Source: GlobalData
India automotive market to see positive growth over next 12 months, reveals GlobalData survey
Posted in Automotive
The automotive sector in India is poised for positive growth over the next year, driven by favourable government policies such as the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India) II scheme, which has been in effect since April 2019 and encourages states to provide both fiscal and non-fiscal incentives to enhance the adoption of electric vehicles (EVs), according to a recent survey* conducted by GlobalData, a leading data and analytics company.
Madhuchhanda Palit, Automotive Analyst at GlobalData, comments: “While the overall growth of the automotive sector is promising, regional dynamics greatly influence the trajectory of the market. Factors such as advancements in the service sector, the availability of job opportunities, industrialization, and state government initiatives play pivotal roles in shaping the growth of the sector across different regions. Consequently, the growth prospects of the Indian automotive industry present a mixed outlook at the state level, warranting careful consideration of localized factors and strategies for businesses operating in this sector.”
A survey conducted across 31 major cities reveals that 24.7% are anticipated to experience highly positive growth, while 49.5% are expected to see moderate growth. Cities such as Mumbai, Hyderabad, and Pune are among those projected to thrive. Conversely, 7.5% of cities are expected to show flat growth, and 9.7% and 15.5% are forecasted to experience moderately declining and pessimistic growth, respectively, with Chandigarh being a notable example. Therefore, a comprehensive understanding of local market dynamics is crucial for automotive companies to navigate these divergent growth scenarios effectively.
Palit adds: “In Bangalore, a mixed growth outlook has been observed across different areas. While the city overall shows positive growth prospects, challenges such as traffic congestion and the prevalence of ride-sharing services like Uber and Ola may deter consumers from pursuing car ownership, thereby impacting market demand. As automotive companies plan their strategies for the Bangalore market, they need to carefully consider these factors and innovate to ensure sustained market growth.
Cities like Hyderabad and Mumbai are particularly well-positioned for automotive growth, thanks to robust developments in the service sector and job creation. Hyderabad has witnessed a surge in its job market, bolstered by government initiatives that promote start-ups and entrepreneurship. The government’s focus on enhancing the IT and ITES sectors has significantly contributed to job growth, while ongoing infrastructure improvements in roads, transportation, and power supply have made the city increasingly attractive for businesses and job seekers alike. This influx of workforce has, in turn, stimulated demand in the automotive market.”
Palit concludes: “The Indian automotive market is set for a positive trajectory over the next 12 months, driven by supportive government policies and regional economic developments. While certain cities exhibit strong growth potential, others face challenges that may hinder their progress. Stakeholders in the automotive sector should remain vigilant and adaptable to these dynamics to capitalize on emerging opportunities in this evolving landscape. By leveraging insights from these trends, automotive players can better position themselves to thrive in a rapidly changing market environment.”
*Survey was conducted between 1 May 2024 – 17 Feb 2025 with a total of 2,248 participants