India Auto Industry

The India auto industry consists of passenger vehicles and trucks. Passenger vehicles consist of cars and utility vehicles.

Market size of the India auto industry

A total of 900,752 passenger cars and 260,345 commercial vehicles were sold in India during 2003-04 representing a growth of 27.36 percent and 36.53 percent respectively.  Out of the most rapidly developing nations, the India auto industry was beaten by the China auto industry, which saw sales of 4.44m units.  The US auto industry was the world leader, with sales of 16.93m units.  Meanwhile the Europe auto industry registered sales of 15.63m and the Japan auto industry had sales of 5.18m. Within Europe, the UK auto industry had sales of 2.94m units.

GDP and motor vehicle growth in the India auto industry

The India automobile industry attained a new peak during 2003-04 when it sold more than a million units of passenger cars, to emerge as one of key players in the global automotive arena. India’s economic growth and motor vehicle growth are directly correlated with each other, see figure 38. Purchase full updated report here.  Sales peaked in 1999 - 00 when GDP growth hit a high of 6.7 percent. With GDP falling in 2000, motor vehicle growth also slowed down. Since then, growth has recovered recording an all-time high of 900,752 units, when the economy rebounded to grow at 7.4 percent per annum in 2003.

Passenger vehicle and truck sales in the India auto industry

Domestic passenger vehicles grew by 27 percent in 2003-04 to reach 900,752 units, see figure 39. This is the second largest growth after a 50 percent growth in 1999-2000on a relatively lower base.

The percentage share of mini vehicles in the total market has declined from 20.27 percent in 2002 - 03 to 18.40 percent in 2003 – 04, see figure 40, due to a shift in consumer preferences from entry-level cars to compact and mid-size cars. Though the overall share of the compact cars in the total passenger vehicle market has declined marginally, this is where volumes (over 40% of total market size) are maximum. The mid-size segment recorded a 50.77 percent growth during fiscal 2003 - 04. Competitive pricing by manufacturers like Ford (see Ford profile), Hyundai and Tata Motors, largely influenced the growth in this segment.

Also a large section of compact car users preferred to upgrade to a larger and more comfortable car. The executive, premium and luxury car segments put together constituted 2.2 percent of the market. These segments are yet to see the volumes that the mid-size segment currently enjoys. Sales of multi-utility vehicles grew by nearly 30 percent over the previous year. Growth was due to a pick up in both, the owner-driven segment and the fleet and taxi operators segment.

The sale of medium and heavy-duty trucks has increased after a cyclical downturn in 2001 and 2002, see figure 41. A growth spurt in the infrastructure sector, rapid progress on different highway projects, including the ambitious Golden Quadrilateral project, and periodical fleet replacement cycle have contributed to this growth of heavy and medium trucks in 2004. Light truck sales have grown steadily over the years from 55,350 units in 1999 - 00 to 98,931 units in 2004, as they are used for transportation of daily necessities over short to medium distances or for intra-state transportation.

Major players in the India auto industry

Maruti Udyog is the leading player in the Indian passenger vehicle market with a 55 percent market share in 2003 with sales of 423,353 units, see table 23. It continued to remain the market leader in the mini segment with sales of its entry-level Maruti 800 growing by 17 percent.

Tata Motors with a market share of 15 percent in 2003 - 04, gained 1 percent market share. Hyundai Motors India with a 14 percent and Mahindra & Mahindra with 8 percent market share are other leading players.
Tata Motors’ market share in the commercial market rose to 59 percent with a gain of 3 percent with unit sales of 152,195 in 2003, see table 24. This was facilitated largely by a 6 percent increase in light trucks sales. Ashok Leyland has a presence in the medium and heavy trucks segment and it enjoys an overall market share of 22 percent. Mahindra & Mahindra has a presence only in light trucks, the sales of which grew by 42 percent due to the success of its Load King model.  

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