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Indian Automobile Industry: Journey from the Beginning to Present

In Technology
July 14, 2023
indian automobile industry

In the Indian market, There are many motor vehicles of Indian and international brands. 3-4 Indian brands are playing well in the market, competing with foreign brands in terms of price, features and quality. 

Earlier the situation was different. People used to travel via horses or bullock carts. The same source was used to carry the things. Now, automobiles have become a part of everyone’s life and it seems impossible to think of a smooth life without automobiles. Here is a brief view of the starting era of automobiles and about the modern and upcoming era of automobiles in India.

About the Initial days of rising the automobile industry in India

The first car ran on Indian roads in 1897. Then, few cars were imported in India by rich communities. Since the 1930s there were very few cars in India because of the high cost of import.  In the late 40s, Hindustan Motors started to manufacture vehicles in India. In the beginning, they used to make commercial vehicles only. 

In the 1960s, Hindustan Motors collaborated with British carmaker Morris Motors to develop the Ambassador car. Ambassadors dominated the car market from 1960 to mid-1980.

In the 1950s, Premier Automobiles introduced the Premier Padmini, a licensed version of the Italian Fiat 1100. The Premier Padmini became a popular choice for Indian families, and it continued to be produced until the 1990s.

During the 1960s and 1970s, the Indian government introduced policies that favored the indigenous production of automobiles, leading to the establishment of several new automobile companies. Some of the notable new entrants during this period were Mahindra & Mahindra, Ashok Leyland, and Tata Motors.

In 1983, the Indian government established Maruti Udyog Limited, a joint venture with the Japanese carmaker Suzuki. Maruti Suzuki introduced small cars at affordable prices, which were well received by Indian consumers and soon became the dominant player in the Indian automobile market.

Present Market Size Of The Indian Automobile Industry

The Indian automobile industry is one of the largest in the world and has been growing steadily over the past few years. According to the Society of Indian Automobile Manufacturers (SIAM), the industry’s apex body, the Indian automobile industry’s overall domestic sales of vehicles, including passenger vehicles, commercial vehicles, three-wheelers, and two-wheelers, stood at 21,381,493 units in the financial year 2020-21.

In terms of specific categories, the passenger vehicle segment grew by 8.1% in the financial year 2020-21, with a total of 2,711,457 units sold. The commercial vehicle segment, which includes trucks and buses, declined by 29.2%, with a total of 568,559 units sold. The two-wheeler segment, which is the largest segment in the Indian automobile industry, declined by 16.1%, with a total of 15,104,743 units sold. However, the electric two-wheeler segment has been showing impressive growth, with sales growing from 1,400 units in 2017-18 to 143,837 units in 2020-21.

The Rise Of EVs In India

The adoption of electric vehicles (EVs) in India has been on the rise in recent years, driven by factors such as rising fuel prices, increasing environmental concerns, and favorable government policies.

In 2013, the Indian government launched the National Electric Mobility Mission Plan (NEMMP) to promote the adoption of electric vehicles in the country. The plan aimed to achieve national fuel security, reduce vehicular pollution, and promote sustainable growth. Under this plan, the government offered incentives to EV manufacturers, provided subsidies to buyers of electric vehicles, and set up charging infrastructure across the country.

In 2015, the Indian government launched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme, which provided financial incentives to manufacturers and buyers of EVs. In 2019, the FAME II scheme was launched, which offered higher incentives to manufacturers of electric vehicles and charging infrastructure providers.

As a result of these initiatives, the adoption of electric vehicles in India has been steadily increasing. According to a report by BloombergNEF, the sales of electric vehicles in India increased by 20% in 2020, despite the disruptions caused by the COVID-19 pandemic. The report also estimates that EV sales in India will continue to grow, reaching 4.8 million units by 2030.

Several automobile manufacturers, both domestic and international, have also been investing in the EV segment in India. Companies like Tata Motors, Mahindra & Mahindra, and Hero Electric have been expanding their electric vehicle portfolios, while international players like Tesla, Hyundai, and MG Motors have also announced plans to enter the Indian EV market.

The Indian government has set an ambitious target of achieving 30% electric vehicle penetration by 2030, which is expected to further accelerate the growth of the EV segment in India.

Conclusion

From The days when Hindustan Motors introduced the Ambassador car in collaboration with the British carmaker Morris Motors just after independence. Today, the Indian automobile industry is one of the largest in the world, with several international companies establishing a manufacturing presence in the country. The industry is highly diversified, with cars, two-wheelers, commercial vehicles, and tractors manufactured in India. Electric vehicles are expected to play a significant role in the future of the industry, with several companies investing in EV manufacturing facilities in India.

Today, the Indian automobile industry is one of the largest in the world, with a significant presence in both the domestic and global markets. The Indian automobile industry’s market size is expected to continue to grow in the coming years, driven by factors such as rising disposable incomes, increasing urbanization, and favorable government policies.