Given that the Automobile industry is crucial to both macroeconomic development and technical innovation, it has historically been a reliable barometer of how the Indian economy is performing. Moreover, due to India’s large proportion of young people and expanding middle class, the two-wheeler category leads the industry in volume.
Additionally, the expanding interest of businesses in investigating the rural markets contributed to the sector’s expansion. The demand for commercial vehicles is developing due to expanding passenger and logistical sectors. There is anticipation to fuel market expansion with new trends, such as the electrification of vehicles, especially three-wheelers and compact passenger cars.
The Production of Vehicles
India is the world’s largest tractor maker, second largest bus manufacturer, and third largest producer of heavy trucks, giving it a significant position in the market for heavy vehicles. In addition, The production of 22, 22.93 million automobiles took place annually in India in FY. As a result, India is a significant exporter of automobiles and anticipates rapid export development in the near term.
Moreover, technology played an important role in the Indian logistics industry. It attracts more customers with its vehicles equipped with high-end technology features. Indian logistics industry witnessed the same revolution.
As a result of this revolution, pickup trucks came into the market as cargo vehicles with spacious driver cabins with modernised features. However, if you are new to automobile investments, Tata Yodha will suit you well.
Additionally, several government- schemes, including the Automotive Mission Plan 2026, the scrappage policy, and the production-linked incentive programme in the Indian market, are hoping to upraise India to a position of prominence in the global two- and four-wheeler markets by 2022.
Understanding the Indian Automobile Market
The Indian passenger automobile market had a value of US$32.70 billion in 2021, and there are predictions of seeing a growth of over 9% at a CAGR between 2022 and 2027 to reach US$54.84 billion. The prices of modernised vehicles depend on the model; for instance, Tata Ace Gold Diesel starts at Rs. 5.99 lakhs.
As per the predictions, India’s electric vehicle (EV) industry will be worth Rs. 50,000 crore (US$ 7.09 billion), By 2025. According to a CEEW Centre for Energy Finance report, India might have a US$206 billion market for electric vehicles by 2030. This will require investing US$ 180 billion in infrastructure for automotive production.
Government’s Initiatives in Indian Logistics Sector
The Rocky Mountain Institute (RMI) and NITI Aayog estimate that in 2030 the Indian EV finance market will likely be worth Rs. 3.7 lakh crore (US$ 50 billion). According to the India Energy Storage Alliance’s research, the country’s EV industry will witness growth at a CAGR of 36% until 2026, as per the anticipations.
Additionally, the EV battery market will grow within the same period at a CAGR of 30%, as per the predictions. The Indian automobile sector plans to export cars five-fold between 2016 and 2026. The total number of automobiles exported from India in FY22 was 5,617,244.
Funding & Labour Distribution within the Sector
Automakers are already making investments majorly in various business sectors to keep pace with the escalating demand over the past few months. As a result, the industry received FDI of US$33.77 billion, or 5.48% of all FDI in equities, between April 2000 and September 2022.
The availability of competent labour at a reasonable price, strong R&D facilities, and affordable steel manufacturing are only a few of the elements influencing the car business. In addition, the sector offers fantastic investment prospects and direct and indirect employment for both skilled and unskilled personnel. By 2030, the electric car sector will generate five crore employment.
The Future and Estimated Growth of the Indian Logistics Sector
The Indian government introduced the nation’s first double-decker electric bus in Mumbai in August 2022. The administration believes that modernising the nation’s transport infrastructure is vital in the long run. With an emphasis on urban transport reform, it is trying to develop an integrated electric vehicle (EV) mobility ecosystem with high passenger density and a low carbon footprint.
In response to rising public demand for more environmentally friendly transportation choices, the government’s policy and regulations are meant to encourage broader use of electric cars. By 2023, the Indian government anticipates the vehicle industry will bring in $8–10 billion in domestic and foreign investments.
By 2030, India may be a global leader in shared transportation, opening doors for electric and driverless cars. After recovering from the COVID-19 pandemic’s impacts, the Indian car industry is anticipated to develop rapidly in 2022–2033. In 2022–2023, sales of electric vehicles, particularly two-wheelers, are projected to increase.
Indian Logistics is a huge and growing industry with several opportunities. Besides, the growth of technology directly affects the manufacturing of vehicles and the overall sales and response of the customer base.
Moreover, Indian Government has always been supportive of its new initiatives, schemes and liberal nature of letting the market get more capitalised and free since a free call comes with better products.
As concluded, the Indian logistics industry is seeing drastic changes and growth and is estimated to see more of them.