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Future of Automotive in India

Report Code AT 9306
Published in Jan, 2025, By MarketsandMarkets™
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Future of Automotive in India by Vehicle Type (PV, CV, 2W, 3W), PV by Body Type (Hatchback, Sedan, SUV, MPV), Propulsion Type (ICE, BEV) - Forecast to 2030

 

Overview

The passenger vehicle sales in India were 4.1 million units in 2023 and are expected to reach 6.0 million units in 2030, registering a CAGR of 5.6% between 2024 and 2030. India’s automotive market (PV+CV) will likely reach 7.5 million units in 2030, from 5.1 million units in 2023, at a CAGR of 5.7%. While internal combustion engine (ICE) vehicles held the major share, battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) are expected to grow rapidly during the forecast period. Dedicated to achieving zero emission targets, OEMs worldwide plan to invest in new production facilities, adding 4 million more vehicles to existing production capacity by 2030. Nine new manufacturing plants of various OEMs are also expected to commence by 2030. Hyundai (South Korea), Kia (South Korea), Toyota (Japan), Maruti (India/Japan), Tata Motors (India), and others have invested in new manufacturing facilities, especially in producing their upcoming electric vehicles (EV) models. The government of India has further encouraged OEMs to diversify the EV component and battery supply chain by manufacturing systems and sub-systems locally in order to de-risk possible supply chain disruptions of raw materials.

Future of Automotive in India

Attractive Opportunities in the Future of Automotive in India

INDIA

The Indian automotive market is mainly driven by an emphasis on providing better value-for-money products, with a strong focus on safety, efficiency, and connectivity features.

OEMs are focusing on making their EV offerings more attractive to customers in terms of price by offering battery as a service or by providing features as a service on demand.

OEMs are collaborating to develop various in-house software capabilities to offer connected features on subscription-based models.

Market growth can also be attributed to the fast-increasing middle-class population and high-net-worth individuals.

Indian automotive sales are driven by rising demand for hybrid electric vehicles, CNG, and pure electric vehicles.

Global Future of Automotive in India Dynamics

Driver: Consistent growth in the economy and increasing middle-class population

India’s automobile industry is experiencing significant growth, driven by a flourishing economy and an expanding middle class. As disposable incomes rise, more people will have the financial means to afford personal vehicles by 2030. This growing middle class is increasingly seeking better mobility and lifestyle options, leading to a higher demand for cars, two-wheelers, and commercial vehicles. Urbanization and infrastructure development are also key factors that support this industry, as they create a higher need for personal transportation and enhance opportunities for logistics and commercial vehicles. The rising affluence within the middle class will further boost this growth. Overall, the expansion of the Indian automotive industry is closely linked to the improvement of the economy and the increasing purchasing power of its population. This trend indicates that personal vehicle affordability will extend to more individuals, reflecting a broader aspiration for enhanced mobility and lifestyle choices.

Restraint: Fluctuating prices of vehicles and fossil fuel

Due to ongoing geopolitical unrest worldwide, the manufacturing of vehicle components and fuel prices have risen. The instability in the Middle East and the conflict between Ukraine and Russia have disrupted the trade of oil & gas and the manufacturing of vehicles. Ukraine, Russia, and the Middle East are the largest producers of global oil. Additionally, the Middle East is a critical region for global trade and energy supplies, and its ongoing instabilities have caused fluctuations in the supply and prices of commodities that pass through the region. If these issues persist, they may put pressure on global crude oil prices, which may impact the overall prices of vehicles and the total ownership costs of vehicles.

 

Opportunity: Rise of premiumization and connected car features

Key trends observed in top-trim and luxury vehicles include larger screen consoles for front occupants, increased ADAS-based control features, additional luxury and control enhancements for rear-seat passengers, and improved overall seat comfort. These features are proving to be a recurring revenue stream for OEMs as they are mainly offered on subscription-based models, with the first few years being free. As a service-based model, they are enabled in the vehicle telematics systems, which are central to all connected cars. Hence, the rise in sales of connected cars is expected to be one of the major drivers of premiumization in the Indian market.

Challenge: Consolidation and disruptions in supply chain

A large part of the electronics and EV components supply chain is consolidated within a few major countries. This makes local suppliers susceptible to cost pressures in case of supply chain disruptions. Although supply chain diversification and de-risking are underway and expected to make steady progress by 2030 due to the Production Linked Incentive (PLI) scheme in the automotive industry, consolidation of supply chains is expected to be a significant challenge until 2030. In light of this, it is crucial for India to promote localization of parts. To support this goal, the government has launched various programs and incentives under the PLI scheme for OEMs to produce their parts and components domestically. The government is also backing the establishment of three silicon chip manufacturing plants in the country, with two located in Gujarat and one in Assam, which will serve the automotive industry.

Global Future of Automotive in India Ecosystem Analysis

Top Companies in Future of Automotive in India

North America to Account for Largest Market Size During Forecast Period

LARGEST MARKET IN 2024- 2029
CANADA FASTEST GROWING MARKET IN THE REGION
Future of Automotive in India by region

Recent Developments of Web Content Management (WCM) Market

  • In December 2024, Mahindra launched two BEV models, i.e., BE.6E and XEV 9E, for Indian markets and is expected to launch them for global markets soon.
  • In August 2024, Tata Motors launched its Tata Curvv model in all powertrain options available, i.e., ICE and BEV.
  • In December 2024, major OEMs such as Tata Motors and Mahindra got manufacturing incentives worth INR 246 crore under the PLI scheme.
  • In November 2024, Suzuki unveiled its first electric vehicle, e-vitara, for global markets.

Key Market Players

List of Top Future of Automotive in India Companies

The Future of Automotive in India is dominated by a few major players that have a wide regional presence. The major players in the Future of Automotive in India are

  • Maruti Suzuki
  • Hyundai
  • TATA Motors
  • Mahindra and Mahindra
  • Kia
  • Toyota
  • Volkswagen
  • Honda

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Scope of the Report

Report Attribute Details
Market size available for years 2023–2030
Forecast units Volume (Million Units)
Segments Covered Vehicle Type, Propulsion Type, and Body type.
Regions covered India

 

Key Questions Addressed by the Report

What is the current size of the Indian automotive market?
India’s automotive market (PV+CV) is expected to grow from 5.1 million units in 2023 to 7.5 million units in 2030, registering a CAGR of 5.7%.
What driving factors impact the future of automotive in India?
The factors impacting the Indian automotive market are customer preference for hybrid electric vehicles, increased sales of advanced safety features, rapid integration of connectivity, extensive use of lightweight and advanced materials and innovative finishes, and advancements in manufacturing processes.
What are the new market trends impacting the growth of the automotive market?
Improvements in ADAS and connected features and a rise in used car sales are major trends affecting the growth of this market.
What are the upcoming trends in the electric passenger vehicle market?
The upcoming trends in the electric passenger vehicle market include a significant increase in hybrid electric vehicle sales, substantial advancements in battery pack capacity and driving ranges, and the implementation of important technologies such as 5G and generative AI.
What are the new trends in the used car and connected car markets?
Used car sales are expected to grow at a significant rate due to better value-for-money opportunities provided by the product and dealers compared to buying an entirely new car. In terms of connected cars, EVs are being factory-fitted with embedded telematics systems, which makes them a more attractive product compared to ICEs, where connected features are added at the mid and top-end trims of the model.

 

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Table of Contents

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TITLE
PAGE NO
EXECUTIVE SUMMARY
1
STUDY OBJECTIVES, METHODOLOGY, SCOPE, AND DEFINITION
2
INDIAN AUTOMOTIVE MARKET OVERVIEW
3
  • 3.1 INDIAN AUTOMOTIVE (PV+CV) MARKET AND GDP GROWTH
  • 3.2 INDIAN AUTOMOTIVE (PV) MARKET: GLOBAL POSITION
  • 3.3 INDIAN AUTOMOTIVE (PV) MARKET: MOTORIZATION RATE
  • 3.4 INDIAN AUTOMOTIVE MARKET: FUTURE OUTLOOK
  • 3.5 INDIAN AUTOMOTIVE MARKET: PASSENGER AND COMMERCIAL VEHICLE PARC
  • 3.6 INDIAN AUTOMOTIVE MARKET: KEY TRENDS AND GROWTH DRIVERS
INDIAN PASSENGER VEHICLE MARKET
4
  • 4.1 INDIAN PASSENGER VEHICLE MARKET: SIZE AND FORECAST BY SEGMENT AND POWERTRAIN AND KEY TRENDS
  • 4.2 INDIAN PASSENGER VEHICLE MARKET: KEY PLAYERS’ SHARES AND SALES SPLIT BY BODY TYPE AND POWERTRAIN
  • 4.3 INDIAN PASSENGER VEHICLE MARKET: KEY PLAYERS’ SEGMENTAL SHARE
  • 4.4 INDIAN PASSENGER VEHICLE MARKET: SALES BY STATE
  • 4.5 INDIA ELECTRIC PASSENGER VEHICLE MARKET: TIPPING POINT
  • 4.6 INDIAN PASSENGER VEHICLE MARKET: CONNECTED CARS
  • 4.7 INDIAN PASSENGER VEHICLE MARKET: ADVANCED DRIVER ASSISTANCE SYSTEM (ADAS)
  • 4.8 INDIAN AUTOMOTIVE AFTERMARKET
  • 4.9 INDIAN PASSENGER VEHICLE AFTERMARKET: ECOSYSTEM OVERVIEW
INDIAN AUTOMOTIVE MARKET: OTHER VEHICLE SEGMENTS
5
  • 5.1 INDIAN COMMERCIAL VEHICLE MARKET: SIZE AND FORECAST BY SEGMENT AND POWERTRAIN AND KEY TRENDS
  • 5.2 INDIAN TWO-WHEELER MARKET: SIZE AND FORECAST BY SEGMENT AND POWERTRAIN AND KEY TRENDS
  • 5.3 INDIAN THREE-WHEELER MARKET: SIZE AND FORECAST BY SEGMENT AND POWERTRAIN AND KEY TRENDS
INDIAN AUTOMOTIVE MARKET: LEGISLATION ANALYSIS
6
  • 6.1 INDIAN AUTOMOTIVE MARKET LEGISLATION ANALYSIS: EXISTING AND UPCOMING POLICIES
  • 6.2 INDIAN AUTOMOTIVE MARKET LEGISLATION ANALYSIS: PRODUCTION LINKED INCENTIVE (PLI) SCHEME
  • 6.3 INDIAN AUTOMOTIVE MARKET LEGISLATION ANALYSIS: BHARAT STAGE-7 (BS7)
INDIAN AUTOMOTIVE MARKET: HIGH GROWTH AREAS
7
  • 7.1 INDIAN AUTOMOTIVE MARKET: KEY GROWTH SEGMENTS
  • 7.2 HIGH GROWTH AREA #1: ELECTRIFICATION
  • 7.3 HIGH GROWTH AREA #2: SUV AND E-SUV
  • 7.4 HIGH GROWTH AREA #3: USED CAR SALES
  • 7.5 HIGH GROWTH AREA #4: INDIA AS CHAUFFEUR CAPITAL
  • 7.6 HIGH GROWTH AREA #5: KEY INFOTAINMENT AND CONVENIENCE TRENDS
  • 7.7 HIGH GROWTH AREA #6: EVOLUTION OF E-COMMERCE IN AFTERMARKET
APPENDIX
8

The future of automotive in India study involved analyzing the recent developments, trends, and performance of the players in the Indian automobile industry in 2023, along with the projections for 2030. The analysis was based on the sales volume of passenger, commercial, 3W, and 2W in India. The study also analyzes the major milestones in the automotive industry across vehicle connectivity, electrification, used car sales, and other critical aspects in 2023—exhaustive secondary research collected information on the market, peer, and parent markets. The next step was to validate these findings and assumptions and size them with industry experts across value chains through primary research. The bottom-up approach was employed to estimate the complete market size regarding vehicle sales for the segments considered. Thereafter, market breakdown and data triangulation were used to estimate the market size of segments and subsegments.

Secondary Research

The secondary sources referred for this research study include automotive OEMs, Tier I/II companies, and publications from government sources, automotive associations & databases [such as country-level automotive associations and organizations, Society of Indian Automotive Manufacturers (SIAM), Federation of Automotive Dealer Associations (FADA), Ministry of Road, Transports and Highway of India, International Energy Agency (IEA), Organization Internationale des Constructeurs d’Automobiles (OICA), European Automobile Manufacturers Association (ACEA), MarkLines and others]; corporate filings (annual reports, investor presentations, and financial statements); and trade, business, and automotive associations. Secondary data has been collected and analyzed to determine the overall sales volume, further validated through primary research.

Primary Research

Extensive primary research was conducted after understanding the future of automotive in India through secondary research. Primary research was done to understand and validate the findings on the automotive industry's performance in 2023 and validate the projections made for 2030.

Several primary interviews have been conducted with market experts from both the demand (OEMs/vehicle manufacturers) side. Approximately 80% of the experts involved in primary interviews have been from the demand side, and 20% have been from the industry's supply side. Primary data has been collected through questionnaires, emails, and telephonic interviews. Several primary interviews have been conducted from various departments within organizations, such as sales, operations, and administration, to provide a holistic viewpoint in the report.

After interacting with industry participants, some brief sessions have been conducted with experienced independent consultants to reinforce the findings from the primary interviews. This, along with the opinions of the in-house subject matter experts, has led to the findings delineated in the rest of this report.

To know about the assumptions considered for the study, download the pdf brochure

Market Size Estimation

The top-down approach was used to estimate and validate the Indian passenger vehicle sales volume by body type and powertrain. This approach was also used to identify the sales of various subsegments in the market. The research methodology used to estimate the market includes the following:

Future of Automotive in India : Top-Down and Bottom-Up Approach

Future of Automotive in India Top Down and Bottom Up Approach

Market Definition

The future of automotive in India 2030 includes an analysis of the key trends to impact the Indian automotive industry in 2030. The trends include electrification, rise in SUVs and E-SUVs sales, an increase in used car sales, India as Chauffeur capital of world, and others. The report also focuses on the developments in the automotive industry in 2024.

Stakeholders

  • Automobile Organizations/Associations
  • Automotive OEMs
  • Automotive System Manufacturers
  • Automotive Electronics Manufacturers
  • Automotive Technology Providers
  • Aftermarket Players
  • Country-specific Automotive Associations
  • Society of Indian Automotive Manufacturers (SIAM),
  • EV Component Manufacturers
  • EV Charging Infrastructure Companies
  • Authorized/Independent Aftermarket Players
  • Automotive TechGovernment & Research Organizations
  • Raw Material Suppliers for the Automotive Industry
  • Software Providers
  • Traders, Distributors, and Suppliers of Automotive Components

Report Objectives

  • To analyze the passenger vehicle, CV, 2W, 3W market performance in 2023-2030
  • To provide key developments achieved in 2023.
  • To identify the trends that are likely to impact the market in 2030.
  • To identify major growth segments and opportunities for 2030.
  • To project and forecast the light vehicle sales from 2024-2030
  • To track and analyze competitive developments such as deals (joint ventures, mergers & acquisitions, partnerships, collaborations), product developments, and other activities carried out by key industry participants.

 

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