The Indian automobile industry primarily comprises of commercial vehicles, personal cars and three as well as two-wheelers. However, given the nature of the nation’s economy, the market is dominated by two-wheelers, which enjoy as much as 80% of the market share. Then comes passenger vehicles, which accounted for 3 million in number out of the total 25 million automobiles produced in the financial year 2017.
Pertaining to the nation’s huge population, the automobile industry of India is the largest in the world. More and more auto companies are now willing to explore the country’s rural markets, owing to the increased purchasing capacity of the people and the development of requisite infrastructure.
And while India is also an eminent exporter of automobiles, it is speculated that it will soon become a world leader on this front, that too as soon as the advent of the year 2020. In the past 17 years, the industry has attracted a Foreign Direct Investment of over $17 billion. (As per Department of Industrial Policy and Promotion). As a matter of fact, the export of passenger vehicles (cars) and commercial vehicles witnessed a tremendous growth, amounting to 16.20 percent and 4.99 percent respectively. However, the export of three and two wheeler vehicles was marred by a decline of more than 32 percent and close to 6 percent respectively.
Presently, the Indian market is also looking forward to the swift development of the electric car segment. While Mahindra and Mahindra Ltd. is the nation’s only electric automaker, government policies such as tax exemption, toll and parking waivers for electric mopeds and cars are likely to give way to more and more players exploring this segment. However, in comparison to their conventional counterparts, the demand for electric vehicles is way too low at present, barely crossing the 25,000 unit mark in FY-2017.
That being said, the future of Indian automobile industry looks more than just promising, and it is only a matter of time before India emerges as a world leader in this segment.