As per MRFR analysis, the India Automotive OEM Market Size was estimated at 3.39 (USD Billion) in 2023. The India Automotive OEM Market Industry is expected to grow from 3.8(USD Billion) in 2024 to 6.5 (USD Billion) by 2035. The India Automotive OEM Market CAGR (growth rate) is expected to be around 5.001% during the forecast period (2025 - 2035).
The India Automotive OEM market is witnessing significant trends driven by changing consumer preferences and regulatory adjustments. One key market driver is the push for electric vehicles (EVs), fueled by government initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles scheme and incentives to promote cleaner technologies. This shift is encouraging OEMs to innovate and collaborate with technology firms to develop sustainable solutions.
Additionally, the demand for connected and smart vehicles is on the rise as consumers seek enhanced safety and convenience features, reflecting a global trend that has also taken root in India.Indian auto markets straight up need to look into the rise of mobility as a service (MaaS). With more people moving into cities, as well as the emerging middle class, there is an opportunity for ride-sharing and subscription-based services.
By embracing change, OEMs can meet the needs of consumers. In addition, the government’s attention to initiatives like ‘Make in India’ to support such perks as improving ecosystem infrastructure fosters local production and is good news for OEMs in terms of cost and supply chaos. Nowadays, with digitalization booming, many manufacturers incorporate new techniques of data-driven analytics for optimized services.
The integration of Industry 4.0 technologies enables OEMs to enhance efficiency and adapt to evolving market demands quickly. As a result, the Indian automotive landscape is becoming increasingly competitive, prompting OEMs to invest in research and development to maintain their market positions. The confluence of these factors positions the India Automotive OEM sector for robust growth in the coming years.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Increasing Demand for Electric Vehicles
The India Automotive Original Equipment Manufacturer (OEM) Market is witnessing a significant shift towards electric vehicles (EVs) driven by the government’s push for clean energy. The Ministry of Heavy Industries and Public Enterprises has initiated the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, aiming to achieve 30% electric mobility by 2030.
As a part of this initiative, it is anticipated that the electric vehicle segment will grow rapidly, with projections suggesting that the share of electric two-wheelers may reach around 15 million by 2025.This demonstrates a robust demand in the India Automotive OEM Market Industry, incentivized by subsidies and policy frameworks encouraging manufacturers to invest in electric technologies. Major companies like Tata Motors and Mahindra Electric are already expanding their EV portfolios, significantly impacting market trends and enhancing the competitive landscape.
Growth in Automobile Manufacturing
India has emerged as one of the largest automobile manufacturers in the world, with the Automotive Mission Plan 2026 aiming to make the country a global hub for automotive manufacturing. According to the Society of Indian Automobile Manufacturers (SIAM), India’s automobile production recorded a growth of 2.36% in the financial year 2021-2022, reaching over 22 million units.
This growth trajectory underlines the potential for the India Automotive OEM Market Industry.Additionally, government incentives in manufacturing and investments from foreign companies such as Suzuki and Hyundai are bolstering local production capacities, which is vital for the future growth and sustainability of the sector.
Rise in Disposable Income
The increase in disposable income among the Indian middle class is driving demand for personal vehicles. The National Sample Survey Office reports that household consumption expenditure in urban areas has been steadily rising, with an increase of approximately 10% year-on-year.
This trend leads to higher demand for passenger vehicles, enhancing the growth prospects of the India Automotive OEM Market. Automakers, including Maruti Suzuki and Hyundai Motor India, have noted a significant rise in sales for entry-level and mid-segment vehicles, aligning with the increased purchasing power of consumers in urban and semi-urban regions.
Emergence of Advanced Connectivity Technologies
The automotive sector in India is increasingly incorporating advanced connectivity technologies, such as the Internet of Things (IoT) and Artificial Intelligence (AI). According to a report by the Automotive Technology Association, the connected vehicle market in India is projected to reach USD 3 billion by 2024, with a compound annual growth rate of around 25%.
Major automotive players, including Tata Motors and Ashok Leyland, are integrating smart technology in their vehicles to enhance safety, efficiency, and customer experience.The push towards smart mobility solutions is expected to significantly impact the India Automotive OEM Market Industry, driving innovation and creating new market opportunities.
Automotive OEM Market Component Insights
The Component segment of the India Automotive OEM Market shows significant growth potential, driven by advancements in technology and an increasing demand for vehicle personalization. As the automotive industry in India evolves, there is a marked shift towards electric and hybrid vehicles, which greatly impacts the Powertrain segment. This shift results in a surge in investment towards efficient, lightweight, and high-performance powertrain technologies that cater to the growing consumer demand for eco-friendly and fuel-efficient vehicles.
The Chassis segment plays a critical role in enhancing vehicle stability and safety while reducing weight for improved fuel consumption.Innovations in material science, such as the use of advanced composites and lighter metals, are helping manufacturers create more durable and efficient chassis designs that comply with stringent regulatory guidelines on emissions and safety. Furthermore, the Electronics and Electrical segment has gained prominence with the integration of smart technologies in vehicles.
The push towards connected cars and automated driving solutions emphasizes the need for sophisticated electronic systems, leading to significant investments in Research and Development efforts.External Body components are also crucial, as they influence both the aesthetic appeal and aerodynamics of vehicles, impacting performance and fuel efficiency. Manufacturers are increasingly exploring sustainable materials for body panels and other external components, aligning with the environmental regulations in India. Lastly, the Car Interiors segment reflects changing consumer preferences as buyers seek a more comfortable and technologically integrated driving experience.
The growing importance of infotainment systems, quality materials, and ergonomic designs is shaping the automotive interior landscape.Each of these segments has a vital role in the overall machinery of the auto industry, reflecting not only market demands but also compliance with evolving regulations and technology advancements. The India Automotive OEM Market segmentation provides a comprehensive overview of these components, showcasing the dynamic interplay between innovation, consumer demand, and regulatory requirements, ultimately shaping the industry's future landscape.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Automotive OEM Market Vehicle Type Insights
The India Automotive OEM Market, particularly within the Vehicle Type segment, has been witnessing significant evolution, encompassing a range of categories such as Commercial Vehicles, Passenger Cars, and Electric Cars. Commercial Vehicles have historically contributed a major share to the market, facilitating logistics and transportation needs across the country, which is essential given India's vast geography and growing economy.
Passenger Cars remain a popular choice among consumers, with increasing demand for personal mobility reflecting changing lifestyles and urbanization trends.In recent years, Electric Cars have gained prominence as India pushes towards sustainable transportation solutions to address pollution and climate change issues. This shift is driven by government initiatives and incentives promoting electric mobility, thereby enhancing the market dynamics considerably.
The interplay of these segments showcases a broad spectrum of market growth opportunities driven by consumer preferences, regulatory actions, and technological advancements. Overall, the India Automotive OEM Market experiences positive trends as it adapts to the changing needs and expectations of its diverse customer base, underscoring the importance of understanding these vehicle types to capitalize on emerging market dynamics.
Automotive OEM Market Distribution Channel Insights
The Distribution Channel within the India Automotive OEM Market plays a crucial role in reaching consumers and facilitating the flow of products from manufacturers to end-users. This segment encompasses a diverse range of players, including Retailers, Wholesalers, and Distributors, each contributing uniquely to the market dynamics. Retailers serve as the direct touchpoint for consumers, offering specialized services and product availability that enhance customer experience.
Wholesalers function as vital intermediaries, providing bulk purchasing options and facilitating the movement of goods from manufacturers to various retail outlets.Distributors, meanwhile, are essential for ensuring that products are widely available across different geographic locations, allowing for better market penetration. The increasing demand for automotive products, paired with the rise of e-commerce, is driving innovation within distribution methods, leading to the integration of technology and improved logistics.
This evolving landscape presents further opportunities for optimizing supply chains and enhancing market efficiency. With the growth of urbanization and vehicle ownership in India, the importance of a robust and effective distribution network becomes even more pronounced, enabling the sector to meet the changing demands of the industry and consumers alike.Overall, the Distribution Channel segment significantly influences the India Automotive OEM Market revenue and presents numerous opportunities for growth and development.
The India Automotive OEM Market is characterized by intense competition, with numerous domestic and international players vying for market share in a rapidly evolving landscape. With the rise of electric vehicles, increasing consumer demand for sustainable mobility solutions, and growing urbanization, various manufacturers are adapting strategies to meet emerging trends. The market is influenced by factors such as government regulations, technological advancements, and shifting consumer preferences, which compel companies to innovate and differentiate their offerings.
As the automotive sector is pivotal to India's economy, companies are investing heavily in research and development to enhance product quality and expand their portfolios, thereby shaping the competitive dynamics significantly.Volkswagen India has established a robust presence within the Indian automotive landscape, recognized for its commitment to engineering excellence and quality.
The company has implemented a localization strategy that enhances its competitiveness in the market, allowing it to reduce production costs while ensuring that products meet local demands. Volkswagen India leverages its global expertise to deliver a diverse range of vehicles that cater to different segments of the market, capitalizing on the growing appetite for premium automobiles among Indian consumers.
The strength of Volkswagen lies in its brand reputation, innovative technology, and a strong dealership network that provides extensive customer support, contributing to its favorable position in the Indian automotive OEM sector.Ford India has made significant strides in the Indian automotive market, focusing on a combination of affordability and innovation to resonate with local consumers. The company offers a variety of key products, including compact cars, SUVs, and electric vehicles, aimed at meeting diverse consumer preferences. Ford India's strength is further bolstered by its investment in localized manufacturing and its commitment to sustainable practices as part of its broader strategy to cater to the evolving market demands.
Recent initiatives include collaborations and partnerships that enhance its technological capabilities and boost market reach, aligning with the trends of electrification and connected vehicles. With a strong emphasis on customer-centric solutions, Ford India aims to maintain a competitive edge, offering a blend of quality, performance, and service that appeals to a wide range of consumers across the country.
The India Automotive Original Equipment Manufacturer (OEM) market has seen significant developments recently, with various companies making strides in technology and sustainability. In October 2023, Tata Motors announced an investment in electric vehicle technology to bolster its footprint in the growing EV segment. Maruti Suzuki has revealed plans to ramp up production of hybrid models in response to changing consumer preferences and stricter emission regulations. Hyundai Motor India launched its electric SUV, showcasing its commitment to green mobility.
Ford India is re-evaluating its operations after restructuring efforts, seeking to focus on electric vehicles in a strategic pivot. Moreover, Renault India has introduced new variants to cater to the evolving market demands. The government's push for vehicle electrification and domestic manufacturing under the Make in India initiative has accelerated growth, attracting investments in Research and Development from multiple players. Notably, there have been no reported mergers or acquisitions among the mentioned companies in recent months, indicating a focus on internal growth strategies instead. The market is evolving rapidly with changes in consumer preferences and regulatory frameworks, making it a dynamic environment for these automotive giants.
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 3.39(USD Billion) |
| MARKET SIZE 2024 | 3.8(USD Billion) |
| MARKET SIZE 2035 | 6.5(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 5.001% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | Volkswagen India, Ford India, TVS Motor Company, Hyundai Motor India, Maruti Suzuki, Tata Motors, Toyota Kirloskar Motor, Nissan Motor India, Renault India, Eicher Motors, Hero MotoCorp, Bajaj Auto, Honda Cars India, Mahindra & Mahindra, Ashok Leyland |
| SEGMENTS COVERED | Component, Vehicle Type, Distribution Channel |
| KEY MARKET OPPORTUNITIES | Electric vehicle manufacturing growth, Smart vehicle technology integration, Government incentives for green vehicles, Enhanced supply chain localization, Rising demand for connected vehicles |
| KEY MARKET DYNAMICS | increasing electric vehicle adoption, government policies and incentives, rising consumer demand for safety features, rapid technological advancements, shifting supply chain dynamics |
| COUNTRIES COVERED | India |
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Senior Research Analyst She has over 5 years of rich experience, in market research and consulting providing valuable market insights to client. hands on expertise in management consulting, and extensive knowledge in domain including ict, automotive & transportation and aerospace & defense. she is skilled in go-to market strategy, industry analysis, market sizing, in depth company profiling, competitive intelligence & benchmarking and value chain amongst others.
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