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An Important Economic Growth Driver
Changing consumer habits and industry dynamics are creating a clear path of progress for the Indian auto sector, making a much wider impact
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The automobile industry is one of the most important drivers of India’s economic growth and one with high participation in global value chains. The growth of this sector has been on the back of strong government support which has helped it carve a unique path among the manufacturing sectors of India. India is a prime destination for many multinational automobile companies with aspirations of business expansion in Asia.
The role of foreign presence in the passenger vehicle segment grew much more than all the other segments of automobiles, followed by the multi-utility vehicle segment. A growing working population and an expanding middle-class have been the key demand drivers for automobiles in India. Factors like increasing disposable incomes in the rural agriculture sector, the presence of a large pool of skilled and semiskilled workers, and a strong educational system will continue to increase vehicle demand in future.
Despite the ongoing Covid, the Indian automotive industry seems to overcome most of the consequent challenges, and many are now in the rearview mirror. We believe that today every individual wants to travel safely with his or her loved ones. This generated the need for a personal vehicle in every household.
We also see that today many young entrepreneurs come with a fancy lifestyle and a passion to have a dream car added to their checklist. Also, in tier 2 and tier 3 cities, owning these brands is in a higher percentage as with recent growth and better infrastructure, people tend to switch for a better lifestyle and enjoy fancy cars in their collection.
The big play
Industry participants are now beginning to see a clear highway, where they can push on the gas, accelerate, and go into a higher gear. With the help of digitalisation, it has become easy to bring buyers and sellers on one single platform with a variety of brands available, where one even gets assurance on aspects such as quality, genuineness, documentation and a hassle-free buying experience.
This helps to make this sector more organised, enabling these brands to reach out and engage customers on a larger scale.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.