India will surely become the top automobile manufacturer in the next five years, said RC Bhargava, Chairman, Maruti Suzuki India (MSIL).

The country will gain in exports too, with several original equipment manufacturers (OEMs) announcing new investments over the next few years, he added.

For instance, Hyundai Motor India and MG India have recently announced investments of ₹20,000 crore and ₹5,000 crore, respectively, to expand their manufacturing capacities and portfolio over the next 5-7 years.

MSIL had also announced an investment of ₹18,000 crore last year at its upcoming plant in Kharkoda, Sonipat (Haryana), over the next seven years to expand its production capacity in India.

In the components sector, too, companies such as Jai Bharat Maruti have announced ₹300-350 crore investments to meet core MSIL customer demand in the next few years.

Recently, Transport Minister Nitin Gadkari had also said India could become the world’s largest automobile market in the next five years, with a likely rapid proliferation of electric cars and vehicles run on flex-fuel engines.

Surpassing China

“We are now number three (in the global market) — we have overtaken Japan and the two ahead of us are the US and China. It is a fact that China is way ahead of us at the moment just like the Chinese economy which is much bigger... but, in the overall automobile industry scenario, if we take only the two-wheeler segment, we have raced ahead,” Bhargava told businessline in an interview.

However, for the moment, he clarified that it is not easy to overtake China because they sell more cars. In calendar year 2022, China sold 26.86 million units of automobiles (across all categories), while India sold 20.75 million units.

‘Potential exists’

India has the potential to substantially increase the manufacturing of products, especially in the car segment, and Maruti Suzuki alone has exported around 2.60 lakh vehicles in the last financial year (2022-23).

The numbers could have been much higher if the company had not restricted production capacity owing to the shortage of semiconductors.

“But, in 2030, we are expecting our exports to go up to almost three times which is around seven-eight lakh cars. If that is happening to us, it could happen to other manufacturers also. So, I think India will become a very large exporter of cars,” Bhargava added.

According to data by the Society of Indian Automobile Manufacturers (SIAM), India exported 6,62,891 vehicles in FY23, up 14.71 per cent compared with 5,77,875 units in FY22.

However, in the overall tally, the exports dropped 15.23 per cent to 47,61,487 units last fiscal compared with 56,17,359 units in 2021-22. The decline was mainly attributed to the drop in exports of two-wheelers.