The Indian Automotive Industry is the 4th largest in the world. Due to factors such as growth in the working population, increase in the disposable income of individuals and ready availability of various financing schemes, the demand for automotive products in both commercial and consumer segment has been continuously increasing. The sector witnessed a year on year growth rate of ~11.3% in FY 2017.

India has become a global destination for manufacturing of automobiles and support components which has also propelled the growth of ancillary automotive industry in India. With the changes in automotive regulations, safety and fuel efficiency have become a focus point of the industry.

With the ‘’Automotive Mission Plan’’, the government plans to put India in the league of top 3 countries in terms of manufacturing, engineering and export of vehicles and components. One of the key focus has been a shift towards the electric vehicles segment which has led to an increase in the demand for various components which were not being manufactured in India earlier. India’s popularity in the Automotive sector can be attributed to existing automobile clusters, availability of support industries, inexpensive skilled workforce and governmental support in terms of subsidies.

Growth Drivers

  • The demand for foreign vehicles in India has been increasing steadily which has helped channelize increasing investments in this sector.
  • Increase in the disposable incomes in Tier II, Tier III cities and rural areas, which would increase the demand for two wheelers, and low-cost consumer & commercial vehicles.
  • Doubling of custom duty from 7.5 % to 15% for engines, engine components, gearboxes, transmission shafts, drive axles, brakes, radiators, silencers and clutches is expected to boost local manufacturing of such items in India.

Key Players


  •  Mercedes-Benz
  •  BMW
  •  Hyundai
  •  Renault-Nissan
  •  Mitsubishi
  •  Suzuki
  •  VW
  •  Honda
  •  Ford


  • Tata (Jaguar)
  •  Bajaj Auto
  •  Mahindra & Mahindra
  •  Hero Motors
  •  Force Motors
  •  TVS Motors
  •  Eicher Motors
  •  Maruti Suzuki

Market Statistics

  • Automobile industry grew by ~11.3% in FY 2017 The Passenger Vehicle segment exhibited a growth rate of ~8.1%, Commercial Vehicle segment grew ~15.2% and two- wheeler market grew ~11.8% on a YoY basis.
  • Approximately, 24.97 million vehicles were sold in India during FY 2018
  • The Automotive Industry has attracted Foreign Direct Investment (FDI) worth ~USD 18.5 billion during between the years 2000-2017