India's Automotive Sector - Where is it going?

India is trying to achieve a good position in Automobile sector. India is one of World’s largest auto industry with annual production of 25.31 million vehicles in FY17, significantly above US (17.5 million) and EU(12.6 million). In FY17, this sector directly contributes $97 billion to Indian economy ($58 billion to automotive sector and $39 billion to Automotive component sector). Total turnover of Indian automobile sector industry grew 3.6 times from $34 billion(2006) to $122 billion (2016) in just 10 years. In FY19, India is World’s 4th largest passenger vehicle maker with 4.06 million units assembled. It contributed 49% of manuacturing GDP, 7% of total GDP and employs 37 million people directly and indirectly. Among the sold vehicles in India the top 5 are Maruti Suzuki (50.6%), Hyundai (17.4%), Mahindra (7.5%), Tata Motors (5.21%) and Honda (4.6%). India is World's largest 2 wheeler market. Indian motorbike OEMs such as Hero Motocorp (35.9%), TVS (14.8%), Bajaj (12%) and Royal Enfield (3.8%) accounted 67% of market share in FY19, 26.1% accounted by Honda. In 2000-2020, Indian 2-wheeler OEMs filed 1643 patent applications and 478 were granted. TVS filed with 1334 applications and 425 were granted. Among bikes sold Hero Motocorp leads sub 125cc segment with 65% of share. India is also largest manufacturers of Tractors with 0.9 million units sold in FY19 (approx. 1/3rd of Global). In FY20, India exported 677 thousand passenger vehicles, 61 thousand commercial vehicles, 502 thousand units of 3-wheelers and 3.52 million units of 2-wheelers (total 4.76 million units). More than 17 million motorbikes and scooters sold in India in FY20. In FY19, the motorcycle exported by India is worth $2 billion (6.8% of global). The total turnover of automotive component industry in India is $51 billion in FY20. In 2018, India exported motorcycle worth $504.70 million in Latin America. Colombia holds 35% worth $198.4 million. In June 2020, Royal Enfield Interceptor 650 became UK’s highest selling motorbike. Bajaj motors has 48% share in Europe’s motorcycle market leader KTM. TVS acquired Britain’s Norton motorcycles in April 2020. In 2004, Tata motors acquired South Korea’s Daewoo commercial vehicle. In 2008, they acquired Britain’s iconic Jaguar LandRover from Ford for $2.3 billion. In 2015, Mahindra acquired Pininfarina’s 77% stake at ₹1240 crore. They later launched Pininfarina Battista Hyper EV. Ashok Leyland, headquartered in Chennai, is the second-largest manufacturer of commercial vehicles in India, the third-largest manufacturer of buses in the world. India is also home to 5 out of World’s top 30 tyre makers such as Apollo(#14), MRF(#15), JK(#23), CEAT(#27) and BKT(#30). In FY18, Indian tyre market is ₹59500crore or approx. 8.6 billion USD.

Indian Automotive industry invested ₹40 thousand crore for BS-6 compliance as stated by Automotive Component Manufacturers Association of India (ACMA). 40-50% of that investment goes to automotive component. India's export in Auto component witnessed a CAGR of 10.9% from USD 10.3 billion in FY14 to USD 15.6 billion in FY19.

India sold approx 24 thousand Electric 2-wheelers in FY20. Big names in this sector are Okinawa (HQ: Gurgaon), Hero Electric, Ather Energy (HQ: Bengaluru), Ampere and Revolt.

India's automobile manufacturing share was 0.14% of global share in 1950, that rose to 1.37% in 2000 and grew further to 5.41% in 2018. India's auto manufacturing grew 6.5 times in past 18 years. World auto manufacturing grew 3.25 times where as Indian manufacturing grew 67.66 times in past 50 years.



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