Indian Automotive Sector Going Through Intense Transformation, Inclining Towards Electric Vehicles

Posted on: Sep-2017 | By: 9 Dimen | Automotive

The most lucrative Indian automobile has been valued at $100 Billion and is expected to grow more than the estimation in the upcoming period. The sector is under a serious transformation since last ten years.

Indian automobile sector opens the doors for the FDI in 1991 during the period of liberalization of country’s economy. Moving ahead it has been considered as a critical contributor for the government led “Make in India” program.

The tree of the automobile sector, which is conquering peaks in the global market, had its seed sown somewhere in the mid-80s when the Indian government collaborated with Suzuki to manufacture automobile for the common people. On the same grounds, in the same decade, Hero Group declared a partnership with Honda Motor Company to build motorcycles in masses, which is now discontinued.

Presently, including new entrants and existing players with the total of 35 OEMs, this sector has the average capacity of manufacturing around 25 Million vehicles yearly and is a sole source of employment for approximately 30 Million people. The domestic sector accounts over 7% of GDP in the country, holds 27% of the industrial GDP, and attributes 4.3% of overall exports.

India now has also engraved its name as the largest tractor manufacturer, sixth largest car maker, fifth largest heavy truck manufacturer, largest two-wheeler market, 8th largest commercial vehicle manufacturer, and second largest bus manufacturer.

The sector is anticipated to add the share of 12% to nation’s GDP and create more than 6.5 Crore surplus employment opportunities in the coming decade.
The Automobile Mission Plan foresees to push India into top 3 auto manufacturing nations around the globe projecting gross revenue of $300 Billion by 2026.

Indian industry experts are considering that India will be heading towards all-electric vehicle vision till 2030 and it has effectively started to follow the foot prints towards it. One of the prime moves will be the scrapping of fossil fuel-powered vehicles and replace them by green and clean vehicles.

However, government implementing various incentive-based and tax beneficial schemes to motivate the sales of electric and hybrid vehicles is expected to boost the growth of the automobile sector in India significantly.