India produces 2.7 crore vehicles, valued at $108 billion in FY23: Report

The Indian automobile industry produced a whopping 2.7 crore vehicles across segments and types, worth around USD 108-billion (Rs 8.7-lakh crore) in FY23, with passenger vehicle segment accounting for 57 per cent at Rs 5-lakh crore in the total value, a report said on Wednesday.

Also, in the total 2.7 lakh crore vehicles churned out last fiscal, the commercial vehicle segment, which includes small 4-wheel carrier with less than 2-ton capacity to large tractor trailers and specialty vehicles like tippers, share stood at 10-lakh vehicles, generating a value of Rs 1.7-lakh crore, management consulting services firm Primus Partners said in its report. The CV segment accounted for 4 per cent in the total volume and 19 per cent in value terms, it said.

According to Primus Partners, the production of two-wheelers is closely matched by China, with 20-million two-wheelers coming out of the manufacturing facilities in the country, accounting for 77 per cent of the volume share. The overall segment accounted for Rs 1.8 lakh crore amounting to 21 per cent of value.

It also said that the number of people employed by the industry during the period was 1.9 crore. Within the passenger vehicle segment, according to the report, the mid-size and full-size SUV sub-segments accounted for over half of the value.

The compact sub-segment is also important and created 25 per cent of value, it said and added that the luxury segment vehicles contributed to Rs 63,000 crore in value or 13 per cent of the segment. It, however, noted that people are not preferring the cheaper 'Mini' cars and Sedans and they have a low share in value.

However, a large part of the electrification in India has happened in two-wheeler and three-wheeler segments, it added. The report also observed that while the Indian EV Industry is trailing behind top countries like China, US and EU, massive investments have taken place in India, which strongly indicates that the country is poised to significantly increase its EV segment in the next few years.

The automobile industry in India is on the cusp of unprecedented changes, with multiple factors reshaping the landscape, the report said. Factors such as electrification/alternate green power, rise in the use of electronic components, autonomous changes (such as self-driven cars) and shared vehicle rentals/cab services, among others, are driving the transformation of the Indian automobile industry, the report said.

“Our ground-up study on automobile industry value is leading to a lot of insights, for example, the Indian market is bypassing the lower priced products and more value is being created in feature-rich higher priced vehicles. We believe that the value growth is happening faster than volume growth," said Anurag Singh, Managing Director, Primus Partners.

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