The Indian auto industry has emerged as one of the world’s largest, with annual sales of 19.8 million vehicles recorded in FY15, an Ernst & Young study has said. It produced 23.4 million vehicles during the period. With this kind of growth, passenger vehicle density is expected to become 1.5 times by 2020.
Some of the major factors that would take for India to become a world-class auto manufacturing hub, including a stable and supportive regulatory environment and initiatives to improve the ease of doing business. Advancement of BS VI norms, likely rollout of the `End of life’ policy, Road Transport and Safety Bill, international safety standards from 2017 etc are the other factors, it added.
Commenting on the findings of the report, Rakesh Batra, partner & national leader – automotive practice, EY India, said, “The Indian automotive industry is witnessing testing times. The market continues to experience volatility and we are waiting to see clear signals of revival in growth. With the government and the judiciary taking steps to make transport cleaner and safer, there is some degree of uncertainty for automakers, especially regarding the fuel mix and the necessary investments for technology upgrades. We believe that these are just short-term challenges as the long-term growth story for the automotive industry in India remains intact.”
As per SIAM’s Automotive Mission Plan 2026, the auto industry to become the engine of the Make in India initiative. The automotive sector is expected to create 15 million direct jobs by 2022.
Auto components segment contributes 50% to the sector’s direct employment. Skill development of the large talent pool is seen as the most critical lever in delivering manufacturing excellence, the report said.
A strong focus on developing transport infrastructure is essential to develop India as a manufacturing hub.