The Rise of the Automobile Industry in India: A Complete Guide.

The Indian automobile industry is a good index of how well the economy is doing basically, as the automobile sector plays a vital role in macroeconomic expansion , technological advancement as well.

** Automobile meaning**

A passenger vehicle intended to be driven on common streets and normally having four wheels, fuel or diesel gas powered motor.

Automotive industry, All association and activities related to the production of motor vehicles, including most parts,

for example, engine and body design, development, production, marketing, sales, repair, and conversion but excluding tires, batteries and fuel. It is one of the biggest industries in the world in terms of revenue generation and job creation.

Importance of the Automobile Industry in the Indian Economy?

One of the main forces behind India's economic growth is the Automobile Industry, which produces both vehicles and the parts .

The automotive industry is one of the largest employment generators not only in India but globally. In addition to creation of direct jobs in car manufacturing, it creates many more jobs in ancillary manufacturing sectors.

Statistics show the industry accounts for 6.4% of the country's GDP and generates more than 80 lakh direct employment. The domestic market has a thriving automobile industry with several major global player. The auto industry contributes about 49 percent to India's manufacturing GDP.

The most important success factors in the automotive sector consist of effective management, ecology and innovation.

Why are automobile industries growing in India?

The $222 billion automobile industry is expected to reach $300 billion by 2026.

India is a globally recognized automobile manufacturing hub due to low cost of production. Cheap labour, good transportation system, low cost of raw materials, better power supply are the main driving factors of the manufacturing industry. India is the 4th largest automobile producer in the world, with an annual average of over 4 million motor vehicles.

A total of 4.5 million vehicles were sold in the country in the year 2019 and the number has declined sharply around 3% in 2020. But, in 2021, the number of vehicles production is increased by around 30% as compare to 2020. Hence, considering the increasing demand, the reproduction of vehicles are expected to increase during the forecast period.

The domestic automotive industry is expected to grow high in 2023-24, according to rating agency ICRA. As per their report, demand of passenger vehicle is expected to grow by 6-9 percent, commercial vehicles by 7-10 percent, two-wheelers by 6-9 percent and tractors by 4-6 percent in FY24.

Major players in the passenger car segment are Maruti Suzuki, Tata Motors, Hyundai Motor Company, Mahindra and Mahindra, Toyota Kirloskar India, Kia India Private Limited, and others. Players in the two-wheeler section are Hero Moto Corp.,Honda, TVS, Bajaj, Royal Enfield, Suzuki and others.

Who are the leading Automobile Industries in India?

India enjoys an exceptional position in the global heavy vehicle market as it is the world's highest tractor manufacturer, second highest bus manufacturer and third largest heavy truck manufacturer.

Top Automobile Companies in India are based on its Sales Volume.

1.Maruti Suzuki:

Maruti Suzuki is the market leader in the passenger automobile sector in India. Established in 1982 as a joint venture (JV) between the Government of India and Suzuki Motor Corporation (SMC), the company has now dominated over 40% of the local market. No wonder it takes over the top position in the list of most prominent automobile manufacturers in India.

Maruti Suzuki in numbers (2022)

Sales – 15,76,025 units (up 15.48% y/y)

Revenue – INR 88,296 crore.

Employees – 16,025

2. Hyundai:

Next in the list of largest automobile companies in India is Hyundai. Hyundai entered in the domestic market in the year 1996. The Korean giant made its debut with its Santro small car and since then the company has never been looking back. Today, the company offers eye catching models hatchbacks, SUVs, sedans and even electric cars at competitive prices. It has a market share of 14.5% in passenger car sales in India in 2022.

Hyundai India in numbers (2022)

Sales – 5,52,511 units (up 9.40% y/y)

Revenue – INR 47,043 crore

Employees – 10,000

3. Tata Motors :-

Tata Motors is among the best Indigenous Indian car

companies.

It is one of the leading automobile companies in India (as per passenger vehicle sales volume) with a market share of 13.9% in 2022. Formerly known as Tata Engineering and Locomotive Company Ltd (TELCO).

Tata Motors in numbers (2022)

Sales – 5,26,798 units (up 59.07% y/y)

Revenue – INR 47,263.68 crore

Employees – 50,837

4.Mahindra & Mahindra (M&M).:

Mahindra & Mahindra is among the most dominating automobile manufacturers in India. M&M is an indigenous automaker. Originally a farm tractor manufacturer, M&M has a reputation for its rugged vehicles.

M&M in numbers (2022)

Sales – 3,35,088 units (up 66.14% y/y)

Revenue – INR 27,038.82 crore

Employees – 100001+

5. Renault Motors:

In the history of Indian Automobile Industry

Renault is the only French company in this list. It penetrated the Indian market in 2005, through a JV with M&M, and its first model in the domestic market was the Renault Logan.

Renault in numbers (2022)

Sales – 81,042 units (down 15.47% y/y)

Revenue – INR 500+ crore

Employees – 10,000+

6.Toyota Kirloskar India.

Japanese auto major Toyota is represented in India through a joint venture with the auto giant Kirloskar. The JV was established in 1997 and since then it has become one of the most prominent automobile manufacturers in India.

Toyota Kirloskar in numbers (2022)

Sales – 1,60,357 units (up 22.65% y/y)

Revenue – INR 19,563 crore

Net Profit – INR 518.8 crore

Employees – 7,000

7. Honda Cars India.

Honda the Japanese car manufacturers penetrate into the Indian market in the year 1995. It has also started its operations in the same year. It is now a household name in the Indian automobile sector.

Honda India in numbers (2022)

Sales – 95,022 units (up 6.61% y/y)

Revenue – INR 500+ crore

Employees – 4,765

8. Kia India Private Limited:

Kia India Private Limited is a subsidiary of Kia Motors for its operations in India. It has started production in India in the year 2019.Globally, Kia is a subsidiary of Hyundai and thus, it gains a lot of market intelligence and local expertise when it decides to set up an outlet in the domestic market.

Kia India in numbers (2022)

Sales – 2,54,556 units (up 40.19% y/y)

Revenue – INR 500+ crore

Employees – 1,000+

9. MG Motor India.

MG Motor is the only Chinese automaker among the leading automobile companies in India. The company was laid its foundation in 2017 and started production and sales in 2019.

MG Motor in numbers (2022)

Sales – 48,063 units (up 19.34%y/y)

Revenue – INR 500+ crore

Employees – 3,000+

CONCLUSION:

India's automotive industry has made 

a lot of progress but it can do more to reach its full potential: farsighted and favourable policy interference, building infrastructure, investing in technology and developing a healthy and viable automotive ecosystem. It takes into account, the above list of India's bigger automobile companies is based on the annual sales volume of 2022. Because markets are dynamic, the market position of these automobiles may change. India's three largest automobile companies control nearly 70% of passenger car sales.

FAQ

Where does India's automobile industry stand globally?

By 2026, India will be the world's third largest automobile market, surpassing Japan and Germany in terms of sales volume.

Which is the largest automobile company in India?

Based on total sales volume in 2022, Maruti Suzuki leads the largest automobile companies in India.