The automotive components industry experienced a 11% YoY growth, reaching Rs. 3.32 lakh crore (US$ 38.4 billion) in the first half of FY25.
Domestic Original Equipment Manufacturer (OEM) supplies contributed ~54% to the industry’s turnover, followed by domestic aftermarket (~10%) and exports (~18%), in FY24. Domestic OEM component sales are projected to rise from US$ 59.3 billion in 2023 to US$ 89 billion in 2030. The component sales to OEMs in the domestic market grew by 8.9% to Rs. 5.18 lakh crore (US$ 62.4 billion). The aftermarket for auto components grew by 10.0% during FY24 reaching Rs. 9.38 lakh crore (US$ 11.3 billion). The auto component industry exported US$ 21.2 billion and imported US$ 20.9 billion worth of components during FY24, resulting in the trade surplus of US$ 300 million.
The auto components industry accounted for 2.3% of India’s GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of India's GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million by 2026.
Auto component exports are expected to increase five-fold from US$ 20 billion in 2023 to US$ 80 billion by 2030. Key target markets include North America, Europe and Latin America. North America, which accounts for 33% of total exports, increased by 5%, while Europe and Asia, which account for 32% and 24% of total exports, increased by 12% and growth for Asia remained flat, respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.
The domestic auto-component market is set to grow at 6% CAGR to US$ 16 billion by 2030, driven by an expanding vehicle parc and increasing vehicle age. The PV and CV segments could reach US$ 5 billion each, the 2W and 3W segment is expected to reach US$ 4 billion, the tractor segment could reach US$ 2 billion by 2030.
India’s total vehicle parc across segments stands at roughly 333 million units and is expected to reach 430-435 million units by 2030. By 2026, the automotive aftermarket segment in India is expected to reach US$ 32 billion. The aftermarket for auto components grew by 15% in FY23 reaching Rs. 85,333 crore (US$ 10.33 billion).
India’s total vehicle parc across segments stands at roughly 333 million units and is expected to reach 430-435 million units by 2030. By 2026, the automotive aftermarket segment in India is expected to reach US$ 32 billion. The aftermarket for auto components grew by 15% in FY23 reaching Rs. 85,333 crore (US$ 10.33 billion).
As per Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach US$ 30 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenue by 2026.
India has a very strong position in the international market. It is the largest manufacturer of tractors, the second-largest manufacturer of buses and the third largest of heavy trucks in the world. Indian automotive industry (including component manufacturing) is expected to reach between Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Indian automobile sector recorded an inflow of huge investments from domestic and foreign manufacturers.
In FY25 (April-December), domestic sales of two-wheelers, passenger vehicles, commercial vehicles, three-wheelers, and amounted to 31,39,288, 6,83,471, 5,62,652 and 1,50,39,570 units, respectively.
The Indian government announced a PLI scheme in February 2022. Under the PLI Auto scheme, the government received investment proposals worth Rs. 45,016 crore (US$ 6.04 billion) from 20 automotive companies. This scheme is expected to generate Rs. 2,31,500 crore (US$ 31.08 billion) in additional output. Production Linked Incentive (PLI) Schemes for 14 key sectors have been announced with an outlay of Rs. 1.97 lakh crore (US$ 23.84 billion) to enhance India's Manufacturing capabilities and Exports.
India accounts for 27% of total exports to the U.S., followed by 8% to Germany and 5% to Turkey.
The Indian automobile sector recorded an inflow of huge investments from domestic and foreign manufacturers. FDI inflow in the sector stood at Rs. 3,22,015 crore (US$ 37.21 billion) between April 2000-September 2024 which is ~5% of the total FDI inflows in India during the same period.
As part of the Union Budget 2025-26, the government has announced duty exemptions on lithium-ion battery scrap and other essential minerals. This initiative also includes adding 35 capital goods for electric vehicle production to the exemption list, with the goal of enhancing domestic production.
By FY28, the Indian auto industry aims to invest Rs. 58,000 crore (US$ 7 billion) to boost localization of advanced components like electric motors and automatic transmissions, reducing imports and leveraging 'China Plus One' strategy.
The Freudenberg Group, has officially inaugurated two advanced manufacturing facilities in Morinda, Punjab covering a total built-up area of 40,700 sq.m. The new plants are equipped to serve both domestic and international markets with an Investment of US$ 45 million, reinforcing Freudenberg’s dedication to India’s “Make In India” initiative.
Carlyle Group is launching a US$ 400 million investment vehicle to acquire Indian auto-component companies, aiming to tap into the country’s growing automotive and electric vehicle markets. This aligns with its strategy to build a diversified portfolio in the mobility space.
Tamil Nadu accounts for 70% of India’s EV two-wheeler manufacturing, with a current production capacity of 10 million units. Hyundai is also expanding with a roadmap of US$ 2.39 billion (Rs. 20,000 crore) for its Chennai unit. In 2024, notable EV investment commitments include Tata Motors-JLR US$ 1.07 billion (Rs. 9,000 crore), VinFast up to US$ 2 billion, Royal Enfield US$ 358.1 million (Rs. 3,000 crore), and Stellantis US$ 238.7 million (Rs. 2,000 crore).
Bharat Forge will invest Rs. 1,000 crore (US$ 119 million) over a period of five years in Tamil Nadu to enhance production capacity for the long term.
In May 2024, Tata Motors subsidiaries Tata Motors Passenger Vehicles (TMPV) and Tata Passenger Electric Mobility (TPEM) have partnered with Bajaj Finance, a leading financial services group, to provide supply chain financing solutions to their passenger and electric vehicle dealers.
Tata Motors partners with LeadIT to achieve net-zero emissions in Passenger Vehicles by 2040 and Commercial Vehicles by 2045, demonstrating commitment to sustainability.
In October 2023, Tata Motors signed a definitive agreement to acquire a 27% stake in Freight Tiger, a Software as a Service (SaaS) company, for Rs. 150 crore (US$ 17.99 million).
Auto components maker Happy Forgings to launch IPO on December 19th, 2023. It comprises a fresh equity issue of Rs. 400 crore (US$ 47.99 million) and an offer for sale (OFS) of 71.59 lakh shares.
Ola Electric IPO was the first auto company in India to launch an IPO in over two decades (20 years). Its IPO size was estimated to be of Rs. 8,500 crore (US$ 1.01 billion).
In August 2023, Bosch earmarks Rs. 480 crore (US$ 58.11 million) for R&D and an additional capex of Rs. 480 crore (US$ 58.11 million).
In June 2023, Tata Motors will invest US$ 2 billion towards developing new products and platforms over the next four years.
In May 2023, Apollo tyres would be making an investment around Rs. 1,100 crore (US$ 133.17 million) in the FY24.
In May 2023, Gabriel India inks a pact with Inalfa, to invest Rs. 170 crore (US$ 20.58 million) to set up a new manufacturing facility. Inalfa Gabriel Sunroof Systems (IGSS), in Chennai which will become operational in the first quarter of 2024.
During the 2024 global investor meet, Hyundai Motor India pledges an extra Rs. 6,180 Crore (US$ 743 million) for long-term investments in Tamil Nadu.
In May 2023, With Tesla proposing a manufacturing plant in India, the government plans to come out with a modified Production Linked Incentive scheme (PLI 2.0) for electric vehicles and advanced chemistry cell batteries to invite fresh investments.
In May 2023, Bridgestone looks to expand its retail footprint in India by 20-25%.
In May 2023, Tata Technologies on Monday announced a partnership with TiHAN IIT Hyderabad, to collaborate in the areas of Software Defined Vehicles (SDV) and Advanced Driver Assistance Systems (ADAS) that incorporate the latest technologies.
In April 2023, GreenCell Mobility invested Rs. 1,500 crore (US$ 181.59 million) to double EV buses supply in India
By 2030, Chinese EV manufacturer BYD hopes to control 40% of the Indian EV market. It already has a manufacturing setup in India, and the current plant's capacity may be increased by another 10,000–15000 units.
In FY23, Tamil Nadu attracted investment proposals worth Rs. 18,063 crore (US$ 2.209 billion) Tamil Nadu is capitalizing on its previous automotive expertise to enter the EV industry.
The Indian government is exempting imports of capital goods and machinery essential to produce lithium-ion cells used in EV batteries from customs duty.
In February 2023, Bridgestone India, a global leader in tyres and sustainable mobility solutions, announced that it would be investing over Rs. 600 crore (US$ 73.39 million) to meet the increasing demand for quality passenger tyres in the country.
In January 2023, NXP Semiconductors inaugurated a new state-of-the-art Systems & Silicon Innovation lab at NXP Semiconductors Campus in Manyata Tech Park, Bengaluru.
In December 2022, Union Minister of Road Transport and Highways, Mr. Nitin Gadkari, directed automakers to start producing flex-fuel vehicles in the next 6 months.
In November 2022, Continental Tires, a leading premium tyre manufacturer inaugurates Its First Commercial Vehicle Alignment Centre in Jaipur.
In November 2022, auto components maker Sona BLW Precision Forgings Ltd. announced its plans to increase capex by Rs. 1,000 crore (US$ 123.28 million) for its electric vehicles business.
In October 2022, auto components maker Minda Corporation announced its partnership with South Korean firm Daesung Eltec, to bring in next-generation advanced driver system solutions to India.
In May 2022, Badve Engineering Limited entered into a Commercial Agreement with EVR Motors Limited, Israel, for collaboration on the development and manufacturing of Two and three-wheeler electric vehicles.
