TREND ANALYSIS OF AUTOMOBILE SECTOR

INTRODUCTION

The automobile industry is one of the most important drivers of economic growth of India and one
with high participation in global value chains. The growth of this sector has been on the back of
strong government support which has helped it carve a unique path among the manufacturing sectors
of India. The automobiles produced in the country uniquely cater to the demands of low- and middle-
income groups of population which makes this sector stand out among the other automobile-
producing countries.
The industry consists of two major sub-sectors – The automobile industry (Original Equipment
Manufacturers industry or OEMs) and the auto components industry. The Indian automobile industry
was the 5th largest in the world in 2019-20 (SIAM, 2020) and consists of four primary segments:
passenger vehicles, commercial vehicles, two-wheelers and three-wheelers. India is, in fact, the
largest producer of 2-wheelers and 3-wheelers, 4th largest in 4-wheelers and 7th largest in light
commercial vehicle. India is a prime destination for many multinational automobile companies with
aspirations of business expansion in Asia. It attracted about US$ 14.48 billion (5.2% of total) in
cumulative FDI equity inflows between 2000 and 2015. The basic advantages that the country
provides as an investment destination include cost-effectiveness of operations, efficient manpower,
and a fast-growing dynamic market. In the past, major investments have come from Japan, Italy, and
the USA followed by Mauritius and Netherlands. The industry manufactures a wide range of products
to meet both domestic and international demands.India is one of the world's largest automobile
producers, with approximately 22 million vehicles manufactured during FY22. Globally, the country
is the fourth largest producer of passenger and commercial vehicles after China, the US and Japan.
Two-wheeler vehicles account for the largest share of the automobile industry, with close to 77%
market share as of FY22, driven by the growing middle-class population and a strong demographic
dividend. The automobile sector contributes one-third to the manufacturing GDP, and hence, is a key
driver of economic growth in the country. A strong engineering talent base with low-cost
manufacturing expertise helped India attract global manufacturers and become an export hub. Leading
manufacturers such as Maruti Suzuki India and Hyundai have utilised this opportunity to become the
country's first and second largest exporter of passenger cars, respectively. India is a major exporter of
automobiles worldwide, exporting 24% of total vehicles produced as of FY22. Indian automobile
exports comprise two-wheelers, three-wheelers, commercial vehicles and passenger cars The
automotive industry relies heavily on the auto components sector, which has played a noteworthy role
in its overall growth. At the national level, the sector has contributed 2.3% to the total GDP and
25.6% to India's manufacturing GDP. The sector directly employed 1.5 million individuals as per the
latest estimate published in February this year (IBEF, Feb 2023). Various initiatives from the
government for instance,Make in India, strong connectivity, availability of infrastructure and relations
with key trade partners have contributed to an increase in exports over the years.

IMPORT EXPORT DATA 2018-2023 AND ANALYSIS.

Figure 1: Automobile export trends India 2017-2023

Analysis: The importance of the automotive sector in terms of GDP contribution, employment as well
participation in Global Value Systems cannot be underestimated. Before delving into the specificities
of the current state of the automotive industry, it is pertinent to provide a very brief overview of the
export profile of the Indian automotive industry. Within the automobile sector, the two-wheeler
segment has accounted for the largest share (more than 70%) in automobile exports. In 2017-18, the
two-wheelers share was 69.6%, which only grew during the COVID-19 period. As would be argued
later, this segment was one of the primary drivers of recovery. Two wheelers share in 2020-21 and
2012-22 remained almost same at 79.4 and 79.1% and in 2022-23 dropped to 76.7%. Passenger
vehicles occupy the second position in terms of the share in exports but compared to passenger
vehicle it falls by a huge distance (less than 20%). Their already low share in total automobile exports
declined even before the pandemic from 18.5% to 14.6%between 2017-18 and 2018-19. India’s key
export destinations for two-wheelers are Nigeria, Nepal, Colombia, Bangladesh, Austria, Mexico,
Kenya, the Philippines and Uganda. Major export destinations of Indian automobiles include- the US,
South Africa, Mexico, Bangladesh, the UAE, Saudi Arabia, Turkey, Colombia, Brazil, Nigeria, Nepal,
Indonesia and the Philippines. According to the statistics provided by the Ministry of Commerce and
Industry, the US is a major export partner of India with close to US$ 3 billion in exports as of
financial year (FY) 2022, followed by Mexico (US$ 1.53 billion) and South Africa (US$ 1.21 billion).
In 2013, for motor cars and other motor vehicles (HS 8711), India’s three largest export destinations
were Mexico, South Africa and the UK while for motorcycles (HS 8704), they were Bangladesh, Sri
Lanka and Nepal for the auto components industry, India has been on the path to becoming a global
auto components hub. This is because India has a competitive advantage in several auto components
categories.

For the auto components industry, India has been on the path to becoming a global auto components
hub. This is because India has a competitive advantage in several auto components categories such as
shafts, bearings and fasteners, owing to a large number of players in the industry, which is expected to
lead to higher exports in coming years (IBEF. Within this sector, ‘drive transmission & steering’ and
‘engine components’ have dominated the exports as well as imports for a few years. In the FY2018-
19, they accounted for 54% of all exports and 49% of imports. This is followed by other products
such as engine components, electrical &electronics, and body/chassis/BiW, to mention a few that each
account for 10-12% of India’s auto components exports. The product composition of exports and
imports has remained virtually the same even in the current phase of recovery (2021-22) as shown in
Table 1.
The top destinations for component export (as per value) have been the US (25%), Germany (7%) and
the UK (5%) while major auto parts and components suppliers for import are China (27%), Germany
(14%), South Korea (10%), Japan (9%); the figures in the bracket show the respective nation’s share
in India’s auto components exports before the pandemic in 2018-19. In the FY2021-22, a similar
pattern was still visible, with China still accounting for the largest share in total auto imports (about
30%) followed distantly by Germany (11%). Thus, there has been an increase in the dependence on
China’s auto components imports in recent years. US, Germany and UK continue to be the top export
destinations in 2021-22.

Impact of the COVID-19 Pandemic

The onslaught of the COVID-19 pandemic led to the complete collapse of economic activities in the
country resulting in both supply and demand-side crises. The State’s response to the pandemic largely
constituted of putting in place a series of lockdowns as ‘containment measures’; the first lockdown in
March 2020 was one of the most stringent in the world. Consequently, both backward and forward
linkages of the automotive sector were disrupted suddenly and massively. The initial disruption
stemmed from the unavailability and rising prices of all raw materials and auto parts, for instance,
semiconductors, steel and shipping containers and shutting down supplier operations in the
automotive value system etc. After the phased lifting of restrictions, there was an acute shortage of
workers owing to the delayed return of migrant workers to the cities. This coupled with a global
semiconductor shortage, the effects of which were felt mildly in December 2020 and acutely in June
2021, led to a huge decline in automobile production despite the fact that the demand (especially the
external component of demand) had begun to revive. Exports also suffered from the domestic supply
side crisis, as well as due to restrictions and uncertainties in international markets particularly in
Europe and USA. Exports rose between 2018-19 and 2019-20 but nearly at one-fourth of the previous
year’s rate of growth primarily due to the deceleration in commercial vehicle exports (Annexure 2).
Thereafter, the export volume declined by 13% in 2020-21, stemming from a fall in passenger
vehicles and three- wheeler exports. Similarly, in the auto components sector, the rate of growth of
imports and exports declined from 11.3% and 12.6% in 2018-19 to -10.4% and -8.3% in 2020-21.

Road to recovery

The Indian auto industry since FY 2021-22 seems to be on the improvements across the majority of
axes in both the automobile and auto components sectors.For the automobile industry, as the global
economic conditions improved, the rate of growth of exports increased sharply from -13.1% in 2020-
21 to 36.1% in 2021-22. While the domestic sales continued to decrease in 2021-22 by 6.1%, the total
production in the sector recorded a positive rate of growth, although low at 1.2%, for the first time
since FY 2018-19. However, in absolute terms, both domestic production and sales have remained
below the 2018-19 levels, though exports rose by 10 million units in FY 2021-22 compared to 2018-
19.

An even greater recovery can be observed in the auto components sector - all axes crossed the pre-
pandemic marks in 2021-22 in absolute terms. The sector turnover increased sharply by 23.5% in
2021-22 compared to a -2.5% growth rate recorded in 2020-21. The industry is expected to record a
growth of 23% by the end of FY 2022-23 (Economic Times, 6 Mar 2023). A significant rise was also
recorded in exports and imports of auto components. As shown in Figure exports and imports
recorded a negative rate of growth in 2019-20 and 2020-21, but this figure rose to 43% and 36%
respectively in 2021-22. The recovery is also likely to continue into the current year. As per ACMA
(2023), in the first half of FY 2022- 23, exports increased by 8.6% and imports by 17%. In the
financial year 2021-22, the auto component industry in India achieved its largest trade surplus,
amounting to $700 million. This positive outcome can be attributed to prominent global automakers
adopting a "China Plus One" approach to mitigate supply chain risks stemming from the COVID-19
pandemic (Economic Times, 23 Aug 2022).

Here’s a look at some of the biggest two-wheeler manufacturers and their exports from India.
The Indian two-wheeler industry is one of the biggest in the world, and a prime example of this is just
the sheer number of motorcycles exported to international markets. For this particular article, we’ve
taken SIAM data for April-July 2022-23 and April-July 2023-24.
1. Bajaj Auto
Bajaj Auto, which is by far the largest exporter of two-wheelers from India, recorded 4,73,249 units
exported in April-July 2023-24 as compared to 6,83,410 units in April-July 2022-23. The homegrown
brand is far ahead in the leads when it comes to total number of exports to outside markets. In fact, Bajaj
is present in over 70 countries and also has plans to setup a new manufacturing unit in Brazil.

- Notable Exports: Pulsar range, Dominar, Boxer - Notable Export Markets: Colombia, Mexico,
Argentina, Guatemala, Peru, Turkey, Egypt

2. TVS Motor Company

TVS is in second position with total units exported in April-July 2023-24 standing at 2,73,480 as
opposed to 3,92,362 units in April-July 2022-23. Just like Bajaj Auto, TVS Motor Company has some
serious presence in international markets, as well. And if that wasn't it the BMW G 310 range of bikes
are built by them and exported globally.

- Notable Exports: Apache series, HLX series, Jupiter, Neo, Ntorq - Notable Export Markets: Ecuador,
Colombia, Honduras, El Salvador, Ghana, South Africa

3. Honda Motorcycle & Scooter India

Honda isn’t just a big name in the two-wheeler industry, but the four-wheeler industry as well. While
India remains the biggest two-wheeler market for the Japanese giant, it also utilises its manufacturing
facility to export some products. The Japanese automobile giants exported a total of 1,03,487 units in
April-July 2023-24, while April-July 2022-23 figures stood at 1,43,595 units.

- Notable Exports: Activa, Unicorn, CB 350, Shine, Hornet - Notable Export Markets: United States,
Japan, Afghanistan, Bangladesh, Bhutan, India, Maldives

4. India Yamaha Motor

Another Japanese giant exporting a fairly large number of two-wheelers from India is Yamaha. The
company exported a total of 61,846 units during April-July 2023-24, while the April-July 2022-23 figure
stood at 1,04,699 units.

- Notable Exports: FZ series, R15, MT-15, RayZR, Fascino - Notable Export Markets: Sri Lanka,
Bangladesh, Philippines, Brazil, Europe

5. Hero MotoCorp

The third homegrown Indian two-wheeler giant is Hero MotoCorp, which is one of the largest
manufacturers of two-wheelers in the world. During April-July 2023-24, the company exported a total of
55,430 units from the country. This figure stood at 76,922 units during April-July 2022-23.

- Notable Exports: Splendor, HF series, Passion, Glamour, Xtreme 160R - Notable Export Markets:
Mexico, United States, Bangladesh, Vietnam, Kenya, Colombia, Guatemala, Nepal

There’s our list of top bike exporters from our country along with some of the most notable countries
these major two-wheeler manufacturers export their products to and of course, the products themselves.
Another new trend is how India is also the destination of choice of for big brands to manufacture their
mass market products. It started with the KTM-Bajaj partnership, later TVS-BMW and quite recently
Harley-Davidson partnered with Hero MotoCorp and Triumph-Bajaj shocked the world with the Speed
400. Homegrown manufacturers have steadily spread their wings and grown their numbers over the
years, making Indians proud all around the world.
Passenger Vehicle Export Data.

Indian passenger vehicle exports grew by 15% in FY 2022–23 to 6,62,891 units.

14% of cars produced in India were exported in FY 2022–23 to several countries across the
world.

Maruti (39%) remained the biggest exporter of passenger vehicles, followed by Hyundai
(23%) and Kia (13%).

Japanese and South Korean passenger vehicle manufacturers contribute 88% of total exports
from India.

Despite three decades of presence, Indian passenger vehicle makers export contribution is
limited to a mere 2%.

The Nissan Sunny is the most exported passenger vehicle from India.

Total exports fell short of the highest period of 2016–17 by 13%. One of the major reasons
for lower exports is the exit of major American carmakers, GM and Ford, who stopped Indian
export operations completely in 2020 and 2022, respectively.

India Imports of Vehicles

Imports of Vehicles in India decreased to 2593.03 USD Million in 2023 from 7197.86 USD
Million in 2022. Imports of Vehicles in India averaged 2308.14 USD Million from 1996 until
2023, reaching an all-time high of 7197.86 USD Million in 2022 and a record low of 58.14
USD Million in 2016.
MARUTI SUZUKI VS HYUNDAI EXPORT COMPARISON OF PASSENGER
VEHICLE.
Indian passenger vehicle exports grew by 15% in FY 2022–23 to 6,62,891 units.Out of total
car produced in FY 2022-2023 14% of them were exported to several countries in the world.
Maruti (39%) remained the biggest exporter of passenger vehicles, followed by Hyundai
(23%).

MARUTI SUZUKI

Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is
India’s largest passenger car maker. Maruti Suzuki is credited with having ushered in the
automobile revolution in the country. The Company is engaged in the business of
manufacturing and sale of passenger vehicles in India. Making a small beginning with the
iconic Maruti 800 car, Maruti Suzuki today has a vast portfolio of 16 car models with over
150 variants. Maruti Suzuki’s product range extends from entry level small cars like Alto
800, Alto K10 to the luxury sedan Ciaz. Other activities include facilitation of pre-owned car
sales fleet management, car financing. The Company has manufacturing facilities in Gurgaon
and Manesar in Haryana and a state-of-the-art R&D centre in Rohtak, Haryana

Export Data.

 Maruti Suzuki has achieved record in FY2023 exports of 255,439 units. (FY2022: 235,670).

 Maruti Suzuki had 39% export share out of total passenger share exports for
FY2022:23.

 Maruti Suzuki passenger vehicle export had 8% growth compared to previous year.

 Out of the total production maruti suzuki export 14% of passenger vehicles.

 The company exports 18 models with the Jimny five-door SUV being the latest to join
the company’s export portfolio.

 At present, the Maruti Suzuki models with the highest export demand are the Dzire
sedan, the Swift, S-Presso and Baleno hatchbacks, and the Brezza SUV.

 In January 2023, the company shipped the first batch of the Maruti Suzuki Grand
Vitara SUVs to Latin America from Kamarajar Port.

 The company’s key export markets are Africa, Latin America, Asia, and the Middle
East.

The manufacturer aims to export the Grand Vitara to 60 countries across the Middle East,
Africa, Latin America and more.

HYUNDAI
Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of the Hyundai Motor
Company headquartered in South Korea. It is the third largest automobile manufacturer in
India. Hyundai India headquarters is located in Gurugram. HMIL is India’s first smart
mobility solutions provider and the number one car exporter since its inception in India.
Export Data

 Hyundai Motor exported 153019 units of passenger vehicle for FY2022-23.

 Hyundai had 23% export share out of total passenger share export for FY2022-23.

 Hyundai passenger vehicle export had 18% growth compared to previous year.

 Out of the total production Hyundai exports 21% of passenger vehicles.

 Currently, Hyundai Motor India exports 10 models: the Atos (Santro), Grand i10,
Xcent, Grand i10 (Nios) and Grand i10 (Aura), Elite i20, i20 Active, Accent (Verna),
Venue and Creta.

 Carmaker exports Made-In-India cars to Latin America, Africa, Asia Pacific and
Europe. In the APAC region, specifically in Saudi Arabia, both the Creta and Accent
are the respective leaders of their segments with 40 percent and 33 percent market
share, respectively. In Nepal, Hyundai is the leading brand in the overall passenger
car market with a market share of 29 percent. In Africa, specifically in Libya,
Hyundai says it is the No. 1 brand with 80 percent market share.

 Hyundai Motor India plans to manufacture 1.2 lakh units of the recently launched
sixth-generation Verna sedan in the coming year, of which almost 80,000 units or 66
percent of its total volumes will be for the export market.

Conclusion

Both the companies have good volume of exports but for FY 2022-23 Maruti remained the
biggest exporter of passenger vehicles, followed by Hyundai and Kia.As per above export
data we can say that between companies Maruti and Hyundai export of maruti is increasing
as per 2022-23 data.

ANALYSIS OF EV

Electric vehicles (EVs) in India have been gaining momentum due to various factors. The
country is striving to combat pollution, reduce dependency on fossil fuels, and meet
ambitious targets set for the adoption of electric mobility. Government initiatives, such as the
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, have
played a pivotal role in incentivising EV adoption through subsidies, tax benefits, and
infrastructure development.
Major automakers and startups have entered the Indian EV market, offering a range of
electric cars, two-wheelers, and commercial vehicles. The focus on indigenous manufacturing
and battery technology has increased, leading to collaborations and investments in research
and development.

However, challenges like high initial costs, limited charging infrastructure, and consumer
awareness persist. To address these, the government aims to expand the charging network,
provide financial incentives, and promote indigenous battery manufacturing to bring down
costs.

India's EV market is on a growth trajectory, with increasing consumer interest, technological

advancements, and supportive government policies. The nation's commitment to electric
mobility is evident, although sustained efforts are necessary to overcome existing challenges
and accelerate widespread adoption.

Companies manufacturing EV in India.

Several companies are manufacturing electric passenger vehicles in India, contributing to the
growth of the EV market. Some prominent manufacturers producing EVs in the passenger
vehicle segment include:

1. Tata Motors:Known for its Tata Nexon EV, one of the early electric SUVs in India, and the
Tata Tigor EV, catering to the compact sedan segment.

2. Mahindra Electric:Mahindra offers the eVerito sedan and the eKUV100, an electric variant
of its popular KUV100 compact SUV.

3. MG Motor India: MG entered the EV space with the MG ZS EV, an electric SUV that
gained attention for its features and range.

4. Hyundai: Hyundai launched the Kona Electric, an SUV offering a significant driving range
on a single charge.

5. Mercedes-Benz India:This luxury automaker introduced the EQC, marking its foray into
the electric vehicle segment in the country.

6. Ather Energy:Focusing on electric scooters, Ather Energy manufactures the Ather 450X
and Ather 450 Plus, both acclaimed for their performance and tech features.

These companies are contributing to the diversification of EV options in India, offering

various models across different price ranges and vehicle types to cater to the growing demand
for electric mobility.

Maruti Suzuki, one of the leading automobile manufacturers in India, has entered the electric
vehicle (EV) segment. While they haven't released a fully electric car for the mass market,
they have started testing EV prototypes and showcased their commitment to electric
mobility.Maruti Suzuki has announced plans to introduce electric vehicles in the Indian
market, aiming to tap into the growing demand for EVs. The company is likely to leverage its
expertise in manufacturing and understanding of the Indian automotive market to develop and
introduce electric cars in the future.
Export of EV

India had started making strides in exporting electric vehicles (EVs) to various international
markets. However, the export volume of EVs from India was not as significant compared to
traditional internal combustion engine vehicles.

Indian EV manufacturers like Mahindra Electric and Tata Motors had initiated exporting
electric cars to certain countries, primarily focusing on neighbouring nations and select
international markets. These exports primarily comprised electric cars and electric SUVs.
The export of electric vehicles from India was still in its early stages due to various factors,
including:

1.Domestic Demand: Initially, manufacturers focused on meeting the growing demand for
EVs within the domestic market before significantly scaling up their export operations.

2.Infrastructure and Technology: Developing a robust charging infrastructure both

domestically and in target export markets and enhancing technology and battery capabilities
were crucial factors influencing export growth.

3.Government Support: Continued government incentives, policies, and collaborations with

manufacturers to encourage EV production for export markets were essential for expanding
the export footprint.

India’s goal to become a global manufacturing hub for electric vehicles was aligned with its
vision of boosting clean and sustainable mobility. The government’s support through
initiatives like the Production-Linked Incentive (PLI) scheme aimed to enhance
manufacturing capabilities and promote exports, which might have further catalysed the
export of EVs from India since then. For the most current and detailed information on the
export volume of EVs from India, accessing recent trade data or industry reports would
provide the latest insights into this evolving landscape.

BIOFUEL VS CRUDE OIL AND ITS IMPACT ON TRADE

Biofuels and crude oil play significant roles in India's energy landscape and have implications
for trade and sustainability.

Crude oil, being a major source of energy, has a substantial impact on India's trade balance as
the country heavily relies on oil imports to meet its domestic energy needs. Fluctuations in
global crude oil prices directly affect India's import bills, impacting the economy and trade
deficits.

Biofuels, on the other hand, are renewable and environmentally friendly alternatives to fossil
fuels. India has been promoting biofuels like ethanol and biodiesel as part of its energy
diversification strategy. This includes blending ethanol with petrol and biodiesel with diesel,
which helps in reducing the reliance on imported crude oil and contributes to lowering
greenhouse gas emissions.
The promotion of biofuels also has the potential to positively impact India's agricultural
sector by creating additional income opportunities for farmers through the cultivation of
feedstock crops used in biofuel production.

In terms of trade, the development and utilisation of biofuels could potentially reduce India's
dependency on crude oil imports, leading to a more balanced trade scenario by decreasing the
import bills associated with fossil fuels.

However, challenges exist in scaling up biofuel production to meet the country's energy
demands, including concerns about land use, feedstock availability, and technological
advancements. Balancing the use of biofuels with other renewable energy sources and
conventional fuels is crucial for India's sustainable energy future and its trade dynamics.

Impact of Biofuel and Crude oil on trade.

Biofuels and crude oil have distinct impacts on India’s trade dynamics:

Crude Oil:

1.Import Dependency: India heavily relies on crude oil imports to meet its energy demands. It
is one of the largest importers of crude oil globally. Fluctuations in global crude oil prices
directly impact India’s import bills and trade deficit.

2.Trade Balance: Since crude oil imports constitute a significant portion of India’s overall
import bill, fluctuations in oil prices affect the country’s trade balance. Higher oil prices can
lead to increased import costs, impacting the trade deficit and overall economic stability.

3.Economic Impact: The cost of crude oil imports affects India’s fiscal health and inflation
rates. Higher oil prices often result in increased fuel costs domestically, impacting various
sectors of the economy, including transportation and manufacturing.

Biofuels:
1.Reduced Import Dependency: The promotion of biofuels like ethanol and biodiesel helps
reduce India’s dependency on imported crude oil. Increased domestic production of biofuels
decreases the need for importing fossil fuels, positively impacting the trade balance.

2.Agricultural Sector: Biofuel production often involves using agricultural feedstock. This
creates an additional income stream for farmers, potentially benefiting the agricultural sector
and rural economies.

3.Environmental Impact: Biofuels are considered more environmentally friendly compared to

fossil fuels, as they produce fewer emissions. Their adoption contributes to India’s efforts to
mitigate climate change and reduce pollution.

The use of biofuels in India aims to address energy security concerns, reduce carbon
emissions, and create a more sustainable energy mix. While biofuels currently constitute a
smaller portion of India’s overall energy consumption compared to crude oil, their role is
expected to grow as the country focuses on cleaner and more sustainable fuel alternatives.
This shift may impactIndia’s trade dynamics by decreasing the reliance on crude oil imports
and fostering a more balanced trade scenario in the long term.
Biofuel vehicle sales (Ethanol)

Vehicles specifically designed to run on ethanol as a primary fuel source weren’t widely
available in the market. However, flex-fuel vehicles capable of running on blends of ethanol
and petrol have been manufactured by several global automakers.

In Brazil, for instance, where ethanol fuel is more prevalent, some automakers produce flex-
fuel vehicles that can run on varying blends of ethanol and gasoline. Brands like Fiat,
Volkswagen, Chevrolet, and Ford have manufactured flex-fuel cars for the Brazilian market.

In India, the focus has been more on promoting the use of ethanol blends in existing vehicles
rather than manufacturing vehicles exclusively for ethanol. Indian automakers have been
modifying existing vehicles to run on ethanol-blended fuels to promote the usage of biofuels.

The development and production of vehicles specifically designed to run solely on ethanol as
the primary fuel source might vary based on government policies, advancements in biofuel
technology, and the demand for such vehicles in the market.

CONCLUSION

India’s automobile sector has been a dynamic and evolving industry with both challenges and
opportunities. As of my last update in January 2022, here’s a summary:

1. Growth Trajectory: The sector showcased resilience and adaptability despite facing
challenges like economic fluctuations, regulatory changes, and supply chain
disruptions. India remained a global hub for manufacturing, with a focus on diverse
segments, from compact cars to SUVs.

2. Shift towards Electric Vehicles (EVs): The push for electric mobility gained traction
with increased awareness about environmental concerns. Government initiatives,
including subsidies and incentives, aimed to promote EV adoption. Several
automakers began introducing EV models, signaling a shift toward sustainable
transportation.

3. Exports and Global Presence: Indian automakers expanded their global footprint,
exporting vehicles to various markets worldwide. Companies like Tata Motors,
Maruti Suzuki, and Mahindra made strategic moves to increase their presence in
international markets.

4. Challenges: The sector faced challenges related to regulatory compliance, fluctuating

raw material costs, and the need for technological advancements to meet global
standards. The transition to BS-VI emission norms and the COVID-19 pandemic
added complexities to operations and production.

5. Innovation and Collaborations: Automakers focused on innovation, introducing new

features and models to cater to changing consumer preferences. Collaborations
between companies and technology firms aimed to enhance vehicle technology,
including connectivity and autonomous capabilities.
 6. Future Prospects: The industry’s future relied on advancements in EV technology,
sustainable manufacturing practices, and a robust ecosystem for electric vehicles,
including charging infrastructure. Additionally, adapting to evolving consumer
demands for connectivity, safety, and convenience remained crucial.

Overall, the Indian automobile sector showcased resilience amid challenges while embracing
innovation and sustainable practices, signalling a promising yet transformative path toward a
more advanced, eco-friendly, and tech-savvy automotive landscape.

The Indian government has implemented various initiatives and policies to bolster the
automobile sector:

1.Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME): Launched to
promote the adoption of electric and hybrid vehicles, FAME provides financial incentives,
including subsidies, to manufacturers and buyers. It aims to encourage the production and
purchase of electric vehicles, focusing on reducing air pollution and promoting sustainable
mobility.

2.National Electric Mobility Mission Plan (NEMMP): Introduced to encourage the adoption
of electric vehicles and achieve national goals for reducing emissions. NEMMP aims to
enhance manufacturing capabilities for EVs, develop charging infrastructure, and create a
favourable environment for EV adoption.

3.Automotive Mission Plan (AMP): This long-term government policy aims to make India a
globally competitive automotive hub by fostering growth in the industry. The plan focuses on
promoting R&D, fostering innovation, improving infrastructure, and enhancing
manufacturing competitiveness.
4.Vehicle Scrapple Policy: Introduced to phase out old and polluting vehicles from the roads,
this policy incentives the scrapping of older vehicles by providing benefits such as discounts
on new vehicle purchases and addressing environmental concerns.

5.Production-Linked Incentive (PLI) Scheme: Extended to the automobile and auto

component sectors to enhance manufacturing capabilities and promote the production of
high-value goods domestically. The scheme offers financial incentives to manufacturers to
boost production and export capabilities.

6.BS-VI Emission Norms: The implementation of Bharat Stage VI emission norms aimed to
reduce vehicular pollution by mandating stricter emission standards for vehicles. This move
led to a significant shift in vehicle technology and fuelled the development of cleaner, more
efficient engines.

These initiatives reflect the government’s efforts to promote sustainable practices,

technological advancements, and growth in the automobile sector while addressing
environmental concerns and enhancing India’s global competitiveness in automotive
manufacturing.