Analyzing the Performance of the Indian Automobile Sector

Abstract

This study analyzes the performance of the Indian automobile sector over the period from 2014-15 to 2023-24, using data collected from the Society of Indian Automobile Manufacturers (SIAM). The analysis focuses on key performance indicators such as production, domestic sales, and exports, aiming to understand the trends, challenges, and opportunities within the industry. The overall production of the Indian automobile sector expanded from 23.36 million units in 2014-15 to 28.43 million units in 2023-24, reflecting a compound annual growth rate (CAGR) of 2.21%. The growth was primarily driven by a strong recovery in the passenger and commercial vehicle segments, while the two- and three-wheeler markets faced persistent challenges. Domestic sales increased from 19.72 million units to 23.85 million units, with a moderate CAGR of 2.13%, demonstrating resilience in the face of structural and economic hurdles. In contrast, the export market experienced fluctuating growth, with significant increases in 2016-17 and 2018-19, but a downturn in 2020-21 and 2023-24, attributed to the global market’s volatility and the pandemic's impact. Despite these challenges, the recovery of certain vehicle categories, particularly passenger vehicles and two-wheelers, coupled with the emergence of new categories like quadricycles, indicates potential growth opportunities. In conclusion, while the sector has faced setbacks in specific areas, the overall performance highlights its resilience and suggests positive long-term prospects for the Indian automobile industry.