The Indian automobile industry is growing by leaps and bounds despite the obstacles created by the pandemic and semiconductor chip shortage in the last couple of years.
India has the chance to overtake the USA and China to become the largest automobile manufacturer in the world in the next 5 years, thinks Maruti Suzuki Chairman RC Bhargava. It already overtook a lot of developed nations in recent times to emerge at the 3rd spot as the largest automobile manufacturer behind the aforementioned nations overtaking Japan. With the surge of EVs and the government’s approach toward the promotion of mass adoption, the future surely looks bright and promising. Even Nitin Gadkari, Union Minister for Roads, Transport and Highways shares this opinion regarding the future of the Indian automobile industry.
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India to Overtake US and China
As per the official data, China sold 26.86 million automobiles in CY2022 compared to India’s 20.75 million. While this might not seem too big of a gap to overcome, it must be understood that our sales comprise mostly two-wheelers, while China’s stats have tons of cars. Also, going forward, the EV wave in China is unlike anywhere else on the planet. In fact, there are already established EV giants in China that are manufacturing cars left and right at competitive prices. Furthermore, they are expanding into global markets, challenging the legacy carmakers due to their lower prices.
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Maruti, Hyundai & MG’s Investment Plans
Nevertheless, RC Bhargava is confident that Maruti’s exports could triple by 2030 from around 2.6 lakh units in FY2022-23 to around 6-8 lakh units in 2030. It has announced an investment of Rs 18,000 Crore over the next 7 years on its upcoming Kharkoda plant in Sonipat, Haryana to achieve that. Similarly, other prominent carmakers in the country, like Hyundai and MG Motors have announced plans to invest Rs 20,000 Crore and Rs 5,000 Crore respectively to expand their manufacturing prowess in the next 5-7 years.
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Role of OEMs
To achieve the ambitious goal, not just the car manufacturers but also the auxiliary OEMs (Original Equipment Manufacturers) need to contribute. For instance, Jai Bharat Maruti has announced an investment of Rs 300-350 Crore in the next few years. It supplies spare parts to Maruti Suzuki. Likewise, OEMs for other carmakers must follow the same path so that manufacturing could increase exponentially in the next few years. With all these factors in place, India stands a great chance to emerge as the top automobile manufacturer in the next 5 years.
