# Automobile Industry in India A total of 2.83 crore automobile units were sold in FY26, registering a growth of 10.4% over FY25. Explore Other Industries Agriculture and Allied Industries Auto Components Automobiles Aviation Ayush Banking Biotechnology Cement Chemicals Consumer Durables Defence Manufacturing E-Commerce Education and Training Electric Vehicle Electronics System Design & Manufacturing Engineering and Capital Goods Financial Services FMCG Food Processing Gems and Jewellery Healthcare Infrastructure Insurance IT & BPM Manufacturing Media and Entertainment Medical Devices Metals and Mining MSME Oil and Gas Paper & Packaging Pharmaceuticals Ports Power Railways Real Estate Renewable Energy Retail Roads Science and Technology Services Steel Telecommunications Textiles Tourism and Hospitality ## Advantage India ### Growing Demand *Rising middle-class income and young population will result in strong demand growth. *The Indian automotive industry is targeting to increase the export of vehicles by five times between 2016-26. *Automobile exports from India rose 24% to over 6.7 million units in FY26, led by strong demand for passenger vehicles, two-wheelers, and commercial vehicles abroad. *The total production of Passenger Vehicles*, Three Wheelers, Two Wheelers, and Quadricycle in March 2026 was ~2.98 million units and bringing the total production for FY26 to 34.71 million units. ### Opportunities *Focus shifting on electric cars to reduce emissions. *Government aims to transform India into an R&D hub. *India could be a leader in shared mobility by 2030, providing opportunities for electric and autonomous vehicles. *Between 2020 and 2025, the sector attracted approximately Rs. 2.23 lakh crore (US$ 25.6 billion) in investments, while EV financing is projected to reach Rs. 4,00,000 crore (US$ 47.03 billion) by 2030. ### Rising Investment *India offers 10-25% operational cost savings for auto firms compared to Europe and Latin America. *The automobile sector received a cumulative equity FDI inflow of about Rs. 2,70,230 crore (US$ 40.31 billion) between April 2000-March 2026. *The Indian EV market, valued at US$ 3.71 billion in 2025, is projected to reach US$ 191.04 billion by 2034. *The PLI scheme for automobiles and auto components received Rs. 2,818.9 crore (US$ 325.6 million) in FY26. ### Policy Support *Automotive Mission Plan 2016-26 is a mutual initiative by the Government of India and the Indian automotive industry to lay down the roadmap for the development of the industry. *In December 2025, the Government of India disbursed Rs. 1,350 crore (US$ 152 million) under the PLI scheme to boost domestic automotive and EV manufacturing. *In February 2026, the Government of India doubled the allocation for the auto PLI scheme to Rs. 5,940 crore (US$ 672 million) in the Union Budget. Snapshot Showcase Infographics Reports Related News Last updated: Sep, 2026 #### Automobile Industry Report May, 2026 ## Introduction The Indian automobile industry has long been a reliable barometer of economic performance, given its critical role in both macroeconomic expansion and technological advancement. Within the sector, the two-wheeler segment dominates in terms of volume, driven by a growing middle class, a predominantly young population, and rising demand from rural markets. Demand for commercial vehicles has also strengthened, supported by the expansion of logistics and passenger transportation services. Market growth is expected to be shaped by emerging trends such as vehicle electrification, particularly in three-wheelers and small passenger cars. India has also established itself as a prominent auto exporter with strong growth prospects in the near future. Automobile exports rose 24% in FY26 to over 6.7 million units, led by robust demand for passenger vehicles, two-wheelers, and commercial vehicles in global markets. Complementing this momentum, government initiatives such as the Automotive Mission Plan 2026, the scrappage policy, and the production-linked incentive (PLI) scheme are expected to position India as a global leader in both the two-wheeler and four-wheeler markets. ## Market Size India enjoys a strong position in the global heavy vehicles market as the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world. The total production of Passenger Vehicles*, Three Wheelers, Two Wheelers, and Quadricycle in March 2026 was ~2.98 million units and bringing the total production for FY26 to 34.71 million units. Two-wheelers and passenger vehicles dominate the domestic Indian auto market. In FY26, Two-wheelers and passenger cars accounted for 76.79% and 16.43% of market shares respectively. Passenger car sales are dominated by small and midsized cars. The electric vehicle (EV) market in India is emerging as a significant growth driver. In FY26, India’s EV sales grew 30% to 2.66 million units, up from 2.05 million in FY25, achieving 8.62% penetration of total automotive sales, with two- and three-wheelers accounting for nearly 87% of EV volumes and penetration rising across major vehicle segments. The Indian EV market, valued at Rs. 0.31 lakh crore (US$ 3.71 billion) in 2025, is projected to reach Rs. 16.15 lakh crore (US$ 191.04 billion) by 2034., growing at a CAGR of 54.94% during 2026-34. Between 2020 and 2025, the sector attracted approximately Rs. 2.23 lakh crore (US$ 25.6 billion) in investments, while EV financing is projected to reach Rs. 4,00,000 crore (US$ 47.03 billion) by 2030, supporting significant industry expansion and job creation. ## Investments To keep up with the growing demand, several auto makers have started investing heavily in various segments of the industry during the last few months. Some of the recent/planned investments and developments in the automobile sector in India are as follows: - In May 2026, Maruti Suzuki commenced commercial production at the second plant of its Kharkhoda manufacturing facility in Haryana, adding annual capacity of 250,000 vehicles and doubling the site’s total capacity to 500,000 units, while raising the company’s overall annual production capacity across Gurugram, Manesar, Kharkhoda and Hansalpur to 2.65 million units; once fully operational, the Kharkhoda facility is planned to reach annual capacity of 1 million vehicles. - In May 2026, Force Motors announced plans to invest over Rs. 3,000 crore (US$ 317.9 million) over the next two-and-a-half years to expand its product portfolio, develop hybrid powertrains and strengthen exports. - In May 2026, Hyundai Motor India announced plans to invest around Rs. 7,500 crore (US$ 794.7 million) in FY27 to expand production capacity to 1.14 million units and strengthen its SUV and EV portfolio. - In May 2026, Tata Motors Passenger Vehicles announced plans to invest around Rs. 10,000 crore (US$ 1.06 billion) over the next two years to support new product development, EV expansion and manufacturing capacity addition. - In May 2026, Hero MotoCorp announced plans to invest over Rs 1,500 crore (US$ 158.4 million) in FY27 to expand its scooter business and nearly double monthly scooter production capacity to around 100,000 units from approximately 60,000 units, while also scaling Vida electric two-wheeler capacity and investing an additional Rs 700 crore (US$ 73.9 million) in a second global parts centre in South India. - In May 2026, Ola Electric’s board approved an investment of US$ 208.5 million in its core EV and battery-cell technology units, to be completed by May 14, 2027, as the company seeks to increase localisation and in-house cell production, reduce costs and support its push towards profitability. - In May 2026, TVS Motor Company announced plans to invest around Rs 3,500 crore (US$ 369.6 million) in FY27 to expand production capacity, product development and R&D, including adding 1.5 million units of annual capacity over the next 12 months to raise total capacity to around 8.3 million units, while supporting growth across scooters, EVs, premium motorcycles and export markets. - On May 11, 2026, Toyota Motor Corporation announced plans to establish a new Toyota Kirloskar Motor vehicle manufacturing plant in the Bidkin Industrial Area of Maharashtra, with annual production capacity of 100,000 vehicles and approximately 2,800 employees; scheduled to begin production in the first half of 2029, the facility will manufacture a new SUV and include stamping, welding, painting and assembly operations to serve India and surrounding markets. - In April 2026, Vietnam-based Vingroup announced plans to invest Rs. 61,347 crore (US$ 6.5 billion) in Maharashtra over 2 years across electric mobility, renewable energy, smart townships, and public infrastructure, potentially creating around 24,700 jobs. - In April 2026, Škoda Auto Volkswagen India inaugurated a new 33,000 sq. ft. R&D wing in Pune, accommodating over 250 engineers to strengthen vehicle development and software capabilities. - On April 20, 2026, Hyundai Motor and TVS Motor Company announced a partnership to develop electric three-wheelers and micro four-wheelers for India, with Hyundai leading design, engineering and technology development and TVS evaluating manufacturing and commercialisation, targeting affordable last-mile urban mobility solutions. - In April 2026, Maruti Suzuki announced plans to invest around Rs 14,000 crore (US$1.48 billion) in FY27, its highest-ever annual capital expenditure, to expand capacity at its Kharkhoda plant in Haryana, develop a new manufacturing facility in Gujarat and support future products and export growth, with recently commissioned 250,000-unit lines at Kharkhoda and Hansalpur expected to support additional production in FY27. - On April 23, 2026, Stellantis India rolled out its 50,000th vehicle from its Thiruvallur manufacturing plant in Tamil Nadu, marking a key milestone for its India-developed Smart Car platform and strengthening the state’s role as an export-ready automotive manufacturing hub. - On March 15, 2026, Honda Cars India announced plans to invest around Rs 1,200 crore (US$126.7 million) in a new EV manufacturing line at its Tapukara plant in Rajasthan to produce the upcoming 0 Alpha electric SUV, positioning the facility as a key production and export hub for Honda’s future electric vehicles. - In FY26, India’s automobile sales reached a seven-year high of 28.03 million units, up 7.1% year-on-year, as all major vehicle segments recorded growth, with passenger vehicle sales rising 5.1% to a record 4.49 million units, two-wheeler sales increasing 7.2% to 20.50 million units and three-wheeler sales growing 8.4% to an all-time high of 0.80 million units, according to the Society of Indian Automobile Manufacturers (SIAM). - The automobile sector received a cumulative equity FDI inflow of about Rs. 2,70,230 crore (US$ 40.31 billion) between April 2000-March 2026. - On February 23, 2026, Škoda Auto Volkswagen India commenced production of the new Kushaq SUV at its Chakan plant in Pune, marking a key milestone in its India operations with deliveries scheduled to begin in March 2026. - On February 16, 2026, JSW MG Motor India announced plans to invest US$330–440 million (Rs. 3,000–4,000 crore) aimed to increase plant capacity to around 300,000 units annually and accelerate its push into electric and hybrid vehicles. - On February 9, 2026, Tata Motors-Jaguar Land Rover inaugurated a Rs. 9,000 crore (US$ 1.01 billion) luxury car manufacturing plant in Ranipet, Tamil Nadu, marking a major expansion in India’s premium auto manufacturing. The facility began operations with the rollout of the Range Rover Evoque and was planned to scale capacity to 2.5–3 lakh vehicles annually in phases. - On February 6, 2026, Mahindra & Mahindra Ltd. announced a Rs. 15,000 crore (US$ 1.69 billion) investment to set up an auto and tractor manufacturing plant in Nagpur, Maharashtra. The facility was planned to support both ICE and electric vehicles, strengthening its production capacity. The move was expected to boost regional industrial growth and employment. - On January 9, 2026, Ashok Leyland inaugurated an electric vehicle manufacturing plant in Lucknow, Uttar Pradesh, marking a major step in its clean mobility push. The facility was designed with an annual capacity of up to 5,000 vehicles and focused on electric buses and commercial vehicles. - On December 4, 2025, VinFast announced a US$500 million (Rs. 4,418 crore) investment in India to expand its manufacturing operations in Tamil Nadu. The investment is aimed at developing new production lines for electric buses, scooters, and related infrastructure, alongside its existing EV plant. - On November 20, 2025, Maruti Suzuki India Limited inaugurated its 1,500th parts and accessories distributor touchpoint in Mumbai, expanding the network to cover approximately 760 cities and enhancing parts availability for millions of vehicles. - On October 15, 2025, Hyundai Motor India Ltd. (HMIL) announced an investment plan of Rs. 45,000 crore (US$ 5.07 billion) through FY30, aiming for 26 new launches (including 7 new nameplates), positioning India as a global export hub with target exports of up to 30% and revenue crossing Rs. 1,00,000 crore (US$ 11.28 billion) by FY30. - The India-United Kingdom (UK) free trade agreement signed in July 2025, boosts the Indian auto sector’s domestic competitiveness by reducing import tariffs on fully built passenger vehicles from 100% to 10% over 10 years, alongside calibrated annual quotas starting at 10,000 units, encouraging localisation, innovation, and technology upgrades. - Goods and Service Tax (GST) on EVs has reduced from 12% to 5%. - The electric three-wheeler segment achieved record sales of 7,41,420 units in FY25. In this segment Mahindra and Mahindra Last Mile Mobility sold 78,524 units, the highest in the segment with a market share of 42.9%. - Tata Motors is set to invest Rs. 33,000-35,000 crore (US$ 3.86-4.10 billion) between FY26 and FY30 to bolster its passenger vehicle and electric portfolio, launching 30 new models, aiming for a 16% market share by FY27 rising to 18-20% by FY30, with Rs. 16,000-18,000 crore (US$ 1.87-2.11 billion) specifically allocated to the EV arm. - On August 12, 2025, DPIIT signed an MoU with Hero MotoCorp to support early-stage startups via the ‘Hero for Startups’ accelerator, offering mentorship and R&D access. - On August 11, 2025, VinFast inaugurated its Rs. 16,000 crore (US$ 1.87 billion) EV assembly plant in Thoothukudi, Tamil Nadu, its first outside Vietnam, aiming to make the city a South Asian export hub with an initial capacity of 50,000 vehicles annually, scalable to 1.5 lakh units. - On August 2, 2025, Mahindra & Mahindra completed the acquisition of a 58.96% stake in SML Isuzu for Rs. 555 crore (US$ 64.9 million), aiming to expand its commercial vehicle market presence. - In July 2025, Maruti Suzuki India Limited has partnered with DPIIT, to support ‘Startup India’ innovators in mobility and manufacturing with mentorship, industry access, and testbed facilities to accelerate market-ready solutions. - On May 28, 2025, Nissan announced an Rs. 6,496 crore (US$ 760 million) investment in India over the next two years to launch multiple new models and expand operations, reinforcing its strong commitment to the Indian market - On April 17, 2025, Tata Motors announced that it had filed a record 250 patents and 148 design applications in FY25, its highest ever in a single year. - On March 29, 2025, BYD announced plans to set up its first EV manufacturing plant near Hyderabad, Telangana, targeting an annual capacity of 6,00,000 vehicles by 2032. - In October 2024, Hyundai Motor India raised a record Rs. 27,870 crore (US$ 3.26 billion) through what became India’s largest-ever IPO, achieved via a fully subscribed offer-for-sale. - Skoda Volkswagen India plans a Rs. 9,923 crore (US$ 1.16 billion) investment under its India 3.0 strategy to boost premium SUVs and electric vehicles using the CMP 21 platform. - On May 15, 2024, Kinetic Green announced plans to enter battery manufacturing as part of its Rs. 10,000 crore (US$ 1.17 billion) company by 2029 strategy, with a Rs. 500 crore (US$ 58.5 million) capex investment over 3-4 years to produce batteries for its e-Luna and L5 3-wheeler models. - Mahindra & Mahindra Ltd plans to invest Rs. 26,000 crore (US$ 3 billion) in its automotive business over 2027, with Rs. 12,000 crore (US$ 1.42 billion) allocated specifically for its electric vehicle unit. - Between March and May 2025, Hero MotoCorp invested Rs. 525 crore (US$ 62.1 million) in Euler Motors for a 32.5% stake, leading its Rs. 638 crore (US$ 76.6 million) Series D round and marking its entry into the electric three-wheeler market. - On February 2025, TVS Motor Company announced a Rs. 2,000 crore (US$ 236.6 million) investment in Karnataka over the next five years to enhance its presence in the state through new infrastructure and expanded capabilities. - Honda Motor Japan has announced plans to establish a dedicated electric motorcycle production facility in India by 2028. The new plant will be operational by 2028 and is expected to produce a wide variety of electric two-wheelers by combining modules common to multiple models, aiming to reduce costs and increase efficiency. - In January 2025, Force Motors Ltd announced securing an order to supply 2,429 ambulances to Uttar Pradesh's Health Department, enhancing the region's medical services. - On October 30, 2024, the Asian Infrastructure Investment Bank approved up to Rs 501.96 crore (US$ 53 million) in non-sovereign equity funding for India’s MEAL E-Mobility project through BII India EV LLP, including a Rs 473.54 crore (US$ 50 million) equity investment, to support Mahindra Electric Automobile Limited and accelerate the adoption of four-wheeler passenger EVs in India, replacing the earlier Mahindra EV fundraising update. - Tata Passenger Electric Mobility, a subsidiary of Tata Motors Limited and pioneer of India’s EV revolution (TPEM), along with the Rajasthan Solar Association (RSA), has entered a Memorandum of Understanding (MoU) to promote electric vehicles (EVs) and the use of solar energy for EV charging in Rajasthan. - The Renault-Nissan alliance is stepping up its investments in India plans to invest US$ 600-700 million at its Chennai-based facility to step up platform localisation and improve sophistication levels in manufacturing. - In April 2024, Maruti Suzuki India Limited, commissioned another vehicle assembly line at its Manesar facility. - In January 2024, Mercedes-Benz announced an investment of Rs. 200 crore (US$ 24.04 million) in India and is gearing up to introduce more than a dozen new cars, including EVs, during the year. - In February 2024, Klaus Zellmer CEO of Skoda Auto said India is the most promising growth market for Skoda Auto and Skoda Auto India is looking to increase its share in the Indian market to 5% by 2030. - In April 2024, Hero Motocorp said it has opened an assembly facility in Nepal in partnership with its distributor CG Motors with capacity of 75,000 units per annum. - In January 2024, BMW sold 1,340 luxury cars, the highest in the segment, which gave it a market share of 0.34%. Mercedes-Benz sold 1,333 cars in January 2024. - In January 2024, Hyundai Motor India Limited announced US$ 743.8 million (Rs. 6,180 crore) investment plans in the state of Tamil Nadu including US$ 21.7 million (Rs. 180 crore) towards a dedicated ‘Hydrogen Valley Innovation Hub,’ in association with IIT- Madras. - In January 2024, Hyundai Motor India Ltd. finalized the acquisition and transfer of specified assets at General Motors India's Talegaon Plant in Maharashtra and inked an MoU with the Government of Maharashtra committing to an investment of US$ 722 million (Rs. 6,000 crore) in the state. - In January 2024, Mahindra & Mahindra Ltd. and the India-Japan Fund ("IJF"), managed by the National Investment and Infrastructure Fund Limited ("NIIF"), entered into a binding agreement, with IJF committing to invest US$ 48.1 million (Rs. 400 crore) in Mahindra Last Mile Mobility Limited (MLMML). - In January 2024, at the Vibrant Gujarat Global Summit, Maruti Suzuki announced the investment plans in Gujarat with a New Greenfield plant and a fourth line in SMG. - In December 2023, Tata Passenger Electric Mobility Ltd. (TPEM) and Bharat Petroleum Corporation Limited (BPCL) signed an MoU to jointly establish 7,000 public charging stations nationwide to enhance customer satisfaction. - In December 2023, Maruti Suzuki India Limited entered into an agreement with the Government of Haryana to establish the second Japan-India Institute for Manufacturing (JIM) as part of its corporate social responsibility (CSR) initiative. The company will invest US$ 698 thousand (Rs. 5.8 crore) to upgrade the existing ITI Kansala into a JIM. - In December 2023, Hero MotoCorp announced a partnership with Ather Energy for an interoperable fast-charging network in India which will cover 100 cities with over 1900 fast-charging points. - In November 2023, TVS Motor announced its entry into the European market through a distribution agreement with Emil Frey, a renowned automotive distribution company with a century-long legacy. - In November 2023, SAIC Motor and JSW Group announced a strategic joint venture to accelerate growth with focus on green mobility. - In November 2023, Tata Motors inaugurated its state-of-the-art Registered Vehicle Scrapping Facility in Chandigarh. - 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 US$ 17.99 million (Rs. 150 crore). - In March 2023, the Central government sanctioned US$ 72.41 million (Rs. 800 crore) under FAME India Scheme Phase II to Indian Oil (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL), for setting up 7,432 public fast charging stations across the country. - In February 2023, German luxury car maker Audi India began local production of the Audi Q3 and Audi Q3 Sportback at the Skoda Auto Volkswagen India Private Limited (SAVWIPL) plant in Aurangabad. ## Government Initiatives The Government of India encourages foreign investment in the automobile sector and has allowed 100% FDI under the automatic route. Some of the recent initiatives taken by the Government of India are: - On February 1, 2026, the Government of India doubled the allocation for the auto PLI scheme to Rs. 5,940 crore (US$ 672 million) in the Union Budget 2026-27 despite low utilisation in the previous year. The move signaled expectations of higher production and investment as the scheme enters its growth phase. - On December 10, 2025, the Government of India disbursed Rs. 1,350 crore (US$ 152 million) under the PLI scheme to boost domestic automotive and EV manufacturing. The initiative supported approved OEMs and component makers while promoting localisation and advanced technology production - On August 26, 2025, India’s EV push included 14,028 e buses, 9,332 public charging stations, and over Rs. 54,000 crore (US$ 6.32 billion) in investments through PM E DRIVE and PLI schemes to boost domestic manufacturing and green mobility. - PM E DRIVE, started in October 2024, is India’s umbrella scheme to accelerate EV adoption and ecosystem support with a Rs. 10,900 crore (US$ 1.31 billion) outlay, encompassing e 2Ws, e 3Ws, e buses, heavy EVs, public charging infrastructure, vehicle testing, and localisation, with its tenure extended to March 31, 2028. - Under the upcoming CAFÉ 3 norms, effective from April 2027, India will place electric vehicles and flex-fuel vehicles which use ethanol-petrol blends on equal regulatory footing. - As of July 31, 2025, India has advanced EV adoption through FAME-II, PM E-DRIVE, and PM-eBus Sewa, committing over Rs. 42,000 crore (US$ 4.91 billion) towards incentives, infrastructure, and localisation across vehicle segments and regions. - The Ministry of Heavy Industries has launched FAME- III Scheme, with a budget of Rs. 10,900 crore (US$ 1.29 billion) to promote electric mobility and reduce reliance on fossil fuels over a two-year period from April 1, 2024, to March 31, 2026. - Under Electric Mobility Promotion Scheme 2024 government aims to support 3,72,215 EVs including e-2W (3,33,387) and e-3W (38,828 including 13,590 rickshaws & e-carts and 25,238 e-3W in L5 category). - Ministry of Heavy Industries, Government of India with the approval of Department of Expenditure has launched Electric Mobility Promotion Scheme 2024 to further accelerate the adoption of EVs in the country which is a fund limited scheme with a total outlay of Rs. 500 crore for the period of 4 months, from 1st April 2024 to 31st July 2024. - In January 2024, the Ministry of Heavy Industries extended the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year. The incentive will now be applicable for a total of five consecutive financial years, until March 31, 2028. - Ministry of Heavy Industries (MHI) officials revealed that India plans to launch a new scheme to incentivise electric vehicle purchases and improve charging infrastructure, aligning with the interim budget's focus on eco-friendly transportation. Also, the allocation of US$ 321.5 million (Rs. 2,671.33 crore) for 2024-25 is expected to be utilized by March 31, 2024. - Under phase-II of FAME India Scheme, subsidy amounting to US$ 696.8 million (Rs. 5790 crores) has been awarded to EV manufacturers on sale of 13,41,459 number of electric vehicles till January 31, 2024. - The FAME Scheme was extended for a further period of 2 years up to 31st March, 2024 - In January 2023, under the FAME-II scheme, the Centre approves US$ 97.77 million (Rs. 800 crore) for 7,432 public fast charging stations. ## Road Ahead The automobile industry in India benefits from factors such as the availability of skilled labour at low cost, robust R&D centres, and affordable steel production. It also provides significant investment opportunities and generates both direct and indirect employment for skilled and unskilled workers. The electric vehicle (EV) sector alone is projected to create five crore jobs by 2030, underscoring its potential as a major driver of employment and growth. To support this expansion, the Ministry of Heavy Industries (MHI) has extended the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year. The scheme now offers incentives on determined sales over five consecutive financial years from 2023-24 to 2027-28, with disbursements in the subsequent year. It has already proven highly successful, attracting proposed investments of US$ 8.1 billion (Rs. 67,690 crore) against the original target of US$ 5.1 billion (Rs. 42,500 crore), with US$ 1.6 billion (Rs. 13,037 crore) invested by December 31, 2023. Looking ahead, the government is working to overhaul the country’s transportation system by creating an integrated EV mobility ecosystem with a low carbon footprint and high passenger density, especially in urban areas. Its long-term strategy and policies are designed to accelerate EV adoption in line with growing customer demand for cleaner and more efficient transportation solutions. With these initiatives, India is also well positioned to become a global leader in shared mobility by 2030, opening new avenues for electric and autonomous vehicles. ***Notes:*****Data except for BMW, Mercedes, JLR, Tata Motors & Volvo Auto.* ***References:** International Organization of Motor Vehicle Manufacturers, Media Reports, Press Releases, Department for Promotion of Industry and Internal Trade (DPIIT), Automotive Component Manufacturers Association of India (ACMA), Society of Indian Automobile Manufacturers (SIAM), Union Budget 2026-27, Federation of Automobile Dealers Association (FADA), Press Information Bureau (PIB)* ## FAQs ## What is the current status of the automobile industry in India? The automobile industry in India is one of the world's largest, producing 34.71 million vehicles in FY26. India is also the largest tractor producer, second-largest bus manufacturer, and third-largest heavy truck manufacturer globally. ## Which are the top automobile companies in India? Leading companies in the Indian automobile industry include Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Hero MotoCorp, TVS Motor, Ashok Leyland, Honda Cars India, Toyota Kirloskar, and JSW MG Motor India. These manufacturers drive production, exports, and innovation. ## How is the Indian automobile industry contributing to the country’s economy? The automobile industry in India contributes significantly through manufacturing, exports, employment, and foreign investment. Automobile exports crossed 6.7 million units in FY26, while the sector attracted cumulative FDI of over US$ 40.3 billion between April 2000 and March 2026. ## What are the major automobile clusters in India? Major automobile manufacturing hubs in India include Chennai, Pune, Gurugram-Manesar, Sanand, Hosur, Chakan, Aurangabad, and Sri City. These clusters support vehicle manufacturing, component production, exports, and automotive R&D. ## How is the Indian government supporting the automobile sector? The Government is strengthening the automobile industry in India through the Auto PLI Scheme, PM E-DRIVE, FAME, 100% FDI under the automatic route, EV charging infrastructure, and supportive policies that promote localisation, advanced manufacturing, and electric mobility. ## Which Indian car manufacturers lead the domestic and global markets? Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Hyundai Motor India are among the leading players in the Indian automobile industry, supported by expanding manufacturing capacity, strong domestic sales, exports, and increasing investments in electric vehicles and advanced technologies. ## What are the future opportunities for the automobile industry in India? The automobile industry in India offers strong opportunities in electric vehicles, shared mobility, exports, autonomous technologies, and advanced manufacturing. Government support, rising consumer demand, and large-scale investments are expected to position India as a global automotive hub. #### Automobile Industry Report May, 2026 ## Related News MORE 25 Sep 26 Maruti Suzuki India commissions 300 kW Green Hydrogen (GH2) electrolyzer plant... Maruti Suzuki India has commissioned a 300 kW Green Hydrogen electrolyzer plant at Manesar as part of its efforts to expand renewable energy use in manufacturing. 16 Sep 26 Passenger Vehicle Sales Rise 36.5% in August, Two-Wheelers Up 10.5%: SIAM... SIAM data shows passenger vehicle sales rose 36.5% and two-wheeler sales grew 10.5% in August 2026, marking the highest-ever August sales. Three-wheeler sales also rose 22.8%, supported by strong rural demand and improving financing conditions. 14 Sep 26 European Union to Allow 2.5 Lakh Indian Cars at Concessional Duty Under FTA, Quota to Reach 4 Lakh in 10 Years... The India-EU FTA will provide concessional duty access for up to 2.5 lakh Indian passenger vehicles annually, with the quota set to rise to 4 lakh vehicles over 10 years. 7 Sep 26 Electronics to Make Up 50-55% of Car Cost by 2030, Signalling Major Localisation Opportunity: BCG-ACMA... **BCG-ACMA report projects electronics will make up 50-55% of a car's cost by 2030, up from 30-35% in 2020. This shift presents a major localisation opportunity for Indian auto component makers across sensors, ECUs and battery management systems.** 7 Sep 26 Bharat NCAP 2 to roll out from October 2027, entire vehicle safety chain to be assessed: Union Minister for Road Transport and Highways, Mr. Nitin Gadkari... Bharat NCAP 2.0 is set to expand vehicle safety assessments from occupant protection to crash avoidance, pedestrian safety and post-crash response from October 2027. ### Automobile Clusters - Mumbai-Pune-Nashik-Aurangabad - Chennai-Bengaluru-Hosur - Delhi-Gurgaon-Faridabad - Kolkata-Jamshedpur - Sanand-Hansalpur-Vithalpur ### Industry Contacts - Automotive Component Manufacturers of India (ACMA) - Society of Indian Automobile Manufacturers (SIAM) - Automotive Research Association of India (ARAI) - Automobile Association of Southern India (AASI) ### Posters MORE #### REVVING UP India is expected to become the third largest market for electric vehicles by 2025 at 2.5 million vehicles. ### IBEF Campaigns MORE #### Discover India A campaign designed to showcase the country’s rich heritage, vibrant ... #### Aatmanirbhar Bharat Utsav 2024 Union Minister of External Affairs, Dr. S. Jaishankar and Union Commerce an... ### Case Studies MORE #### SUV Dominance and the Future of Passenger Vehicles India's passenger vehicle industry over the past two decades have been gone under significant changes. In particular, the market has been transfor... #### Expressway Infrastructure Development Outlook in India India's vision of becoming a Viksit Bharat by 2047 has positioned transport infrastructure as a cornerstone of its long-term economic growth strat... #### The Rise of Contract Manufacturing in India's Electronics Sector India's rise to become a large center for electronics manufacturing services is one of the most significant manufacturing changes in India's r... ### IBEF BLOG MORE 24 Sep 2026 ### Popular Rice Varieties in India: Market Landscape, Key Varieties and Growth Opportunities Machine tools can be considered the foundation of current manufacturing pro... 23 Sep 2026 ### How Digital Banking is Transforming the Indian Banking Industry Over the last decade, the Indian banking sector has seen considerable chang... 18 Sep 2026 ### How Jute Products Support India's Eco-Friendly Economy As the global economy moves towards sustainable production and consumption ... ##### Partners