In fiscal year 2017, the gross value added from the road transportation sector was the highest across India at around 3.6 trillion Indian rupees. Expansion of road network coupled with sustained economic development, led to a rapid increase in the total number of vehicles across the subcontinent. The sector includes two-wheelers, trucks, cars, buses, three-wheelers and more that play a crucial role in economic development of the country.
In terms of progress, the growth has been immense. The country had a production capacity of around 35 million vehicles in 2017. It was the largest manufacturer of tractors and second largest bus manufacturer in 2020. India was the also the largest producer of two and three-wheelers across the globe. Hero MotoCorp was the leading two-wheeler manufacturer. In 2019, the company sold around 7.8 million units domestically. In fiscal year 2019, passenger vehicle sales had a growth of about 2.7 percent. The market was dominated by Maruti Suzuki with a share of over 50 percent in the segment. The company became the only manufacturer to sell over 20 million passenger vehicles cumulatively. Commercial vehicles registered the highest growth that year at about 17 percent. Tata Motors held a strong command of over 40 percent in the segment. Mahindra & Mahindra, Ashok Leyland and Eicher Motors were other players in the market.
The problem of decreasing air quality and increasing congestion has been a cause for concern within the automotive industry. India featured repeatedly in the list of most traffic congested as well as most polluted cities in the world. The government took a number of measures to deal with the increasing pressure from NGOs and environmental groups. New emission standards were released and the taxes on electric vehicles were reduced by a good margin as opposed to conventional vehicles. With the country on its way to overtaking China to become the most populated, the amount of traffic on narrow, partially developed roads could likely be a constant grapple. The increasing number of vehicles has indeed been an indicator of a burgeoning middle class, but sustainability is the need of the hour and it remains to be seen how much this aspect will help India’s automotive sectors.