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Automobile

Industry Summary

  • The Indian automobile industry is the world's 5th largest auto market.
  • It contributes 7% to GDP and 49% to manufacturing output.
  • The industry manufactured over 22 million vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycles in financial year 2021.
  • Automobile exports from April 21 to June 21 stood at 1.4 million units in comparison to 0.4 million units in April 20 to June 20
  • Tesla’s entry into the Indian automobile market in January 2021 expected to boost the EV market in India.
  • The EV industry will create five crore direct and indirect jobs by 2030.
  • 100% FDI allowed under automatic route in this industry.
  • Additive manufacturing, AI-based automated inspections, use of big data to inform design and production are major potential areas.

Value Chain

Step 1

Raw material suppliers

Step 2

Tier 2 supplier

Sub-component manufacturer

Step 3

Tier 1 supplier

Component manufacturer

Step 4

Original Equipment Manufacturer

OEM

Step 5

Distribution and sales

Dealers

Step 6

After-market services

Cost Drivers

  • Raw materials
  • Research and Development
  • Labour
  • Advertising
  • Infrastructure set-up and development for EV segment

Revenue Drivers

  • Income level
  • Technological innovations
  • Infrastructure
  • Economic conditions
  • After sales service

Growth Drivers

  • Scrappage policy in Union Budget 2021 to boost demand
  • Production Linked Incentive (PLI) scheme for automobiles and auto-parts worth USD 3.49 billion announced by govt. in September 2021
  • Easy availability of credit

Key Customers

  • Households
  • Corporates

Key Players

  • Mahindra & Mahindra
  • Maruti Suzuki
  • Hero MotoCorp
  • Hero Electric
  • Tata Motors
  • Toyota Motor Corporation
  • Honda Motor Co. Ltd.
  • Ford Motor Co.

Channels

  • Dealers
  • Company Showrooms
  • Retailers