Nine Indian car makers plan additional capacity of 3 million per annum | News
Nine Indian car makers who account for 97 per cent of the domestic market sales are creating additional capacity of three million cars per annum, an increase of 52 per cent compared to their current capacity of 5.77 million cars, according to data from CRISIL Intelligence and Analytics.
Once the plants are up and running, India will hit a capacity of 8.77 million passenger vehicles per annum. The new capacities will come into the market between November 2024 to FY31 in various phases and include not only ICE but electric cars and hybrids.
The companies include Maruti Suzuki, Hyundai Motor, Tata Motors, Mahindra & Mahindra, Kia Motors, Toyota Kirloskar, Honda Cars India, Skoda Auto Volkswagen and MG Motors. This list does not include the fresh investment announced by Vinfast for making cars in India.
The decision to create more capacity makes sense given that India registered a record 4.2 million vehicle sales in FY24 and, according to S&P, is expected to reach 8.2 million by 2035, up from the 5.1 million estimated in 2025. India will become the third largest market in the world after China and the US.
However, the car penetration here is very low at 26 per 1000 people compared to China (183), the US (594) Korea (384) Mexico (280) and Brazil (276). The potential for growth is huge.
S&P Mobility also points out that India has seen one of the biggest car sales turnarounds after the pandemic, growing by 35.03 per cent between 2019 and 2023 – the best recovery in the world.
Once the capacity is available, four auto companies – Maruti, Hyundai, Tata Motors and Mahindra & Mahindra – will control 81 per cent of the country’s car making capacity. One of the largest expansions is that of Maruti Suzuki which will launch its first electric car by the end of the year, initially for exports and then for the domestic market.
Maruti Suzuki is setting up a capacity to make 0.25 million cars in Kharkhoda in Haryana which will be commissioned by 2025. Another one million per annum plant in Gujarat is expected to be on stream by 2029. What’s more, another production line will be added to Maruti Suzuki’s existing plant, adding another 0.25 million vehicles.
The other substantial increase in capacity is that of Mahindra & Mahindra which will nearly double its production from 0.59 million per annum to 1.08 million.
Hyundai Motors, which has applied to Sebi for floating a Rs 25,000 crore IPO, has also decided to up its capacity from 0.92 million to over one million per annum after the completion of its expansion in the recently acquired Talegaon plant of General Motors.
Hyundai Motors has announced an investment of Rs 32,000 crore for capacity expansion, R&D, and creating a local supply base.
Kia Motors expects to expand its capacity to 0.4 million from the current 0.35 million per annum in FY25.
Then there is MG Motors in which the JSW group has taken a substantial stake. MG plans to expand its capacity in the Halol plant in Gujarat from 0.1 million to 0. 3 million.
First Published: Jun 26 2024 | 12:04 AM IST
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