RT team
India’s auto industry is on the cusp of a significant milestone, poised to swell to a $300 billion market by 2026. This surge is driven by increased income levels, urban expansion, and a growing middle class endowed with more purchasing power. In March 2024 alone, the industry produced 2,325,959 units, including Passenger Vehicles, Three-wheelers, Two-wheelers, and Quadricycles, demonstrating robust production capabilities.
For the fiscal year ending in March 2024, total production reached an impressive 284,347,742 units. This includes a dominant two-wheeler segment, underscoring India’s status as the world’s leading manufacturer of two-wheelers and tractors, and ranking third globally in heavy truck manufacturing and fourth in car production.
The sector’s growth is fueled by substantial foreign direct investment, which totaled about USD 35.40 billion from April 2000 to September 2023. Government initiatives have further bolstered this growth, with automobile exports contributing significantly to India’s GDP and employing approximately 19 million people directly and indirectly.
India is also navigating a shift towards electric vehicles (EVs), anticipated to become the third-largest EV market by 2025 with projected sales of 2.5 million vehicles. The automotive industry is not only embracing EVs but also adapting to changing consumer preferences for larger, more powerful vehicles across all segments.
Recent strategic moves such as Ola Electric’s IPO, record sales by Mercedes-Benz, and governmental incentives for clean technology vehicles underscore the dynamic potential of the sector. With the automotive aftermarket segment also expected to reach USD 32 billion by 2026, the industry’s trajectory promises substantial growth and innovation, positioning India as a key player in the global automotive landscape.
