Indian Automobile Industry Aims for US$ 1 Trillion in Exports by 2035

Last Updated on June 30, 2024 by SPN Editor

The Indian automobile industry is poised for a remarkable transformation with the objective of becoming a global export hub worth US$ 1 trillion by 2035. By fostering investments and collaboration, India can pave the way to emerge as a global automotive hub with a clear vision of achieving the target in exports by 2035.

With the inroads of global giant companies like Tesla in the Indian automobile industry sector, the future for this industry is bright.

The Indian automobile industry stands at a critical juncture, gearing up for substantial growth and expansion. As per a report by Arthur D Little, the industry has set its sights on becoming a US$ 1 trillion export-led powerhouse by 2035.

This ambitious vision reflects the sector’s determination to harness its strengths in manufacturing, innovation, and technology leadership to capture global markets.

Barnik Chitran Maitra, Managing Partner (India & South Asia) at Arthur D Little, envisions the Indian automobile industry as a global hub for automotive design, development, and production, catering to international markets. To materialize this vision, industry stakeholders must enhance their capabilities to ensure reliable and competitive global manufacturing.

India’s strengths in automotive software and engineering research and development (ER&D) position it favorably in the global automotive landscape. The country is well-equipped to provide solutions aligned with emerging trends like zonal architecture and Advanced Driver Assistance Systems (ADAS).

India also boasts a thriving, well-funded startup ecosystem, which holds the potential to make significant contributions to automotive innovation.

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The global automotive research and development (R&D) and software market are anticipated to triple in size by 2030, reaching US$ 400 billion. India, often referred to as the “software hub of the world,” can capitalize on this growth. It has the opportunity to become the preferred offshore destination for software-related activities in the automotive industry.

Realizing India’s automotive sector’s full potential necessitates a collaborative effort among all stakeholders, including the government, industry players, and other relevant entities.

In recent developments, Tesla, under the leadership of Elon Musk, has expressed its intention to establish a factory in India to produce affordable electric vehicles (EVs) tailored for the local market and exports. This move demonstrates Tesla’s commitment to contributing to India’s automotive landscape and making substantial investments in the country.

Toyota Motor is planning to construct a third car manufacturing plant in India, marking the first expansion of production capacity in over a decade. The new plant, with an initial capacity of 80,000-120,000 vehicles per year, could eventually reach 200,000 units. Toyota’s investment is driven by its partnership with Suzuki Motor, which has resulted in increased domestic volumes.

Hyundai Motor India (HMIL) has inked an agreement with Tamil Nadu to invest approximately Rs 20,000 crore over ten years, focusing on expanding electric vehicle (EV) production and associated infrastructure.

HMIL intends to establish a battery pack assembly unit with an annual capacity of 178,000 units and deploy 100 EV charging stations across the state within five years. This investment underscores the company’s dedication to transitioning into the EV market.

The Indian automobile industry stands on the brink of a significant transformation, with the goal of achieving US$ 1 trillion in exports by 2035. Leveraging its strengths in manufacturing, software, and innovation, India aims to become a global automotive hub.

Collaborative efforts among stakeholders, including the government and industry players, are imperative to realizing this vision.

With global automotive giants like Tesla and Toyota expressing interest in India, the Indian automobile industry is poised for substantial change, presenting a host of opportunities and challenges.