India fourth largest auto market in 2019 displacing Germany with about 3.99 million units sold in the passenger and commercial vehicles categories. India is expected to displace Japan as the third largest auto market by 2021.Passenger vehicles & 2-wheeler segment dominate the domestic Indian auto market. Passenger car sales are dominated by small and mid-sized cars. Two wheelers and passenger cars accounted for 80.8% and 12.9% market share, respectively, accounting for a combined sale of over 20.1 million vehicles in FY20. Automobile export reached 4.77 million vehicles in FY20, In October 2020, MG Motors announced its interest in investing Rs. 1,000 crore (US$ million) to launch new models and expand operations in spite of the anti-China sentiments. In October 2020, Ultraviolette Automotive, a manufacturer of electric motorcycle in India, raised a disclosed amount in a series B investment from GoFrugal Technologies, a software company. In January 2020, Tata AutoComp Systems, the auto-components arm of Tata Group entered a joint venture with Beijing-based Prestolite Electric to enter the electric vehicle (EV) components market.

Morris Garages (MG), a British automobile brand, announced plans to invest an additional Rs. 3,000 crore (US$ 429.25 million) in India. Audi India planned to launch nine all-new models including Sedans and SUVs along with futuristic E-tron EV by end of 2019. BMW already announced its Top end and mid segment launch recently.

PARLIAMENTARY PANEL ON AUTO SLOWDOWN

10% GST REDUCTION CAN OFFSET PRICE INCREASE AND GENERATE DEMAND || REDUCE GST ON USED CARS FROM 12-18% TO 4% TO CREATE DEMAND || SCRAPPAGE POLICY WITH FINANCIAL INCENTIVES TO BOOST DEMAND || STRICT GUIDELINES TO LINK REPO RATE TO INTEREST ON LOANS || MODERATE COLLATERAL NORMS FOR WORKING CAPITAL NEEDS OF DEALERS || EFFECTIVE DEPRECIATION RATE OF 25% ON A PERMANENT BASIS 12:21.PARLIAMENTARY PANEL ON AUTO SLOWDOWN – SLOWDOWN IN AUTO SECTOR HAS LED TO LOSS OF 3.4 LAKH JOBS || OEMS HAVE SLASHED PRODUCTION BY 18-20% || AUTO SECTOR COULD FACE TWO CONSECUTIVE YEARS OF CONTRACTION || AUTO SECTOR NEEDS A FOCUSED STIMULUS PACKAGE

Road Ahead

Economy recovery would benefit this sector with rising demand in this sectorGrowth rate of 7-9% could be assumed going forward for this sector.

BENEFICIARIES : MARUTI, TATA MOTORS, M&M.