Currently, the automobile industry contributes a total of 7% to the GDP of India. India had taken around seven years to increase the annual production from 3 million to 4 million.
However, this was a tough phase for the automobile industry as it faced a massive downfall.
After speaking to the sources, we have come to know that the market though slightly better is still very unpredictable.
Currently, the government has started to understand and acknowledge the challenges which the automobile industry has been going through and eventually have started taking actions to help the automobile industry revive faster.
The rise of the automobile industry:
The automobile industry plans to show a significant rise by the start of 2021. Currently, the market for a passenger vehicle is the only market in the automobile industry which is growing rapidly.
The market for a passenger vehicle is speculated to show a significant growth not just specific to India, but also globally. There are several factors which will contribute to the rise of the automobile industry by 2021, which are:
Rapid Urbanisation: by 2030, the country speculates to have 500 million + people living which is exactly 1.5 times more than the population of the US. Hence, more of the population more will be the number of buyers.
Income Levels: Since the economy is doing better, the income levels of the consumers are also projected to rise.
Approximately 60 million, will have the potential to enter consuming class (defined as households with incomes greater than $8,000 per annum) by 2025.
Larger Workforce: There is speculation that the number of women and youth entering the working force will drastically increase.
Participation could reach 67 per cent in 2020, which will directly increase the demand for mobility.
Shortly, the demographic trends and macroeconomic are speculated to shift pockets of growth in the passenger-vehicle market.
Hatchback and mini cars will continue to maintain a dominant position in the industry. However, the maximum growth is speculated to come from newer segments such as compact SUVs, sedans, and luxury vehicles.
With the Automotive Mission Plan 2026, the automobile industry along with the government has a huge target to triple the revenue to $300 billion and expand exports sevenfold, to $80 billion.
Overall, the predictions about the automobile industry in 2021 seems to be very positive and convincing.