Indian Auto Industry Surpasses Rs 8.7 Lakh Crore Revenue Milestone in FY23

The Indian automobile industry has made significant strides in the fiscal year 2023, generating a staggering revenue of Rs 8.7 lakh crore, according to the 'India Automobile Sector Value Report' by Primus Partners, a renowned management consulting services firm. This industry employs a massive workforce of over 1.9 crore individuals in India.

The report highlights that the total vehicle production reached an impressive 2.7 crore units during FY23. Among the various segments, the passenger vehicle (PV) segment emerged as the leading contributor, accounting for 58% of the total value at Rs 5 lakh crore. The two-wheeler segment followed closely with a contribution of 21%, equivalent to Rs 1.8 lakh crore. The commercial vehicle (CV) segment contributed 19% at Rs 1.7 lakh crore, while the three-wheeler segment had a modest 2% share amounting to Rs 17,000 crore.

In the passenger vehicle (PV) segment, the mid-size SUV and full-size SUV sub-segments stood out, collectively representing more than half of the segment's value. The compact sub-segment contributed 25% of the value, whereas luxury vehicles made up 13%.

The report explains that smaller car models and sedans are losing popularity among consumers, resulting in a lower share in terms of value. The dominant players in this segment include Maruti, Hyundai, Tata, Mahindra, Kia, Toyota, Honda, and Volkswagen.

When considering production figures, the two-wheeler segment claimed the largest share with 77%, manufacturing 2.05 crore units. The PV segment accounted for 16% of production, producing 43.91 lakh units. The CV segment stood at 4% with 10.36 lakh units, and the three-wheeler segment contributed 3% with 8.56 lakh units.

Anurag Singh, the Managing Director of Primus Partners, emphasized the valuable insights gained from their comprehensive study on the automobile industry. The Indian market, he noted, is increasingly favoring feature-rich, higher-priced vehicles over their lower-priced counterparts. Singh believes that the industry's value growth is outpacing volume growth, indicating a shift in consumer preferences.

The report underscores the transformative impact of electrification, alternative green power trains, electronic components and software, autonomous driving, and shared mobility on the industry. These unprecedented changes are reshaping the automotive landscape. Understanding where the value lies and how it will evolve becomes crucial in navigating this rapidly evolving industry landscape.