Automotive Industry in India

India produced 22.65 million automobiles in FY21, with 13 million of those built between April and October. The two-wheeler category dominates the industry in terms of volume due to a growing middle class and a substantial portion of India's population being young. Furthermore, the sector's expansion was assisted by companies' increased interest in investigating rural markets.

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India is a major automobile exporter with promising growth prospects in the next years. Furthermore, by 2022, India is expected to be at the forefront of the global two- and four-wheeler markets, thanks to a number of government and major vehicle manufacturer efforts.

India's automobile sector is booming, thanks to the country's growing economy and technological advancements. Many enterprises and commercial ideas have flourished as a result of their efforts. If India's transportation system comes to a halt, the automobile industry would suffer; as a service provider, they keep our economy from imploding. The Indian Automobile Manufacturers' Society is the crown jewel of the transportation industry, with a plethora of career opportunities and economic opportunities. The automotive industry is a Pandora's Box for many smart and creative enterprises.

Market Size

All categories grew in calendar year (CY) 2021, with overall sales increasing 5.8% to 18.49 million units, compared to 17.47 million units in January-December 2020. From 2.43 million units in CY20 to 3.08 million units in CY21, passenger vehicle sales climbed by 26.6 percent to 3.08 million units. The total number of commercial vehicles sold was 677,119, up 34% from the previous year's figure of 505,102. The total number of passenger vehicles produced in FY21 was 22.65 million. The domestic Indian car market is dominated by two-wheelers and passenger automobiles. Small and mid-sized cars account for the majority of passenger car sales. In FY21, two-wheelers and passenger cars accounted for 81.21 percent and 14.56 percent of the market share, respectively, with almost 17.8 million vehicles sold.

Total passenger vehicle*, three-wheeler, two-wheeler, and quadricycle manufacturing totaled 1,860,809 units in January 2022. The luxury automobile market sold 2,259 units in December 2021, representing a YoY increase of 19.7%, with Mercedes Benz being the most popular luxury car manufacturer. In the third quarter of FY22, passenger vehicle sales totaled 761,124 units. Automobile exports increased at a CAGR of 3.47 percent from FY16 to FY21, reaching 4.13 million units. The majority of India's exports were two-wheelers (79.38 percent), passenger vehicles (9.79 percent), and three-wheelers (9.52 percent). In the year 2021, 3680 premium motorcycles were sold in India. This represents a 21% increase over the 2020 figures.

Electric vehicle (EV) sales hit a new high of 5,592 units in the third quarter of FY22. Overall, 329,190 electric vehicles were sold in India in 2021, representing a 168 percent increase over last year's 122,607 units. India's EV finance sector is expected to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030, according to NITI Aayog and Rocky Mountain Institute (RMI). According to a survey by the India Energy Storage Alliance, the EV market in India is expected to grow at a CAGR of 36% until 2026. Additionally, the EV battery industry is predicted to grow at a 30 percent CAGR during the same time period.

How to Start Automobile Business in the Automotive Industry in India:

Know who you're dealing with (KYC):

To start an automobile spare parts business, you must first analyze the market. A successful business person should be able to read his or her consumers' thinking. Customers' demands should be emphasized, and the services provided should complement them.

• Make a blueprint for your company: Every business strategy should have a road map, which should be written out in the first place. The blueprint's goal is to help the entrepreneur realize his or her motivation and goal. It assists the company in staying on track with its vision and objectives.
• Business plan: It is important to have a company plan that is best suited for the market they are catering to in the vehicle spare parts sector. Every market has its own characteristics, thus their demands and expectations differ.
• Knowledge of the industry: The vehicle spare parts industry is not something that can be mastered by edict. Industry knowledge is critical, and being informed about it is a must for starting a firm. The intricacies and techniques of the profession can only be learned via experience.
• Finance: Due to the sorts of machinery and labor required for their operation, vehicle spare parts firms should ideally require more cash. The books of accounts must be kept up to date on a regular basis. The cost of starting a business is determined by the amount of money needed for day-to-day operations.
• Store address: Geographic location is critical to the success of any vehicle spare parts business. Their retail store's location can be a huge plus.
• Business registration: To get started in the automobile spare parts business, you must first register your company. To conduct themselves, they must first obtain a license. Register your business under the Shops and Establishments Act as well.
• Make or obtain spare parts: Some may manufacture spare parts, although the majority are purchased wholesale and retail from the original brand.
• Human capital/resource: Finally, the spare parts industry requires human resources to continue to operate. As a result, they must be used appropriately.

Reasons to Invest

• By 2026, India is predicted to overtake China and the United States as the world's third-largest automobile market in terms of volume.
• India's "Make in India" policy has been instrumental in improving the country's standing.
• The International Centre for Automotive Technology (ICAT) is a world-class automotive testing, certification, and research and development facility supported by the Government of India's NATRiP (National Automotive Testing and R&D Infrastructure Project). ICAT is located in Manesar, India's northern automotive hub.
• The car industry currently accounts for 14-15 percent of India's GDP; the government of India hopes to boost this to 25-30 percent by 2020
• The Government of India has picked nine expressways along which 6,000 charging stations have been approved, with a further 3,000 expected to be erected soon to alleviate the problem of charging in electric vehicles.
• Under the PLI Scheme, the government of India is providing support for up to INR 362 crore per gigawatt in the EV sector.
• India's vehicle sector, which is currently valued at INR 7.5 lakh crores, is expected to quadruple in size to INR 15 lakh crores in the next five years.
• India's banks and non-banking financial companies (NBFCs) have the potential to reach a market size of INR 40,000 crore (USD 5 billion) by 2025 and INR 3.7 lakh crore (USD 50 billion) by 2030 for electric vehicle (EV) financing.

BIS (Bureau of Indian Standards)

The Bureau of Indian Standards prepares Indian Standards for the Automotive Industry (BIS). The AISC standards are also transformed into Indian Standards by the BIS. CMVR-TSC considers the standards developed by both BIS and AISC for implementation.

Standing Committee on Implementation of Emission Legislation (SCOE) 

The challenges surrounding the application of emission rules are discussed in this committee. The following are the main responsibilities of this committee:

• To talk about future emission and noise regulations.
• Advising MoRT&H on vehicle standards in use
• To complete the test methods and the emission norms implementation strategy.
• Provide recommendations to MoRT&H on any issue relevant to the implementation of emission and noise rules.

IRAI/ARAI Certification / AIS Certification

Under Rule 126 of the Central Motor Vehicle Rules, 1989, the Government of India has selected ARAI as one of the key testing and certifying authorities. The Automobile Research Association of India (ARAI) is the country's largest automotive R&D organization, created in 1966 by the automobile industry in partnership with the Indian government.

The Automotive Research Association of India (ARAI) offers a wide range of certification and homologation services for automobiles, systems, and components. In addition, ARAI assists automobile manufacturers with export homologation. Singapore, the Netherlands, and Australia's international certification authorities have recognized ARAI for conducting testing in compliance with their requirements.

The Automobile Industry Standard (AIS) is an Indian automotive technical standard. AIS Certification was mandated by the Central Motor Vehicle Act of 1989.