development of India as a manufacturing hub can be termed as the major reasons. It also provides a strong supplier base to global counterparts. Thus it is serving both domestic demand and export opportunities.
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