According to INDIA Brand Equity Foundation (IBEF) report, INDIA is currently the fourth largest automobile market and the seventh largest automotive manufacturer in the world. It is expected to become the world’s third largest auto market by 2021. The past seven years has seen an increased annual production of vehicles by one million, culminating in four million vehicles last year (that is, 2019). The market is expected to get stronger by the day, both with regard to domestic demand and exports, backed by the presence of established domestic and international Original Equipment Manufacturers (OEMs).

The past few years has also seen continuous regulatory pressures to stop environmental hazards associated with internal combustion engines (ICEs) coupled with the availability of advanced technologies for electric power-trains and storage systems (batteries, etc) to facilitate better functionalities and enhanced demand for electric vehicles (EVs) worldwide.

The Indian auto industry too likewise has been gravitating towards EVs and other sustainable options, with the availability of low-cost lithium-ion batteries and such likes. The Government initiatives too are encouraging the use of EVs and build INDIA into an R&D hub, with incubation centres for start-ups working in the EV space.


A passenger vehicle (PV) is referred to as a motor vehicle with at least four wheels and where no more than eight seats are allowed in addition to the driver’s seat for transporting the passengers. Generally, CARS are considered as passenger vehicles.

In INDIA, the small and mid-sized cars hold the highest position in terms of sales of the PV industry. The Indian PV industry as per market reports is said to have recorded a market-share of 12.9% until June, 2020. In exports, out of the total automobile exports of 4.77 million, PV accounted for 677,340 vehicles until JUNE, 2020. The PV sales are also said to have increased manifold since the relaxation of COVID-19 lockdown in July, 2020, a testament to the heightened consumer reluctance for shared-mobility and public transportation.


Though still fluid, India is witnessing the most fundamental shake-up of the automotive and mobility sector ever. Mobility is evolving from car ownership to varied hues ranging from shared mobility to ride sharing, and even other modes of transport.


India will see a gradual shift to electric vehicle adoption which will be led by three-wheelers. A joint-research by KPMG and the Confederation of Indian Industry (CII) expects India to see a gradual, phased adoption of electric vehicles. The market penetration is expected to be the fastest in the three-wheeler (3W) segment followed by electric-buses; two-wheelers; and finally, passenger vehicles.

Electric cars will be the way forward considering that India will see stricter fuel emission norms in the coming years. They will offer lower operating costs when compared to conventional internal combustion engines. Moreover, on average, they are 75-80% cheaper from a fuel and maintenance perspective as well.

Currently, the growth is stifled by a limited number of products, high prices, insufficient battery promise, low performance, and an under-developed charging eco-system. However, newer inventions in the battery and charging technology will likely eliminate any hiccups and ultimately change the perspective of EV penetration in India.

Along the way, there have been some good tidings as more and more OEMs take to sustainable mobility recognizing that the future is all about electric mobility.

The Governments at the centre and states are encouraging growth of EV infrastructure through implementation of initiatives under FAME schemes I & II. Likewise, the EV industry too has been growing and the domestic sales were reported to be up by 20% despite the COVID-19 pandemic. Industry experts reckon that there is a dire need for a strategic transition plan for the Indian automobile industry to sustain the growth of the electric vehicles segment. This in turn they believe will allow the phased implementation of electric mobility milestones in INDIA while also offering the opportunity for ICE and electric vehicles to coexist in the years ahead and facilitate a smoother transition towards sustainable mobility.
This way, India can move towards a clean transport and mobility system and bring about self-sufficiency in renewable energy.

Increased use of EVs could reduce CO2 emissions by 37%; help curtail India’s dependence on oil imports and lower its massive import bills; and most importantly, enable India to meet its global commitments (lower carbon emissions and increase cleaner sources of energy and transportation, including the Nationally Determined Contributions (NDCs) under the United Nations Framework Convention on Climate Change & EV30 @ 30).

In the event of large-scale EVs manufacturing, the mechanical components will be replaced with electrical and electronic components. This will entail a major shift in skills. This means augmenting jobs and growing the economy. The Central Government’s aim of converting ICE automobiles by 2030 would need a large number of skilled professionals; the percentage of skills from the mechanical side is currently high while those from the electrical side which is essential for EV transition is not so good.


Shared mobility will be another big thing in India’s passenger vehicle market.

As per a survey report, private vehicle use has significant implications on land requirements for parking in India. For instance, in Delhi, parking accounts for 8-10% of the available land pool. Further, growth in vehicle ownership and demand for transportation is also leading to higher congestion in urban centres. More alarmingly, the cost of congestion is estimated to be Rs 1.47 lakh crore annually in cities like Delhi, Mumbai, Kolkata, and Bangalore, with vehicular emissions rates increasing with negative implications on human health and the environment.

This is where a transition to shared mobility will greatly help address the growing challenges. This shift will enable efficient asset utilization by transitioning from a model of vehicle ownership of private vehicles to usership of shared vehicles.

Survey reports predict that shared mobility has the potential to displace passenger vehicle ownership, and unlock a transportation future that is more affordable, efficient, clean and reliable. Already India is well-positioned to embrace shared mobility with factors in its favor like familiarity with shared-service, strong digital infrastructure, and a vibrant entrepreneurial culture.

According to a Morgan Stanley report, INDIA is expected to be a leader by 2030 as rising share of electric and autonomous vehicles will improve shared mile economics. The report also notes that INDIA offers all the right ingredients to be one of the largest shared-mobility markets in the world thanks to its large population clusters; a young demographic that is well-connected to the internet; and rising real incomes. By 2030, INDIA will likely see shared miles to reach 35% of all the miles travelled in INDIA which will further increase to 50% by 2040.

Auto maker HYUNDAI has already launched a new shared mobility service in India in collaboration with OLA in 2020. It promises to introduce 44 new electrified vehicles across the globe as well by 2025. Further, HYUNDAI in a strategic partnership with OLA and KIA Motors Corporation will collaborate on unique fleet and mobility solutions, build India-specific electric vehicles and infrastructure as well as nurture best-in-class opportunities and offerings for aspiring driver-partners on the OLA platform.

The collaboration will also see the automaker operate and manage fleet passenger vehicles, while also offering OLA drivers financial services, including lease and installment payment as well as vehicle maintenance and repair services.


Currently there is an intense competition between traditional taxi companies and ride-hailing services fuelled by a new wave of new companies entering the market worldwide including India. The companies providing ride-hailing services are gravitating from providing traditional taxi services to services that can be booked via apps (eg – ride pooling). This makes the whole process more transparent for customers.

Massive investments of automotive manufacturers in ride-hailing services will fuel the growth of this segment in the coming years.

In INDIA, for instance, EVERA Cabs, an all-electric cab aggregator, is already providing this service in Delhi-NCR region in the form of app-based service (operating primarily on a B2C model). The whole service approach is to not only provide electric mobility, but also offer the customers an enhanced ride-hailing experience. Another ride-hailing service provider, Prakriti E-Mobility partnering with RideCell is providing the same facility in New Delhi and later looking to expand it to Tier-2 cities like Indore, Jaipur, Chandigarh, and so on. The company at the same time is also looking to expand its fleet of passenger vehicles to 5000 cars in the next 2 years, helped by partnership with TATA.

The challenge will be on the infrastructure side. By this, it is meant that if someone has a TATA car, the same cannot be charged on say a NISSAN or MG or Mahindra charger; it has to be done on a TATA charger only. This means that every vehicle provider will need to provide their own charging mechanism. When the number of such vehicles grows, there will be the problem of land space which needs to be addressed quickly since it is not possible to have five different charging mechanisms deployed in one charging station.


Considered as an alternative to owning or leasing a vehicle, VEHICLE SUBSCRIPTION mobility model refers to a service where a customer pays a recurring fee for the right to use one or more automotive vehicles. While some vehicle subscriptions offer insurance and maintenance as part of the subscription fee, other subscriptions allow the subscriber to switch between different passenger vehicles during their subscription period.

Under this mobility model, the customers can also set-up the subscription online and manage it vide a Smartphone app. In turn, the customer will enjoy benefits like access to a range of vehicles on-demand; flexibility of time-frames, with the ability to change cars more frequently than that is possible with leasing or buying; lower credit requirements; cost savings, with no down payments or financial charges; and easier contractual obligations.

The main plank of this model is to deliver additional options that are closer to a person’s lifestyle desires. It has in a short span of time proven to be highly popular with millennial ‘s who will represent 40% of the car buying market by the end of 2020 and who greatly prefer to own an experience without owning the asset and who give priority to convenience. In INDIA, major automaker MARUTI SUZUKI is offering subscription-based ownership services. HYUNDAI Motor India is another automaker offering the same, albeit a subscription-based car sharing model with REVV, targeting a set of customers who are looking at smart mobility. Overall, the demand for this model is the highest in Bangalore, followed by Mumbai, Hyderabad, and then Delhi-NCR; the average age of the customer are in the 26-30 age bracket with a salary of up-to Rs 100,000.

Market experts see not just millennials opting for this mobility model, but also others like Convenience Seekers looking to avoid the hassle of vehicle insurance registration; Prime Buyers looking to change cars very early and frequently; and Sub-Prime Buyers who don’t have the capital to finance but want to avail different options.


Connectivity mobility makes mobility much easier, safer, and more convenient. Made possible by digitization, it is creating newer possibilities through the connectivity of smart devices and the introduction of online services and apps in the car vehicle. This facilitates seamless integration that removes the borders between mobile and immobile living spaces. Preferences and individual settings of devices will be seamlessly transferred to the vehicle.

Major automaker BMW is currently working the same on its BMW & MINI Motorrad vehicle categories. One of its concepts involves the evaluation of sensor-data which enables the vehicles in front to predict critical traffic situations before they lead to a dangerous situation for subsequent drivers. Likewise, data from infrastructure could also be used for more safety and convenience. In INDIA, Maruti Suzuki is working on the same and so is HYUNDAI India. They believe that India is just starting to see the penetration of connectivity in cars. Going forward will see standardization coming in for the sake of data privacy and security which will introduce a boom in the space.


Thanks to COVID-19, 2020 has altered consumer preferences and safety while ushering in a new era of mobility. This means that the ‘NO SHARE’ vehicle segment will expand in India, leading to higher passenger vehicle sales. The share of vehicles priced below Rs 7 lakhs, which have been declining in the last five years, will according to market experts, see a reversal with positive demand ahead. Another segment that is likely to see a big rise in demand will be the used car market. However, both of these scenarios will largely depend on when the COVID-19 vaccine will be approved and made accessible to the general public in sufficient quantity.

Market experts believe that automakers will need to factor in the health concerns of the consumers and engage more with and also facilitate collaboration within OEMs, Tier 1, start-ups, and other technology partners, in a bid to come up with better features that monitors health and wellness. Likewise, OEMs will need to brace themselves to cater to the fast pace of transformation taking place in the automotive sectors by providing smart, safe and affordable products.

The Government too needs to be more proactive, and come up with still more policies that is positively towards EVs. This will help India to transit from a global leader in 2W and 3w internal combustion engine (ICE) vehicle manufacturing to a global EV leader in 2W & 3W manufacturing.


Market analysts believe that while COVID-19 has caused a lot of disruption and fuelled fears about shared mobility and ride-hailing mobility options, it has also accelerated the growing momentum towards personal mobility. With disposable incomes going up, there is greater willingness among the people to invest in big buys like cars which means they want to own a car which offers them safe mobility.

There is also a growing belief among the market analysts that the future will see not just be about providing new auto products but also offering ample variety and options to the customers, whatever the fuel choice – petrol or diesel or electric; and engine options – turbo and so on. The customers will be willing to buy and it will be up to the OEMs to cater to their precise demands.

Overall, 2021 is forecast by market analysts to be a year for recovery, transition, and expansion for the Indian automobile industry as it forays ahead to be among the world’s top three automobile markets. The tremendous opportunities created by major disruptions like changing consumer preferences; rapidly-growing digitization; Government reforms; and new vehicle business models will compel automakers to adapt and change with times in order to get ahead in the competitive market of automobiles.

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