The Registrations of natural gas vehicles in India attained a value of 146,952.24 Units in 2020
The indicator recorded a historical growth (CAGR) of 20% 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 Indian automotive industry is expected to follow a strong growth trajectory during the forecast period. 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.
A key feature of the Indian market during the historical period was the Indian government’s sudden decision to announce demonetization. The economic alarm that was ignited as a consequence of the government’s actions ultimately struck the country’s new cars market, as the sale of cars hit a 16-year low in December 2016. Though sales recovered in 2018, it was on the back of heavy discounts in order to boost demand.
The COVID-19 pandemic had a significant impact on the automotive industry in 2020, which had a knock-on effect on the new cars market. Temporary shutdowns at manufacturing plants amid labour shortages and severe disruption in the supply chain, including a shortage of semiconductors, led to production declines. Meanwhile, consumer and business confidence remained depressed since its slump in the advent of the pandemic, leading to a decline in demand.
With economic activity gradually returning to normal since the second quarter of 2021, as the immunization of the population through vaccine programmes progressed, the automotive industry has shown signs of recovery. Production in the car manufacturing segment had already increased in the first three quarters of 2021 and it is expected to grow in full-year terms as consumers’ confidence is set to improve further as economic uncertainty recedes. Similarly, the truck manufacturing segment is also set to benefit from improved business confidence, with the recovery of economic activity to drive production growth.
The Indian new cars market is highly consolidated, with the four leading players, Suzuki, Tata, Hyundai, and Mahindra, expected to account for a combined more than two-thirds share of the sales volume in 2021. The leading players in this market are tapping into the growing demand for hybrid and electric vehicles, while alliances within the market are a common strategy. The COVID-19 pandemic halted production in many countries, as well as disrupting the supply chain; as such, the leading players were negatively impacted in 2020.
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