Indian Automotive In 2023 Sector: Two-Wheelers and Passenger Vehicles Dominate

Indian Automotive

According to KPMG, the Indian automotive sector in 2023 ranked as the third-largest globally, producing 25.9 million units, trailing only China and the U.S. To reach the milestone, it will be essential to strengthen domestic manufacturing by encouraging strategic investments and partnerships, while also offering favorable policies and incentives to attract foreign companies to set up production facilities in India.

• The above graph suggests that the two-wheelers and passenger vehicles dominate the domestic Indian auto market. By both two-wheelers and passenger vehicles, with the share of 75.4% and 17.7% for the Indian automotive sector in 2023.
• The Indian automobile industry produced 2.7 crore vehicles across all segments in FY23, with a total value of US$108 billion. The passenger vehicle segment contributed 57% of the value (US$  60.92 billion). The industry employed 1.9 crore people. Significant electrification was noted in the two-wheelers and three-wheelers segments, and while India lags behind global EV leaders, as per IBEF.
• Tata Motors holds over 80% of Indian’s EV market share. Tata plans to launch 10 new EV models by 2027, aiming for EVs to constitute 25% of its sales. In 2021, Tata Motors raised $1 billion from TPG’s Rise Climate Fund at a valuation of about $9.1 billion for its EV division.
• Harsh Kadam - MD & CEO, Schaeffler India says that India’s the potential to become both a leading consumer and a global supplier of electric vehicles(EV) components.HE noted that the country’s vast domestic market and manufacturing capabilities position it well to capitalize on the growing demand for EVs. So, despite the challenges like raw material shortage and global economic uncertainties, the outlook for 2024 remains optimistic, driven by increased vehicle production and supportive government initiatives.