What is the size of the automobile market in India in 2020?


The automobile industry is a crown jewel of the Indian economy. The auto sector holds about 7%-8% of the country’s GDP every year. These numbers are expected to go as high as 10% by 2026! The Indian auto market is expected to become the third-largest auto market by the year 2026.

The rise in digital distribution channels and international names entering the Indian auto grounds is setting up a steady increase in the size of the automobile market in India.

With the growing number of investors and the coming of new-age EVs, the sector is only going to grow upwards than the automobile market in India 2020.

The industry did have to go through a few backlashes in recent times due to low Information and Communication Technology (ICT) adoption and disruptions due to new regulations. Despite that, the industry is on its road to recovery and is expected to recover completely by 2021.

The automobile industry in India also suffered due to the Covid-19 pandemic, much like every industry in the world. However, despite the limited trade allowances and dropping economy, the auto industry somehow managed to stay afloat. The size of the automobile industry in India is expected to grow in the subsequent years owing to the health and hygiene concerns in the post-Covid times.

How exactly did the auto market perform in 2020? What was the size of the automobile market in India in 2020? We shall review the automobile industry in India 2020 in this article.

The automobile market in India 2020

India majorly imports auto parts from China and other countries. The Indian manufacturers then assemble those parts in the workstations here, ready for sale. In 2020, due to trade restrictions, the production of automobiles became extremely slow due to the shortage of auto parts that would have commonly been imported. The demand for cars had also dropped due to people staying indoors.

The four major segments of the auto industry: passenger vehicles, commercial vehicles, two-wheelers, and three-wheelers, all noted a massive drop in sales. Comparing the data of May 2019 and May 2020, we found that the sales in the latter were about 15% lower than the former.

  • Passenger vehicles

There was a drop in the sales of passenger vehicles in 2020. The number of units of passenger cars sold in May 2019 was over 220 thousand. As compared to that, they sold only about 33.5 thousand units of passenger cars in May 2020.

  • Commercial vehicles

The sale of commercial vehicles also witnessed a similar drop in 2020. Due to the risk of traveling by public transport, only about 2.7 thousand units of commercial vehicles were sold in May 2020. The number of companies of the same sold in May 2019 was over 80 thousand.

  • Two-wheelers

The two-wheeler section of the auto industry didn’t come untouched either. The income uncertainties of people resulted in a significant drop in sales in the automobile industry. As compared to the 1.7 million units of two-wheelers sold in May 2019, the number of units sold in May 2020 could not even touch the 280 thousand mark.

  • Three-wheeler sales

It is, in fact, another part of public transportation, so it was bound to watch a decrease in sales too. May 2019 saw the sale of over 59 thousand units of three-wheelers. Comparatively, May 2020 could only sell 2.4 thousand units.

Some key points in the production and supply chain in the automobile industry in India 2020 are:

  • The automobile industry in India 2020 suffered losses of USD 328 million in turnover per day (approx.).
  • The industry had to lose around 3.5 lakh jobs overall.
  • The auto parts imported from China are around 29% under normal circumstances. This number saw a considerable drop due to trade restrictions.
  • The ride-sharing market witnessed a drop both due to hygiene awareness among people as well as the government restrictions on shared rides.
  • Car and other automobile showrooms and retail stores are constantly shutting down due to the virus outbreak. Instead, the online marketplace is brimming with auto sales.

The year 2020 also saw some significant technological advancements in the field of automobiles in India. The confirmation of the launch of electric cars in India by Tesla founder Elon Musk stirred up the automobile market in India. The incident invited new foreign investors to the Indian marketplace.

The automobiles saw the dawn of automated cars as well, shaping the future. Luxury companies and big names like BMW, Mercedes, etc., spent the year funding their R&D department for the betterment of automated vehicles. Self-driven automobiles are expected to dominate the auto market in the coming years.

Size of the automobile market in India 2020

A total of 21.55 million units of vehicles were in the FY2020 in India. Out of this, 17.42 million units were of two-wheelers, and about 3 million units were of passenger vehicles.

The numbers are pretty lower than that of 2019. However, the industry is in its recovery phase and shall soon make up for the losses. The upcoming technologies are potentially groundbreaking, especially with the arrival of electric vehicles in the Indian market. The automobile industry in India is expected to see a profit boom in the coming years.


Despite all the losses incurred in the year 2020, the automobile industry is showing signs of improvement. The year 2021 is expected to bring in reforms to help cover the failures of the previous year.

Expectedly, 2021 would bid goodbye to the global pandemic. With the lockdown lifted and people going about with their general schedule, the automobile industry is sure to explode.

Statistics suggest that passenger vehicles will outsell commercial ones. With people maintaining safety measures of keeping distance from one another, this is really a no-brainer. Most people are going to rely on their personal vehicles for commute instead of public transportation.

Hopefully enough, a healthy and brighter future awaits the people around the world and the automobile industry.

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