
India passenger vehicle component market is projected to witness a CAGR of 6.95% during the forecast period FY2025-FY2032, growing from USD 35.33 billion in FY2024 to USD 60.47 billion in FY2032. India is emerging as a global manufacturing hub, with numerous manufacturers and factories establishing production facilities nationwide. This trend contributes to the growth of the automobile industry and vehicle components market, coupled with boosting the nation’s GDP. The development of the passenger vehicle components market is primarily led by rising per capita income and increasing population, fostering the sales of passenger vehicles. For instance, the production of passenger cars increased by 7%, while utility vehicles take up 56% of the total sales, which increased from 49%, due to the growing population and urbanization. Consequently, more vehicle components are required for passenger cars. Manufacturers are investing in research and development to upgrade technology. In addition, the automobile manufacturers are putting AI and hydrogen fuel cells in cars, which has put India in a prime position in the global market by opening manufacturing units. The rising population, increasing interest among youth in automobiles, increasing demand for electric vehicles, and focus on advanced technology have created a viable environment for the growth of the vehicle components industry in India in recent years. This increasing demand for sustainable manufacturing practices is pushing vehicle component companies to innovate more viable mobility components by entering into joint venture agreements and setting up manufacturing plants. Major Indian auto parts manufacturers export and partner with international companies.
Advancements and Collaborations Driving India’s Passenger Vehicle Component Market
In June 2024, Minda Corporation Limited, the flagship company of Spark Minda, entered into a joint venture (JV) with Taiwan-based HSIN Chong Machinery Works Co. Ltd. (HCMF) to develop innovative automotive sunroof and closure systems. This collaboration reflects the industry’s ongoing focus on technological advancements and market expansion.
Technological Innovations Fuel Market Growth
The adoption of advanced technologies, particularly 3D printing, is revolutionizing the passenger vehicle component market in India. This technology enables the production of complex, lightweight structures, enhancing vehicle performance and fuel efficiency. Original equipment manufacturers (OEMs) are leveraging 3D printing for rapid prototyping, customized parts, and electric vehicle (EV) component manufacturing, significantly reducing waste and production costs. Additionally, OEMs are integrating IoT-based smart factory solutions, which allow real-time data monitoring, predictive maintenance, and streamlined production processes.
Indian companies are actively engaging in partnerships, acquisitions, and agreements to develop advanced auto components for both domestic and international markets. For instance, in February 2022, Bharat Forge Limited, along with its subsidiary BF Industrial Technological & Solutions Limited, acquired JS Autocast Foundry India Private Limited for $58.19 million. This acquisition strengthened Bharat Forge’s capabilities in manufacturing high-precision automotive components for global markets.
Millennials Driving Demand for Passenger Vehicles
The increasing interest of millennials in vehicle ownership, particularly electric and luxury cars, is propelling growth in the automobile and passenger vehicle component markets. Factors such as rising disposable incomes, a preference for premium and status-symbol vehicles, and a growing demand for high-performance components are shaping market trends. Brands like Tesla and BMW remain popular among millennials due to their blend of luxury and cutting-edge technology.
Social media also plays a significant role in influencing purchasing decisions, with younger consumers seeking vehicles with advanced interior features and eco-friendly options. As a response to this trend, Indian startups are capitalizing on the growing hype around electric vehicles. In June 2024, Zuperspeed Automotives introduced Hyperflux, India’s first electric sports car, featuring a coupe-style closed cockpit design. Priced between $8.62 million and $9.86 million, this launch signifies a shift towards high-performance electric vehicles, appealing to a new generation of automotive enthusiasts.
Engine and Engine Parts Market Poised for Significant Growth
The production of engines and engine components remains a crucial segment within the automotive industry, accounting for approximately 31% of total automotive component production value. As demand for vehicles continues to rise, manufacturers are focusing on precision-engineered, high-performance engines. Advances in automation and 3D printing are enhancing production efficiency, reducing costs, and improving component quality.
With the automotive industry transitioning towards electric and flex-fuel vehicles, the demand for adaptable engine components is increasing. Companies are investing in next-generation technology to support this shift. For example, in August 2024, Toyota unveiled its BS 6 Stage II Electrified Flex Fuel Vehicle, incorporating an innovative engine based on the Innova Hycross. This prototype, designed to meet India’s stringent emission regulations, features a dual powertrain with both a flex-fuel engine and an electric system. Capable of running 40–60% in EV mode, it offers 30–50% higher fuel efficiency, making it a significant development in hybrid vehicle technology.
Southern India Emerges as a Key Manufacturing Hub
Southern India is rapidly becoming a dominant region in the passenger vehicle component market, with significant industrial expansion in Tamil Nadu and Karnataka. The region is benefiting from government initiatives like the Digital India program, which promotes technological advancements, and investment-friendly policies, including 100% FDI allowances. The Production Linked Incentive (PLI) scheme is further encouraging domestic manufacturing of advanced auto components.
This favorable business environment is attracting global automotive manufacturers. In December 2023, Tata Motors Group signed an MoU with the Tamil Nadu government, committing to a $1.08 billion investment over five years to establish a vehicle manufacturing facility. Similarly, in April 2023, TVS Group and BorgWarner Delphi-TVS Technologies announced a joint venture with a $4.5 billion investment plan to expand operations in Chennai. These developments are fostering collaborations between global brands and local manufacturers, driving further innovation and market expansion.
Future Market Outlook (FY2025 – FY2032)
- The transition to alternative fuels and widespread EV adoption will drive investment in next-generation automotive technologies.
- India’s Atmanirbhar Bharat Abhiyan initiative will support the expansion of domestic manufacturing capabilities.
- The government is actively encouraging foreign collaborations while strengthening local automotive manufacturing.
- Rising middle-class incomes and increased vehicle ownership will boost demand for automotive components, accelerating market growth.
Market Report Overview
The “India Passenger Vehicle Component Market Assessment, Opportunities, and Forecast (FY2018–FY2032)” by Markets and Data provides a detailed analysis of market trends, challenges, and opportunities. The report covers segment-wise market performance, key industry players, and competitive intelligence, offering insights into the projected market landscape through FY2032.
Click here for full report- https://www.marketsandata.com/industry-reports/india-passenger-vehicle-component-market
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