The Automotive Industry is Best Viewed When Seen Through a Long Lens…

At the end of every 12 months, we not only take pleasure in crowning the top-ten vehicles of the year, but we also take the opportunity to sit down with the leaders of the industry to get their take on the year gone by – and get a sense of what they expect for the year ahead.

Now, if you look at the newspaper headlines, you’d think that the world was coming to an end – and bringing the automotive industry down with it. But if you take the time to get the perspective of professionals who’ve seen the ebbs of flows of the economy for three decades plus – with a collective experience of a few centuries – you get the sense that a more measured approach is needed. I urge you to check out our interviews with the industry leaders. In the meantime, here are some key takeaways.

Firstly, and importantly, although this isn’t a revelation by any stretch, the Indian automotive industry has come a long way! It’s now the third largest market in the world – after only the US and China (albeit a lot further back). Remember, though, our car penetration is just 32 per 1,000 people (compared with over 200 in China and 850 in the US). If this number reaches even 44 per 1,000, the Indian car market will go from 4 million to about 6 million. But we have to get there progressively; organically; gradually.

Three key phrases when looking at the auto industry. Post-covid growth across industries and geographies has been pretty staggering by all accounts, but to expect this to continue would be foolhardy. We’ve seen 10% year-on-year growth over the past few years, so it’s only natural for that to drop to single digits in the near term. Veterans of the industry will tell you that it’s normal to see a few years of double-digit growth, followed by a plateau, or a trough even, only to be followed by rapid growth once again. It is, after all, cyclical – to expect otherwise would be to forget that ‘Objects in the rear-view mirror are closer than they appear.’

Now, as far as EVs are concerned, there appears to be some consensus that EVs are the eventually end state – it’s just a question of when! At present, the market penetration of EVs in the car segment is about 2.5%. However, on the basis of some of the really compelling launches that have just taken place (some of which are part of our Best of 2024 top-ten), and others that are imminent, it would be reasonable to assume that this will grow to about 6-7% in the next couple of years – with 16-18% being the best case scenario by 2030.

The real gamechanger in terms of charging infra could come from Maruti Suzuki, which showcased the e Vitara at the Bharat Mobility Expo. If Maruti approaches the EV segment the way they approached the mobility ecosystem four decades ago – wherein they first set up an after-sales network before they focussed on retail outlets – then it could change the charging landscape entirely. Take, for instance, the fact that Maruti has over 4,000 dealers and an equal number of service centres across the country. If each one installed at least one EV charger that would not only add 8,000 chargers to the mix but also make them accessible in some of the most remote corners of the country.

So, yes, the landscape is changing. The inertia and momentum is very much there. It’s hard to measure at any one point in time, but when viewed through the lens of history it’s easier to put in perspective.