Over the last decade, the automotive components industry has registered a CAGR of 10.06 per cent and reached US$ 56.52 billion in FY19 while exports have grown at CAGR of 8.34 per cent during FY14-FY19 to touch US$ 15.17 billion in FY19. The auto-components industry accounted for 2.3 per cent of India’s Gross Domestic Product (GDP), 25 per cent to its manufacturing GDP and provides employment to 50 lakh people in 2018-19.
Automobile component industry revenue stood at US$ 56.52 billion in FY19 from US$ 35 billion in FY14. As per Automobile Component Manufacturers Association (ACMA), automobile component exports from India are expected to reach US$ 80 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenues by 2026.
The automobile industry in India is world’s fourth largest, with the country currently being the world's 4th largest manufacturer of cars and 7th largest manufacturer of commercial vehicles in 2018. Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers dominate the industry and made up 81 per cent share in the domestic automobile sales in FY19. Overall, Domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18 with 26.27 million vehicles being sold in FY19. Indian automobile industry has received Foreign Direct Investment (FDI) worth Rs 1,31,419 crore (US$ 22.51 billion) between April 2000 and June 2019.
Domestic automobile production increased at 6.96 per cent CAGR between FY13-19 with 30.95 million vehicles manufactured in the country in FY19.
The government aims to develop India as a global manufacturing as well as a research and development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure Project (NATRiP) centres as well as a National Automotive Board to act as facilitator between the government and the industry. Under (NATRIP), five testing and research centres have been established in the country since 2015.
The Indian government has also set up an ambitious target of having only electric vehicles being sold in the country. Indian auto industry is expected to see 8-12 per cent increase in its hiring during FY19. The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country for introduction of electric vehicles (EVs) in their public transport systems under the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) scheme. The first phase of the scheme has been extended to March 2019 while In February 2019, the Government of India approved the FAME-II scheme with a fund requirement of Rs 10,000 crore (US$ 1.39 billion) for FY20-22. Number of vehicles supported under FAME scheme has increased to 192,451 units in March 2018 from 5,197 units in June 2015. In 2019, government is preparing to promote FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) Phase II scheme to steer India Electric Vehicles (EV) push.
Automobile exports grew 14.50 per cent in FY19. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026. Domestic two-wheeler industry is expected to grow at 8-10 per cent during FY19. Also, Luxury car market in India is expected to grow at a 25 per cent CAGR till 2020. The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign investments by 2023.