Did you know, India is the world’s 4th largest vehicle market

India is anticipated to be the world's third-largest automotive market in volume by 2030

The Auto Vehicle industry formed a total of 22.93 mn automobiles including Passenger Automobiles, Commercial Automobiles, Three Wheelers, Two Wheelers, and Quadricycles from April 2021 to March 2022.  India holds a very strong position in the international heavy vehicles field as it is the largest tractor producer, second-largest bus producer, and third-largest heavy truck producer in the world.

Currently, the auto industry contributes 7.1% of India's GDP and 49% of its manufacturing GDP.

The EV market is expected to grow at a CAGR of 49% between 2022-2030 and is expected to hit 10 mn-unit annual sales by 2030. The EV industry will create 50 mn direct and indirect jobs by 2030.

The market size of $50 bn for the financing of EVs in 2030 has been acknowledged—about 80% of the current size of India’s retail vehicle finance industry, worth $60 bn today.

India's passenger vehicle industry is expected to post a growth of 16% in FY23

India’s trucking market is expected to grow over 4x by 2050. The number of trucks is expected to more than quadruple, from 4 mn in 2022 to roughly 17 mn trucks by 2050

India’s Automotive Industry is worth more than $222 bn and contributes 8% of the country’s total export and accounts for 7.1% of India's GDP and is set to become the 3rd largest in the world by 2030.

Did you know, 100% FDI is allowed under Automatic route

The automobile sector has :

• 7.1% - Share in India's GDP
• 37 mn - Employment generated
• 40% - Share in global R&D
• 4.7% - Share of India's exports

World’s largest two-wheeler and three-wheeler manufacturer

World's second largest tractor and bus manufacturer

World’s third largest heavy truck manufacturer and fourth largest car manufacturer

   Growth Prospects

• Growing income - 3X increase in average household income from $6,393 in 2010 to $18,448 in 2020.
• Youngest Nation' by 2025 - India to become the youngest nation by 2025 with an average age of 25 years.
• Vehicle penetration - Expected to reach 72 vehicles per 1000 people by 2025.
• Expanding R&D hub - India accounts for 40% of the total $31 bn of global engineering and R&D spending. 8% of the country’s R&D expenditure is in the automotive sector.
• Atmanirbhar Bharat Abhiyaan - Self Reliant India - Special economic and comprehensive package of INR 20 lakh crores towards promoting manufacturing in India.

   Foreign Investments

• $33.53 Bn FDI inflow From April 2000 to March 2022

•  5.5% Share in FDI Inflow From April 2000 to March 2022

   Industry Trends

Transitioning towards Electric Vehicles

Govt. of India Has taken multiple steps in the last few years to foster the right policy environment to promote Electric Vehicles

Voluntary Vehicle Fleet Modernization Programme (V-VMP)

Offers tax benefits and discounts on replacing old vehicles with new ones

Bharat Stage VI norms by 2020

India aims to reduce its carbon footprint by 33-35% by 2030

Positive GST impact

Reduction in the overall cost structure of the Indian Automobile industry.

   Production Linked Incentive Scheme (PLI)

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. The PLI scheme (outlay of $ 3.5 Bn) for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determining sales of products manufactured in India from April 1, 2022, for a period of five consecutive years. The scheme was closed on 9th January 2022. Total of 95 applicants have been approved under this PLI scheme: 20 under Champion OEM and 75 under Component champion.

Scheme Outlay

INR 25,938 cr