Automobile Sector in India

Listen to our Podcast: Grow your wealth and keep it secure.

0:00 / 0:00

For many of you, your first car or bike isn’t just a vehicle; it’s a ticket to freedom, and a dream come true. The growth of cars and bikes on Indian roads tells its own story – of a rising India. It’s not just about the big cities. Even in smaller towns and villages, you can see the change. The old bullock cart now shares space with tractors, bikes, and even the occasional sedan. So, whether you’re a car enthusiast, someone looking to buy their first vehicle, or just curious about how India became this giant automobile hub, read about automobile sector in India.


India’s association with automobiles started in the early 1940s. Post-independence in 1947, national leaders recognised the significance of a strong automobile sector for economic growth. Initially, the industry was dominated by a few, like Hindustan Motors and Premier. Their offerings, though limited, laid the foundation for the future.

The real change began in the 1980s when economic reforms welcomed international automakers. This led to a wider vehicle range for consumers, integrating advanced technology, safety, and design. The 1990s solidified these changes with Indian manufacturers collaborating with global counterparts, bringing in joint ventures and shared technologies.

By the 2000s, India emerged as a global manufacturing hub, attracting several auto giants. Indigenous innovations, such as the Tata Nano, made headlines. The two-wheeler segment boomed, making brands like Hero and Bajaj household names. Today, India stands as a crucial automobile market. The rise in electric mobility and sustainability reflects the nation’s evolving socio-economic dynamics and its vision for a connected greener future.

List of Top 10 Automobile Stocks

Company NameMarket Cap (in Cr)
Maruti Suzuki India Ltd₹ 3,17,946
Tata Motors Ltd₹ 2,32,545
Mahindra and Mahindra Ltd₹ 1,91,665
Bajaj Auto Ltd₹ 1,45,171
Eicher Motors Ltd₹ 93,819
TVS Motor Company Ltd₹ 71,400
Hero MotoCorp Ltd₹ 61,256
Ashok Leyland Ltd₹ 53,731
Force Motors Ltd₹ 4,980
Hindustan Motors Ltd₹ 329

1. Maruti Suzuki India Ltd
Maruti Suzuki holds a pivotal place in the Indian automobile industry. As a dominant player, it has consistently addressed the evolving needs of the average Indian motorist. From hatchbacks to sedans, its vast range serves different demographics. The company’s widespread service network ensures even remote areas have access to quality services. Its commitment to offering vehicles that are both affordable and reliable has strengthened its position over the decades.

Also Read: Maruti Suzuki India Ltd.- A Complete Guide

2. Tata Motors Ltd
A subsidiary of the mighty Tata Group, Tata Motors is a perfect blend of innovation, quality, and trustworthiness. They have a diverse portfolio including cars, trucks, and buses. Their push into the electric vehicle segment has been impressive, with models like the Nexon EV gaining significant attention. Their global presence, owing to brands like Jaguar and Land Rover, also adds to their prestige.

3. Mahindra and Mahindra Ltd
A brand that is often linked with durability, Mahindra has made its mark not just in the urban setting but also in India’s vast rural areas. Their vehicles, especially SUVs, are renowned for their ruggedness. The company also has a significant presence in the agricultural sector, offering tractors and farm equipment, thus serving a wide range of consumers.

4. Bajaj Auto Ltd
Bajaj Auto, a legacy brand, has always been associated with robust two-wheelers. From the iconic Bajaj Chetak scooter that was an integral part of many households to performance bikes, Bajaj’s journey has been commendable. They have successfully balanced their offerings to cater to both the daily commuter and the motorcycle enthusiasts.

5. Eicher Motors Ltd
When one thinks of Eicher Motors, the distinct sound of the Royal Enfield comes to mind. This brand has managed to create a cult following, thanks to its classic design, combined with modern engineering. The cruiser bike segment in India, for the most part, has been influenced by the legacy of Royal Enfield.

6. TVS Motor Company Ltd
TVS, a household name, has been synonymous with reliable and efficient two-wheelers. With a rich history spanning decades, their vehicles range from scooters aimed at daily commuting to sporty bikes that appeal to younger consumers. Their commitment to quality and customer satisfaction has ensured their place in the top names of the industry.

Also Read: TVS Motor Company Q2 Results

7. Hero MotoCorp Ltd
Hero MotoCorp, once known as Hero Honda, has been a stalwart in the Indian two-wheeler industry. The brand has touched the lives of millions, offering them affordable mobility solutions. Their extensive range of bikes, coupled with their vast service network, has made them a preferred choice for many.

8. Ashok Leyland Ltd
Ashok Leyland stands tall as a leader in the world of commercial vehicles. Their buses and trucks are a common sight on Indian roads. Known for durability and efficiency, they have consistently been the choice for public transportation departments and logistic companies.

9. Force Motors Ltd
Force Motors might not have the massive presence of some of its competitors, but it has built a solid reputation, especially in the utility vehicle and minivan segments. Their vehicles, known for robustness, cater primarily to the transportation and goods sectors.

10. Hindustan Motors Ltd
The tale of the Indian automobile industry would be incomplete without mentioning Hindustan Motors and its iconic Ambassador. Once the face of Indian roads and the preferred vehicle of the elite, the Ambassador is an irreplaceable part of Indian automotive history. While the company might not have the prominence it once possessed, its legacy is undeniable.

Current Performance

The automobile sector’s current performance in India paints a multifaceted picture. On one hand, there has been growth driven by factors such as increasing urbanisation, rising middle class, evolving consumer preferences, and favourable government policies. This can be seen in the emergence of newer segments within the industry, from compact SUVs to luxury vehicles designed for the Indian consumer.

But, there are challenges too. Regulatory changes, particularly in terms of emission norms, have pushed automakers to rethink their strategies. Environmental concerns have become paramount, with many cities battling with rising pollution levels, thereby forcing the industry to look at more sustainable, cleaner solutions for mobility. 

One significant trend is the rising interest in electric vehicles (EVs). As the global focus shifts towards sustainability, EVs in India have started gaining attention. Manufacturers, both domestic and international, are coming out with electric versions of their popular models or introducing brand new electric models altogether. This move is well-supported by government incentives aiming at the widespread adoption of EVs in the near future.

Future Outlook

Looking ahead, the automobile sector in India seems to be on an upward swing. The country stands at the brink of an automotive revolution, driven by several key changes.

Firstly, the electric vehicle (EV) boom is not just a temporary phase. With continued governmental support in terms of subsidies and a push for infrastructure development, such as charging stations, we can expect a more substantial presence of EVs on Indian roads. This move will not only address environmental concerns but also reduce the nation’s dependency on oil imports.

Connected cars and autonomous driving are another frontier. Although fully autonomous vehicles might seem a bit distant for Indian roads, the integration of advanced driver-assistance systems (ADAS) and other connected car technologies are already making their mark. These innovations aim to enhance the driving experience, providing more safety, comfort, and convenience to the user.

Another crucial trend is the shared mobility concept. With urban areas getting more congested and the challenges associated with vehicle ownership, many are leaning towards car-sharing and taxi apps. This change in consumer behaviour will likely push automobile manufacturers to collaborate more with shared mobility service providers, potentially leading to vehicles designed explicitly for such services.

Advantages of Investing in the Automobile Sector

  • Diversification: The automobile sector spans a variety of segments, from passenger vehicles to commercial ones, two-wheelers to electric vehicles. This variety allows investors to diversify their portfolios, reducing risks associated with relying on a single segment.
  • Government Policies: The Indian government has consistently shown support to the automobile sector. Initiatives such as ‘Make in India’, subsidies for electric vehicles, and infrastructure development provide a favourable environment for growth. Such pro-industry regulations and policies can boost the returns on investments.
  • Rising Disposable Income: With the Indian economy growing, the middle class is expanding. This demographic shift means more income and, consequently, an increased demand for vehicles. As more people aim to own personal vehicles, the industry stands to benefit.
  • Technological Advancements: The automobile sector is at the forefront of technological innovation. From self-driving cars to the use of AI and IoT, there’s a constant push towards enhancing user experience and efficiency. Investments in companies that lead in research and development can give significant returns as these technologies become mainstream.
  • Emergence of New Markets: While metro cities have traditionally been the main market for automobile sales, there’s a noticeable growth in demand from tier 2 and tier 3 cities. As cities grow and road infrastructure improves, these new markets present fresh opportunities.
  • Global Reach: Many Indian automobile companies have expanded their presence beyond domestic boundaries. Brands like Tata Motors and Mahindra have either established their manufacturing units abroad or have made strategic acquisitions. Such global expansions can enhance the profitability and resilience of these companies.

Share this article: 

Frequently Asked Questions

1. How do changes in fuel prices impact car sales in India?

Answer Field

There’s a strong link between fuel prices and how many cars are sold. When fuel gets more expensive, buyers often choose more fuel-saving cars or even different kinds of fuel. If fuel prices stay high, some might decide not to buy certain cars, like SUVs that use more petrol.
Are car companies from India going global? Indeed, some top car brands from India have started to become well-known in other countries. Big names like Tata Motors and Mahindra are not only exporting cars but also buying companies and forming partnerships in other countries. This lets them sell to more markets and not just rely on sales in India.

2. How is technology changing the automobile sector?

Answer Field

New technologies are reshaping the automobile world. As cars begin to drive themselves and incorporate more advanced features through AI and IoT, the boundaries between car makers and tech companies are becoming less clear. This new tech doesn’t just make cars work better and safer; it also makes driving a more enjoyable and seamless experience for users.

3. What effects are electric vehicles having on the industry?

Answer Field

The increasing interest in electric vehicles (EVs) is bringing about significant changes in the automobile industry. Traditional car makers are having to change their approach, putting more resources into research and shifting their production lines. It’s not just about making EVs. It’s also about providing charging stations, teaching consumers about these cars, and joining forces with tech companies to offer cutting-edge features.

4. Do economic troubles hurt the automobile sector?

Answer Field

Yes, the car industry is often affected by economic challenges. In tough economic times, people often spend less, which can mean fewer cars sold, especially luxury models. However, vehicles that are more affordable or essential might maintain their sales levels.

5. Why is R&D important in the car industry?

Answer Field

Research and Development (R&D) is vital in the car world. With changing technology and what people want from their vehicles, car companies need to keep updating and innovating. Through R&D, they can come up with new tech, designs, and make their existing cars even better. Also, with new rules around things like pollution and safety, R&D helps car makers meet these standards.

No Result Found

Read More Blogs

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading

Bajaj Broking App Download

7 Lac+ Users


4.3 App Rating


4 Languages


₹ 3800 Cr MTF Book