India’s car industry is poised for significant expansion in the coming years. According to Moody’s, India is projected to lead Asia in car sales growth, outpacing even China, with a compound annual growth rate of 3.5% and total annual sales estimated to reach 5.1 million units by 2030. This marks a substantial increase from the 4.2 million units sold in 2024.
Moody’s has forecast that India will register the fastest car sales growth in Asia, with a CAGR of 3.5% up to 2030. With sales rising from an average of 3.1 million units in the past decade to 4.2 million in 2024, the country is on track to reach 5.1 million units by 2030. This would represent a growth of nearly 25% from current levels.
A major driver of this growth is the expected shift from 2-wheelers to entry-level cars. Moody’s anticipates that if 9% to 10% of India’s 2-wheeler users upgrade, it could generate replacement demand for an additional 1.6 million to 1.8 million vehicles by the end of the decade. This shift reflects broader changes in consumer aspirations and rising disposable incomes.
Despite electric vehicle (EV) penetration in India currently standing at just 2%, carmakers are heavily investing in EV and battery infrastructure. Indian automotive firms have announced cumulative investments of ₹85,420 crore ($10 billion) into lithium-ion cells, EVs, and battery manufacturing, highlighting a clear strategic pivot towards a more sustainable future.
Foreign carmakers continue to dominate the Indian market, with Japanese, Korean, and Chinese brands together accounting for over 70% market share. However, Indian manufacturers have expanded their presence significantly. Tata Motors and Mahindra & Mahindra, which held 11% of the market in 2015, increased their share to 24% by 2024. In contrast, Japanese automakers’ collective share fell from 61% in 2015 to 51% in 2024.
Read More: India’s EV Fleet Could Hit 123 Million by 2032!
India’s automotive industry has grown 60% since 2015, with sales increasing from 2.6 million units to 4.2 million in 2024, making it the 3rd-largest car market globally after the United States and China. Yet, with only 44 vehicles per 1,000 people — far below Japan (502), Korea (422), and China (251), India still has significant room to grow.
India’s combination of a young population, low vehicle ownership, rising incomes, and growing EV investments places it at the heart of future automotive growth in Asia. While challenges remain, the long-term outlook is defined by opportunity and transformation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 29, 2025, 2:02 PM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
