AUTOMOBILE

Investment in Automobile Industry in India

India became the fourth largest auto market in 2018 with sales increasing 8.3 per cent year-on-year to 3.99 million units.. If you are looking for investment in the automobile industry in India, know that the sector is the largest tractor manufacturer, second-largest bus manufacturer and third largest heavy trucks manufacturer in the world.

The industry saw a 25.5 per cent jump in FDI from 2018 to 2019.

With FDI policy for automobile sector allowing 100% FDI under the automatic route, FDI equity inflows in Automobile industry amounted to $17.9 bn FDI between April 2000 and September 2017; contributing towards 5% of the total FDI inflows. FDI in automobile industry will bring with it technological progress, which will directly lead to economic development. Foreign direct investment in Indian automobile industry will stimulate industrialization, leading to more job opportunities.

7 %

Share in India's GDP
19 mn

Employentd generated
40 %

Share in global R&D
4.3 %

Share in India's exports

1

World’s largest tractor manufacturer and 2nd largest bus manufacturer
2

World’s largest producer of BT Cotton
3

World’s 2nd highest number of USFDA approved plants

Currently valued at $75 bn, the automobile industry is estimated to touch the coveted $300 bn mark by 2026
With a $135 bn revenue industry expectation by 2020, the automobile segment can reach $300 bn by 2026 at a CAGR (Compound Annual Growth Rate) of 15%
India's rapidly growing 5 auto hubs have a significant potential to be used as a base for export to SEA and MENA regions
In FY19, year-on-year growth in domestic sales among all the categories was recorded in commercial vehicles at 17.55 per cent followed by 10.27 per cent year-on-year growth in the sales of three-wheelers.
Overall domestic automobiles sales increased at 6.71 per cent CAGR between FY13-19 with 26.27 million vehicles getting sold in FY19

Growing income
3X increase in average household income from $ 6,393 in 2010 to $ 18,448 in 2020
Youngest Nation by 2025
India to become the youngest nation by 2025 with an average age of 25 years
Vehicle penetration
Currently valued at $75 bn, the automobile industry is estimated to touch the coveted $300 bn mark by 2026Expected to reach 72 vehicles per 1000 people by 2025
Expanding R&D hub
India accounts for 40% of total $ 31 bn of global engineering and R&D spend

MG Motor India to launch MG ZS EV electric SUV in early 2020 and plans to launch affordable EV in next 3-4 years.
May 2019: Maruti Suzuki India has invested Rs.4 crores to establish a Center of Excellence at ITI, Becharaji, Gujarat to provide technical skill development to the students. Spread over 11,800 ft², the centre is equipped with Maruti Suzuki Basic Training lab, Safety Simulation hop, and Finishing schools for Weld shop among other workshops and has a capacity for 150 trainees.
April 2019: Ashok Leyland has planned a capital expenditure of Rs.1,000 crores to launch 20-25 new models across various commercial vehicle categories in 2018-19.
Mar 2019: Hyundai Motors Company and KIA Motors Corporation plan on investing $300 mn in taxi service giant Ola, to build unique fleet and mobility solutions as well as building India specific EV and infrastructure.

The industry saw a 25.5 per cent jump in FDI from 2018 to 2019.
8.95% Share in Total FDI flows
$23.9% Total FDI inflows during April 2000 – December 2019
$5.1 bn Investments in the Automobile Industry from April 2000 to March 2019