India Automotive Market Share, Size, Growth & Trends

Market Size

The India Automotive Market Size reached an estimated value of USD 113.83 billion in 2024. Over the forecast period from 2025 to 2034, the market is expected to grow at a compound annual growth rate (CAGR) of 8.10%, reaching a projected value of around USD 228.69 billion by 2034. This growth is driven by rising disposable incomes, increasing demand for both passenger and commercial vehicles, and advancements in vehicle technologies, particularly in electric and hybrid vehicles.

Market Trends

Growth of Electric Vehicles (EVs): The Indian government’s initiatives, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, and growing environmental concerns are accelerating the adoption of electric vehicles. The EV market in India is expected to grow at a CAGR of 17.8% from 2025 to 2034, with increased consumer demand for clean energy alternatives.
Shift Toward Automatic Transmission: With the increasing complexity of urban traffic and rising demand for more comfortable driving experiences, the preference for automatic transmission vehicles is growing. The segment for automatic transmission vehicles is expected to grow at a CAGR of 11.2%, driven by urbanization and the convenience of automatic systems.
Focus on Fuel Efficiency and Sustainability: Rising fuel prices and growing environmental awareness are driving consumers towards fuel-efficient and sustainable vehicles. This trend is expected to boost the demand for hybrid and electric vehicles in the coming years.
Technological Advancements: The Indian automotive market is witnessing significant advancements in vehicle technology, such as autonomous driving, connected vehicle systems, and advanced safety features. These innovations are set to transform the market, improving vehicle performance and driving experiences.

Market Growth

India’s automotive market is poised for significant growth due to several key drivers:

Rising Disposable Income: The expanding middle class in India is leading to increased consumer spending, including on vehicles. As more people gain the financial means to purchase cars, both the passenger and commercial vehicle markets are benefiting.
Government Support and Policy Initiatives: The Indian government’s policies, including subsidies for electric vehicles, stricter emissions standards, and infrastructure development, are creating a conducive environment for the automotive sector. These initiatives will continue to drive the growth of the market.
Infrastructure Development: Improved infrastructure, such as better roadways, expressways, and the development of new transportation corridors, is contributing to the growth of the automotive market in India by making it easier for vehicles to travel longer distances.

Market Segmentation

By Type

Passenger Vehicles: Passenger vehicles represent the largest segment in the Indian automotive market. This category includes cars, SUVs, and other personal vehicles. The segment is projected to grow at a CAGR of 10.3% as more consumers opt for personal mobility solutions, driven by rising incomes and increasing urbanization.
Commercial Vehicles: Commercial vehicles, including trucks, buses, and vans, are crucial for goods and people transportation across India. The demand for commercial vehicles is expected to rise with the growth of logistics, infrastructure development, and e-commerce sectors. This segment continues to expand as industrial and business activities increase across the country.

By Transmission

Manual Transmission: Manual transmission vehicles remain the most widely used in India due to their lower cost compared to automatic transmission vehicles. They are especially popular in rural areas and among budget-conscious consumers. Despite the growing trend toward automatic transmission, manual vehicles still hold a significant share of the market.
Automatic Transmission: The demand for automatic transmission vehicles is growing due to increasing urbanization, traffic congestion, and a preference for more comfortable driving experiences. Automatic vehicles are expected to see robust growth, particularly in the passenger vehicle market, as they offer convenience and ease of use.
Dual-Clutch Transmission: Dual-clutch transmission (DCT) vehicles are gaining popularity in the Indian market for their improved fuel efficiency and faster gear shifting capabilities. DCT vehicles provide a balance between the fuel efficiency of manual transmissions and the ease of automatic transmissions.

By Propulsion Type

Internal Combustion Engine (ICE): ICE vehicles, which run on petrol or diesel, dominate the Indian automotive market. Despite the rise of electric and hybrid vehicles, ICE vehicles remain the preferred choice for most consumers due to their established infrastructure, lower initial cost, and long driving range. The ICE segment is projected to continue holding a significant market share in the near future.
Electric Vehicles (EVs): With growing concerns about environmental sustainability and government incentives for electric vehicle adoption, the EV market in India is expanding rapidly. The segment is projected to grow at a CAGR of 17.8% from 2025 to 2034 as more consumers switch to electric mobility.
Hybrid Vehicles: Hybrid vehicles, which combine internal combustion engines with electric motors, are also gaining traction in India. These vehicles offer better fuel efficiency and lower emissions than traditional ICE vehicles. The hybrid segment is expected to see steady growth as consumers look for vehicles that provide both convenience and sustainability.

By Vehicle Type

Light Motor Vehicles (LMV): LMVs, including passenger cars, hatchbacks, and compact SUVs, are the largest category in the Indian automotive market. The increasing preference for private cars, especially among middle-class consumers, is driving the growth of this segment. The demand for compact cars and small SUVs is particularly strong in urban areas.
Motorcycles and Commercial Vehicles (MCWG): Motorcycles are incredibly popular in India due to their affordability and fuel efficiency. This segment also includes two-wheelers used for commercial purposes, such as delivery services. The motorcycle market continues to expand, driven by a growing young population and the rise of e-commerce and logistics services.
Heavy Goods Motor Vehicles (HGMV): HGMVs, such as large trucks and buses, are essential for the movement of goods and people across the country. With the growth of the logistics sector and infrastructure projects, demand for HGMVs is expected to increase, particularly in the transportation and construction sectors.

Key Market Players

Several prominent companies are leading the way in the Indian automotive market, contributing to its growth and transformation. These players include both domestic and international brands:

Tata Motors LTD : Tata Motors is one of the largest automotive manufacturers in India, offering a wide range of vehicles, including passenger cars, SUVs, and commercial vehicles. The company is investing heavily in electric vehicle technology and has a strong presence in both the domestic and international markets.

Mahindra & Mahindra Limited: Mahindra & Mahindra is a key player in the Indian automotive market, particularly in the SUV and commercial vehicle segments. The company is also focusing on the electric vehicle market with models like the e2o and the eVerito, contributing to India’s transition to cleaner energy solutions.

Hyundai Motor Company.: Hyundai is one of India’s top automotive manufacturers, known for offering a wide range of passenger vehicles, including compact cars and SUVs. The company is focusing on expanding its electric vehicle offerings to meet the rising demand for sustainable transportation.

Honda Motors co. Ltd .: Honda is a popular brand in India, known for its high-quality, fuel-efficient vehicles. The company’s vehicles are widely regarded for their reliability and performance. Honda is also increasing its efforts to enter the electric vehicle market to capitalize on the growing trend toward eco-friendly mobility.

Ford Motor Company.: Although Ford exited the Indian passenger vehicle market, it remains an important player in the commercial vehicle and manufacturing sector. Ford’s commitment to sustainable mobility and electric vehicle technology continues to influence the market.

Others: These and all other companies, along with others, are driving the growth of India’s automotive market through their innovative products, technological advancements, and strategic initiatives. Their efforts to introduce eco-friendly vehicles, enhance manufacturing capabilities, and cater to the evolving needs of consumers are shaping the future of India’s automotive industry.