8 Months agoIndia's auto industry, a strong pillar of industrial growth, is all set to become the world's 3rd largest auto market by 2020.
The Indian Automobile sector has been a strong pillar for industrial growth in India. According to the last released statistics from the Annual Survey of Industries, the automobile industry is responsible for 7.1% contribution to Indian GDP.
The sector has been growing at a strong pace with a CAGR of 6.01% from 2010-11 to 2015-16, with the highest growth shown by the two-wheeler market segment at 7.12% along with having the highest share of Indian Automobiles at 78.59%.1
CAGR 2010-11 to 2015-16: 2.74%
Share in 2015-16: 14.25%
CAGR 2010-11 to 2015-16: 0.57%
Share in 2015-16: 3.27%
CAGR 2010-11 to 2015-16: 3.16%
Share in 2015-16: 3.90%
India as an Automobile Export Hub
India is on its way to become one of the global leaders in Automobile manufacturing. This aspiration is turning into a reality with India becoming the nation with the highest growth in exports globally. As of FY 2014-15, around 31% of the small cars sold globally were manufactured in India.2
Export statistics for Indian Automobiles:
CAGR 2010-11 to 2015-16: 8.03%
Share (2015-16): 17.96%
CAGR 2010-11 to 2015-16: 6.55%
Share (2015-16): 2.79%
CAGR 2010-11 to 2015-16: 8.42%
Share in 2015-16: 11.11%
CAGR 2010-11 to 2015-16: 10.13%
Share in 2015-16: 68.14%
Source: Society of Indian Automobile Manufacturers
Key government initiatives:
- Government of India aims to make automobiles manufacturing the main driver of the ‘Make in India’ initiative, as it expects passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.
- In the Union Budget of 2015-16, the Government has announced to provide a credit of INR 850,000 crore (USD 124.71 Billion) to farmers, which is expected to boost the tractors segment sales.
- The government plans to promote eco-friendly cars in the country i.e. CNG based vehicles, hybrid vehicles and electric vehicles; and make mandatory of 5% ethanol blending in petrol.
- The government has formulated a Scheme for Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission 2020 to encourage the progressive induction of reliable, affordable and efficient electric and hybrid vehicles in the country.
The Indian automotive sector has the potential to generate up to USD 300 Billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12% to India’s Gross Domestic Product.3
1. Society of Indian Automobile Manufacturers
2. Society of Indian Automobile Manufacturers
3. Automotive Mission Plan 2016-26 prepared jointly by the Society of Indian Automobile Manufacturers (SIAM) and government