The Registrations of Diesel vehicles in India attained a value of 416,364.68 Units in 2020
The indicator recorded a historical decline (CAGR) of 29% between 2017 to 2020, and is expected to grow by...
GlobalData projects the indicator to grow at a CAGR of...
Automotive Industry in India
The value of the Indian automotive manufacturing industry is expected to grow in 2021, recovering from the sharp decline in production a year earlier due to the COVID-19 pandemic. The industry is set to follow a strong growth trajectory during the forecast period given that the macroeconomic environment will continue to improve.
The COVID-19 pandemic had a significant impact on the automotive industry in 2020. Temporary shutdowns at manufacturing plants amid labour shortages and severe disruption in the supply chain - including a shortage of semiconductors - which persisted throughout the year, resulting in the decline of production volume. Meanwhile, consumer and business confidence remained depressed since its slump in the advent of the pandemic. With regards to car and motorcycle manufacturing, the cutback in the use of cars following containment measures also reduced consumers’ demand for new vehicles.
The Indian new cars market is expected to follow a strong growth trajectory in value and volume terms in 2021 and 2022. Pent-up demand will drive growth, while the improving macroeconomic environment given that the pandemic is set to be coming to an end will support spending over the coming years.
The automotive manufacturing industry in India is largely made up of motorcycle production. The industry is dominated by large, multinational manufacturers including Hero, Honda, TVS, and Bajaj. Competition in the motorcycles segment has intensified, not only by existing manufacturers but also by emerging manufacturers. The market’s landscape continues to change rapidly with players facing tighter environmental regulations and advancing technologies. The high capital requirements in order to achieve a viable manufacturing scale, and the existence of incumbents with strong brands, deter new entrants. Regulation is also very important in this market in regards to taxation and the costs of compliance with emission standards, as it can create market distortions.
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