H. Yoo
Research expert covering South Korea
Automotive industry in India - statistics & facts
Just 12 years after Karl Benz built the world’s first practical automobile, the first car rode on the Indian roads in 1897. However, it was not until more than half a century later that India began mass-producing motor vehicles domestically. Following the economic liberalization of the 1980s , driven by rising demands and freer markets, the automotive industry experienced exponential growth. Three decades later, India had emerged to be the third-largest automotive industry in the world.
Interestingly, the first mass-produced motor vehicle in India was a motorcycle, the Royal Enfield Bullet, manufactured by Enfield India starting in 1955. Easy on the pocket and versatile on Indian streets, two-wheelers dominate the country’s automotive production. This made India the largest producer of two-wheelers worldwide. Hero MotoCorp is the leading manufacturer of two-wheelers. On the other hand, Maruti Suzuki dominated the passenger vehicle market at over 40 percent. For commercial vehicles, Tata Motors led the way.
With the growing demand for vehicles driven by India’s burgeoning middle class and the industry's gradual shift toward sustainability, hybrid and battery electric vehicles are gaining market share in India. This has created opportunities for companies to challenge market leaders and disrupt the industry, particularly in the two-wheeler sector. India's automotive industry will become more dynamic in the future, and it could make a global impact.
Two-wheelers lead the way
From the mid of 1980s to the early 1990s, as the Indian government gradually loosened the regulations of the automotive industry, several foreign automakers entered the Indian market. Sustained economic development increased people’s purchasing power and steadily drove the country’s transportation demand. More roads have been built, and the number of vehicles has grown rapidly. The country produces two-wheelers, trucks, passenger cars, buses, three-wheelers etc., playing a crucial role in the economic growth, with roads being key to transportation.Interestingly, the first mass-produced motor vehicle in India was a motorcycle, the Royal Enfield Bullet, manufactured by Enfield India starting in 1955. Easy on the pocket and versatile on Indian streets, two-wheelers dominate the country’s automotive production. This made India the largest producer of two-wheelers worldwide. Hero MotoCorp is the leading manufacturer of two-wheelers. On the other hand, Maruti Suzuki dominated the passenger vehicle market at over 40 percent. For commercial vehicles, Tata Motors led the way.
Environmental challenges drive the rise of EVs
Decreasing air quality and increasing congestion have been a cause for concern in India, affecting the automotive industry. India has repeatedly been featured on the list of most traffic congested as well as most polluted cities in the world. Due to the increasing pressure from the public and environmental groups, the Indian government took several measures to resolve the issue. New emission standards were introduced nationwide in 2020, and tax cuts were offered for electric vehicles. Furthermore, the government has put forward several Production Linked Incentive (PLI) schemes for the automobile and auto components industry in order to boost manufacturing of Advanced Automotive Technology (AAT) products. As a result, electric vehicles (EVs) have become increasingly popular across the country.With the growing demand for vehicles driven by India’s burgeoning middle class and the industry's gradual shift toward sustainability, hybrid and battery electric vehicles are gaining market share in India. This has created opportunities for companies to challenge market leaders and disrupt the industry, particularly in the two-wheeler sector. India's automotive industry will become more dynamic in the future, and it could make a global impact.
