Shangliao Sun
Research expert covering India
Passenger vehicles in India - statistics & facts
From the 1950s, when annual production was limited to 40,000 vehicles, the automotive industry in India has come a long way. Decades later, India has emerged as an important part in the global automotive industry, the third-largest passenger vehicle manufacturer in the Asia-Pacific region in 2023. In fiscal year 2024, over 4.9 million passenger vehicles were produced in the country. The majority of the produced units were sold domestically.
Market overview
Small and mid-sized cars dominate the passenger vehicle market. Hatchback crossovers and compact SUVs have gained immense momentum in the past few years in the passenger vehicle segment. In 2023, SUVs had a share of about 49 percent in passenger vehicles sales across India. The boost in sales came by combining the comfort and feasibility of SUVs to relatively small chassis of hatchbacks to create the perfect blend for roads in India in terms of maneuverability, size and practicality of the vehicle. Maruti Suzuki was the leading passenger vehicle manufacturer with the highest market share in the passenger vehicle segment. The competition has increased with the arrival of Kia and MG to the Indian market.Cars and traffic
Public transportation is a service that has not been able to keep up with the exponential growth of cities in India. Continuous infrastructure developments and increasing road networks have forced the citizens to resort to personal vehicle purchasing, that has made the existing congestion crisis in the south Asian country even worse. In the list of Asia's most congested cities, India was the most frequently featured country. There has also been a gradual increase in the annual number of deaths due to traffic accidents. Solutions to the public transport crisis continues to be a matter of pressing concern. To transition the Indian population from the use of personal vehicles to public transport, the latter would require efficient planning and generous investments to get the infrastructure into place.Recovering from the slump
The recession that started late in 2018 had severe impacts on the domestic passenger vehicle industry in India. Several factors including price hikes in fuel and interest rates, insurance and emission standards in combination with the economic slowdown created several headwinds for the segment. The impact was further prolonged by the coronavirus pandemic. 2020 was the worst year for the passenger vehicle industry in India so far where the market size was reduced to 2013 level. However, since financial year 2022, the sector has shown signs of recovery, with sales gradually approaching pre-pandemic levels. The Indian government has introduced a series of initiatives to encourage consumption and to boost the electric vehicle sector.
