India’s auto industry achieves milestone Indicates bright economic future

With the decline in the production of various goods and resources around the globe, several financial analysts have started making predictions for the year 2023. In addition, 2022 saw many global companies laying people off, one of the reasons for negative growth rates for economies worldwide. Consequently, the third and final quarter of the year ending 2022 saw many companies failing to fare well in their reports.

Amidst all the drama in the stock market and crypto exchange, one sector was a bright spot. The Indian automobile industry surpassed Japan and became the third-largest automobile market in the world. However, the sector went through many hurdles until 2020, which was also one of the most challenging times for the industry due to the pandemic-induced slowdown.

Automobile domestic sales trends

*All of the data is from SIAM reports from 1994-2020

 

This report has given a new direction to the market predictions for 2023, as many financial pundits have already started to compare it to the 2008-09 economic slowdown. However, the trajectory of the economic growth of India can be affected by many reasons.

Investors around the globe are eyeing the large market in India and gauging the appropriate time to enter it. When globalization and FDI were brought to India, the idea was to build the country with better services and technology. India has now started to move towards the export of technology and human resource at a global level.

China is a dominant manufacturing sector, generally referred to as the “world’s factory”. But the current Covid crisis has led to a widespread shutdown of manufacturing activity in its factories. The world is looking for an alternative to China, and India stands out as the only viable option. The purchasing power of the Indian consumer has witnessed a rise in recent years, which is evident in brands setting up their shops here, apple being one among them. With China struggling with managing its healthcare crisis triggered by the coronavirus pandemic and experiencing a fall in economic activity, India will likely emerge as a beacon of hope for the countries in the Global South and the world at large.

sales comparison of passenger vehicle and commercial vehicle

*All of the data is from SIAM reports from 1994-2020

We can see that as per analysis from reports shared by SIAM for the period of 1994-2020, the growth in the automobile industry has been exponential. May it be the commercial vehicle segment or the passenger vehicle both have grown to surpass the expectations of the investors and stakeholders. The advanced technology in production and manufacturing units has definitely been one of the key factors behind the tremendous growth. The markets in India have huge potential to fight economic slowdown and one should not just look at the current trends but have a holistic view.

 

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