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The India automotive market size is forecast to increase by USD 53.3 billion, at a CAGR of 7.46% between 2023 and 2028. The market is witnessing significant growth, with key sectors including passenger cars, two wheelers, and three wheelers experiencing increased demand. Driving this growth are various factors, such as the expanding middle class population and the rising preference for personal mobility solutions. Additionally, the Indian government's initiatives, such as subsidies and the phased manufacturing proposal, are attracting automotive companies to invest in the country. Another trend influencing the market is the increasing focus on electric vehicles (EVs), with the establishment of public charging stations becoming more prevalent. The competitive landscape is intensifying as companies strive to meet the rising demand and differentiate themselves through product innovation and pricing strategies. The market is experiencing expansion, fueled by demographic shifts, government incentives, and the shift towards electric mobility. Key sectors, including passenger cars, two wheelers, and three wheelers, are benefiting from these trends, making India an attractive market for automotive companies.
The market is a significant contributor to the country's economy, encompassing the manufacturing, designing, and selling of various motor vehicles. This market consists of various segments, including two-wheelers, passenger cars, and three-wheelers. The two-wheeler segment in India is a major contributor to the automotive industry's growth. Fueled by the increasing urban population and the need for affordable transportation solutions, the demand for two-wheelers continues to rise. Petrol and diesel remain the primary fuel choices for two-wheelers in India, with gasoline being more popular in urban areas. The passenger cars and commercial vehicles segment in India is witnessing significant development, with a growing middle-class population and increasing disposable income. Passenger vehicles, including cars and compact SUVs, are gaining popularity due to their affordability and advanced features. Alternative fuel options, such as CNG or LPG, are also gaining traction in this segment as consumers seek eco-friendly mobility solutions. The three-wheeler segment in India is an essential part of the transport industry, catering to the last-mile connectivity needs of urban populations. Diesel remains the primary fuel choice for three-wheelers, but electric and hybrid vehicles are gaining popularity due to their environmental benefits and cost savings in the long run.
Further, the market is witnessing the adoption of connected automotive technology, including real-time navigation and remote diagnostics. These technologies enhance the driving experience and provide added convenience to consumers. The market is also witnessing the emergence of autonomous driving technology and electric vehicles (EVs). While the market for autonomous vehicles is still in its infancy, the demand for EVs is growing due to their environmental benefits and cost savings in the long run. In conclusion, the Indian automotive market is a dynamic and evolving industry, with various segments, including two-wheelers, passenger cars, and three-wheelers, witnessing significant growth. The market is being driven by factors such as urbanization, increasing disposable income, and the need for eco-friendly mobility solutions. The adoption of connected automotive technology and the emergence of autonomous driving technology and EVs are also shaping the future of the industry.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2017-2022 for the following segments.
The two-wheelers segment is estimated to witness significant growth during the forecast period. The market encompasses a substantial portion of passenger vehicles, with two-wheelers being a significant contributor to sales and manufacturing. The expanding Indian population, increasing urbanization, and rising disposable income are driving factors behind the consistent demand for these vehicles. Two-wheelers can be categorized into various models based on engine power, purpose, designs, and cost. Motorcycles and scooters represent the initial segmentation, with motorcycles being more powerful than scooters. Motorcycles typically have engines ranging from 150cc to 500cc, catering to those seeking more power and agility. Conversely, scooters, which are popular for their convenience and comfort, usually fall between 100cc and 150cc. The automotive industry in India continues to develop, with automakers producing vehicles that cater to the diverse needs and preferences of consumers. The transport and vehicle industries are experiencing growth, with new vehicle registrations increasing steadily. This trend is expected to continue due to the country's demographic shifts and economic development.
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The two-wheelers segment was valued at USD 50.50 billion in 2018 and showed a gradual increase during the forecast period.
Our market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing middle-class population is the key driver of the market. The market is witnessing significant growth due to the expanding economy and the rise of the middle class. As more individuals enter the middle-income bracket, their disposable income increases, enabling them to consider purchasing vehicles. This demographic shift has led to a notable uptick in the demand for passenger cars, as well as two-wheelers and three-wheelers.
Fuel options in India include diesel, petrol, gasoline, electric, CNG, and LPG. The automobile industry in India is experiencing a notable expansion, with various fuel types catering to diverse consumer preferences and financial capabilities. The availability of financing options has further facilitated the purchase of vehicles, making car ownership a reality for an increasing number of middle-class consumers. This trend is expected to continue, as the Indian economy continues to grow and the middle class expands.
The rise in demand for electric vehicles is the upcoming trend in the market. The market is experiencing a significant increase in the preference for electric vehicles (EVs), driven by a combination of government incentives, growing environmental consciousness, and technological advancements. The Indian government's initiatives, such as the FAME II scheme, which provides financial incentives to both buyers and manufacturers, have been pivotal in boosting the adoption of EVs. Additionally, the reduction in Goods and Services Tax (GST) on EVs has made them a more economical choice compared to conventional vehicles. Environmental concerns, including the reduction of air pollution and greenhouse gas emissions, are key factors fueling the demand for electric two-wheelers, passenger cars, and three-wheelers in India.
Further, automotive companies in India are responding to this trend by investing in the production of electric vehicles. The phased manufacturing proposal, which offers incentives to companies that manufacture EVs locally, has attracted several global players to set up manufacturing bases in India. The availability of public charging stations is also increasing, providing consumers with the necessary infrastructure to make the switch to electric vehicles. The Indian automotive industry is poised for a significant transformation, with electric vehicles set to play a major role in shaping its future.
Increasing competition among companies is a key challenge affecting market growth. The market has witnessed intense competition among companies, posing significant challenges. The automobile sector in India has experienced remarkable growth, attracting both domestic and international players vying for a larger market share. This competition is driven by the expanding Indian middle class, whose demand for vehicles is increasing. In response, companies are offering a diverse range of vehicles to cater to the evolving needs of consumers. Moreover, the Indian automotive industry is not just limited to urban markets; rural areas are also becoming significant contributors to the sector's growth. Corporations are expanding their reach to these markets, offering affordable vehicles and innovative financing options. The Indian automotive industry's growth is not limited to passenger transportation. Vehicle manufacturing for logistics and commercial applications is also on the rise.
Additionally, there is growing interest in electric vehicles, with companies investing in research and development to meet the country's emissions standards. India's automotive exports are also on the rise, making it an attractive market for international players. The Indian government's focus on infrastructure development and the implementation of favorable policies are further boosting the sector's growth. In conclusion, the Indian automotive market is a dynamic and competitive landscape, driven by the increasing demand from the middle class, corporate interest, and the government's supportive policies. Companies are responding by offering a diverse range of vehicles and innovative financing options to meet the changing needs of consumers. The sector's growth is not limited to passenger transportation but also includes commercial vehicles, logistics, and electric vehicles.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bajaj Auto Ltd. - The company offers a range of automotive offerings, including electric three wheelers such as RE E TEC 9.0, RE, and Maxima, as well as two wheelers like Pulsar, Dominar, and Avenger.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is a significant contributor to the country's economy, encompassing the manufacturing and sales of passenger cars, two-wheelers, and three-wheelers. The market caters to diverse consumer segments, with middle-class consumers being a major target. The industry employs various fuel types, including diesel, petrol, gasoline, CNG or LPG, and electric vehicles. The two-wheeler industry holds a substantial share in the market, while passenger cars and three-wheelers also witness steady growth. Corporate interest and rural markets are key areas of focus for automotive companies. Logistics and passenger transportation are significant applications of automobiles in India. Electric vehicles (EVs) and hybrid electric vehicles (HEVs) are gaining popularity due to environmental concerns and stricter emissions standards.
In addition, the government supports the EV sector with subsidies and the implementation of the phased manufacturing proposal. The development of autonomous vehicles, including driverless vehicles, is underway, with advancements in technologies such as Lidar, AI software, radar, cameras, real-time navigation, and remote diagnostics. International automakers are expanding their presence in India, introducing compact and mid-size SUVs to cater to the growing demand. The automotive industry's economic conditions are influenced by various factors, including economic conditions, ride-sharing services, and distribution networks. The sector is also addressing the challenges of battery production and infrastructure development for EVs. The transport industry and vehicle industry continue to evolve, with new vehicle registrations increasing year by year.
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Market Scope |
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Report Coverage |
Details |
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Page number |
153 |
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Base year |
2023 |
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Historic period |
2017-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.46% |
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Market Growth 2024-2028 |
USD 53.3 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.41 |
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Key companies profiled |
Bajaj Auto Ltd., Daimler Truck AG, Eicher Motors Ltd., Force Motors Ltd., Ford Motor Co., General Motors Co., Hero Motors Co., Hinduja Group Ltd., Hindustan Motors Ltd., Honda Motor Co. Ltd., Hyundai Motor Co., KIA CORP., Mahindra and Mahindra Ltd., Nissan Motor Co. Ltd., Piaggio and C. Spa, Renault SAS, Suzuki Motor Corp., Tata Motors Ltd., TVS Motor Co. Ltd., and Volkswagen AG |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
We can help! Our analysts can customize this market research report to meet your requirements
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Fuel Type
8 Market Segmentation by Distribution Channel
9 Customer Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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