In the automotive industry scenario worldwide, India is bracing itself for unprecedented growth in the coming years. With the currently ongoing market trends & the regulation of Indian business policies, the future of the automotive industry in India looks awesomely promising! It’s a great time for OEM and component manufacturers in the country to aspire for a global standing.
According to reports, India is on its way to become the world’s 5th largest economy by 2019 and would amount to USD 4.7 trillion worth economy by 2023. This positivity in the air can be emanating from the rapidly growing consumer class, expanding infrastructure and the ease of doing business in India. The Indian automotive industry became the 4th largest in the world in 2017 with sales increasing 9.5% year-on-year to 4 million units (this is excluding two-wheelers) and it was the 7th largest manufacturer of commercial vehicles the same year. This is also a great time for every industrial city in India as more and more automotive manufacturers are mushrooming in the landscape. All these factors are set to drive the automotive industry in the forward direction.
The Indian automotive industry is already leading the world in many segments viz. two-wheelers, segment A cars, and tractors. It is expected that vehicle sales in India would multiply around threefold from 26 million to 76 million by 2026. Several initiatives by the Indian govt. and the major auto players in the Indian market are expected to join hands and make India a leader in the two-wheeler and four-wheeler market in the world by 2020. This is a green flag for the Indian automotive components industry to double the contribution to manufacturing GDP with a four-fold growth in size and a six-fold growth in exports. If you are looking for an industrial land for lease, now is the time to look towards India.
Trends in the automotive industry
The future of the auto OEM and auto component industry is dependent on multiple trends and ongoing policies. The quest lies in understanding the opportunities that are created by these trends and how the automotive industry can be prepared to accrue benefits from them. The key trends defining the automotive industry include the following:
- Macroeconomic and Demographic trends: India is undergoing rapid urbanization which means that 500 million will move to the cities by 2030. Add to it the rising economies of the around 60 million consumer class by 2025. More and more people will be employed and capable of spending on four wheelers. Mini cars and hatchback have been consistent breadwinners for the automobile industry in India, with a share of around 50 percent and growth of 6 to 7 percent between 2014 and 2017. Major growth will come from SUVs, sedans and luxury vehicles.
- Government initiatives: The government seems to be working towards long term growth in the automotive industry while reducing dependency on oil as fuel through the automotive mission plan and the likes. The govt seeks to uplift the local emission standards from BS-4 to BS-6.
- Global manufacturing hub: India ranks 30th among the list of top 100 global manufacturing hubs. This can be attributed to the ‘Make in India’ initiative by the govt. India has improved on 9 out of 10 parameters. One of the leading industrial land in Pune reportedly saw a rise of 11% in investment from multinational companies in the last 4 years.
Many companies in the automotive sector are leveraging this wave of positivity and looking at India as a hub for low-cost, high-quality products. Till then, India slowly but steadily gears up to become a world leader in manufacturing.
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