The automobile industry in India is constantly growing, despite all the hardships and losses faced. The recent times have been tough for the survival of the auto market in India. Jobs were lost, and we incurred losses. In 2020 alone, around 3.5 lakh jobs were lost, and the automobile industry suffered a loss of millions in India. However, the auto industry is now recovering from all the adversities.
The size of the automobile market in India in 2025 is expected to be many folds of what it is today. And many factors are promoting the same.
The great importance that the auto market holds in India’s economic development and the rise of the auto sector would mean the country’s growth.
What to expect of the size of the car market in India in 2025? What are the factors promoting the growth of the auto market in India? What would be the landscape of the Indian automobile industry?
In this report, we are going to look at the most accurate prediction of the size of the automobile market in India in 2025. However, before we dive into the Indian automobile industry 2025, understanding the current auto market scene is essential to realize the accuracy of our prediction.
The current size of the auto market
The automobile industry has always been a huge part of the Indian economy. Right since its days of independence, the auto sector in India has seen steady development. The ever-growing importance and size of the industry have done major benefits to the country’s import-export scene.
Moreover, it is one of the main industries to provide employment to millions of Indians.
Some facts of figures about the Indian automobile industry in recent times:
- The Indian auto industry is expected to grow at a 12.7% CAGR in the years 2019-2026.
- At that rate, the Indian automobile sector would reach a market size of USD 512 billion. This number of market size was USD 222 billion in 2019.
- As of 2019, the automobile sector had a share of 7% of India’s GDP.
- For the same year, this giant industry generated employment of 35 million.
- The Indian automobile industry stands in 1st place as the largest two-wheeler manufacturer.
- As for cars, the industry stands at the 4th position in terms of manufactured units.
- India also happens to be the 7th largest manufacturer of commercial vehicles in the world.
- For every 1000 people in India, there are approximately 120 vehicles in all segments. This number is expected to go up to 300 in the coming decade.
- By 2021, 62% of India’s population would comprise the emerging and middle class. That’s roughly 900 million people! Being the chief consumer base for the automobile industry, this class of people is bound to encourage the Indian automobile industry.
- Besides the cars and two-wheelers, the automobile industry in India also includes the auto loans market, the auto insurance market, the market of automobiles’ tires, and other parts.
In the past years, new vehicles were sold only by means of retailers and physical dealerships. However, e-commerce has strongly been emerging for the automobile market as well. Moreover, people are now preferring used vehicles over new ones, blame it on the lower prices and new-like condition of the vehicles.
The above numbers are only expected to keep growing in the coming years and reach new heights by 2025.
Factors promoting the growth of the automobile industry in India
Among the vast number of reasons supporting the growth of the auto industry, the chief ones are:
- The emerging and middle class of India. This part of the social strata is on the rise in India. With a major section of the automobile industry focusing on this category of people, it is, without a doubt, one of the main reasons behind the growth of the automobile industry in India.
- The rapid urbanization of people is leading to a higher demand for vehicles.
- The manufacturing units’ infrastructure and the industry are backed by many huge names, both internationally and on the national level.
- The government policies are helping in the upliftment of the auto market.
All the factors combined are indicating a boom in the Indian automobile industry in 2025.
The automobile market in India 2025
The size of the automobile market in India is expected to grow exponentially in the coming years and reach a peak by the year 2025.
Highlights of the prediction are:
- The government expects to have investments worth USD 8000-10,000 million in local and foreign investments for the automobile market in India.
- Urbanization in India is growing and, by 2025, it is expected to be 36.2% of India’s total population. This will increase the demand and hence increase the size of the car market in India.
- The size of the automobile market in India is expected to have a value of USD 102 billion!
- Emphasis would be made on the production of EV’s and automated vehicles, especially cars. The size of the car market in India is expected to bloom.
- India is expected to have a total of 7.4 million vehicles.
- The size of the car market in India in 2025 is expected to be large enough to make India the 3rd largest car market in the world.
- With about 220 million online shoppers in India, the auto market is also expected to move online for most of its part. The emergence of e-commerce for the auto sector is going to be a reality.
The automobile market in India in 2025 is predominantly going to comprise Electric Vehicles and automated vehicles. The development of technology is going to bring tremendous reforms in the automobile sector as well.
At the growth rate of 7.2% CAGR, the Indian auto market will shine brighter than ever in 2025. India is expected to become the leader in shared mobility by 2030, with the majority of the market flowing with EV’s and autonomous vehicles.