The last couple of years have been particularly interesting for the automobile sector in India, as the industry witnessed multiple changes in production and investment. The coronavirus pandemic caused an unprecedented disruption in the growth of the industry, and while the overall sales numbers were impacted, the projections for the future are indeed promising. The star of the sector was most definitely the two-wheeler segment. With a mammoth 81.2% of the market share, the two-wheeler segment is easily the biggest one in the sector and has continued that way through the pandemic. Despite the severe decline in sales in FY20 and FY21, the 2-wheeler segment is projected to grow by nearly 10%, according to the ratings agency Crisil. The strength shown by the segment through a crisis that adversely impacted the whole industry is encouraging for manufacturers, as is the influx of electric vehicles and the impending electric boom the market is predicted to experience in the coming years. The entry of Mahindra & Mahindra into the segment was an event of note, with the Indian auto- mobile giant’s subsidiary Classic Legends re-introducing the legendary Jawa and Yezdi labels in India, 25 years after they stopped manufacturing due to financial constraints. The other segment that has seen an upward trend has been the commercial vehicle segment. While the second quarter has been less than optimal for two years in a row, the third quarter in 2020 saw the segment record a historic recovery by 314% according to statistics provided by the Autobei Consulting Group. Tata Motors maintained their dominance in the segment with 42.3% of the market share. Mahindra & Mahindra maintained second spot with 27.47% while Maruti Suzuki failed to meet expectations with just 5.2% of the market. The incoming electric revolution has everyone on the edge of their seats. Automobile man- ufacturers have already begun adding crossover hybrids and electric versions of available models, such as Tata Tigor Ziptron. Higher end companies have also started introducing their electric fleets in the country, with the likes of Porsche, Audi and BMW introducing multiple electric variants of their cars. This is consistent with the development of the electric infrastructure in the country, with the government at both state and national level signing deals with private companies to develop the infrastructure in the country. Schemes such as Faster Adoption and Manufacturing of Hybrid and EV scheme phases I and II, colloquially referred to as FAME, introduced by the Central Government of India seek to subsidize the manufacturing of hybrid and electric vehicles. States ad territories like Tamil Nadu and Delhi have also signed deals, with Tamil Nadu most significantly signing a Memorandum of Understanding with Ampere Electric, announcing an investment of Rs 700 crores over the next 10 years.
10 May 2022
Adarsh Tripathi
