Major Indian automakers plan additional capacity of 3 million per annum

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Major Indian automakers plan additional capacity of 3 million per annum

Automobiles 26 Jun 2024 12:46 PM IST Business Standard

According to data from CRISIL Intelligence and Analytics, nine major Indian automakers, which account for 97% of the domestic market sales, are creating an additional capacity of three million cars per annum, an increase of 52% compared to their current capacity of 5.77 million vehicles. India will have a capacity of 8.77 million passenger vehicles annually once the plants are up and running. The new capacities will introduced into the market between November 2024 and FY31 in various phases and include not only ICE but also 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 move to increase capacity makes sense, considering that India had a record 4.2 million car sales in FY24 and is predicted to reach 8.2 million by 2035, up from 5.1 million in 2025, according to S&P. India will be the world's third largest market following China and the United States.

S&P Mobility also notes that India has experienced the most substantial global recovery in automobile sales following the epidemic, with a growth of 35.03% between 2019 and 2023.

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 will be on stream by 2029. Moreover, 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 ₹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 ₹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.

Also Read : January auto sales: Passenger vehicles, three-wheelers continue to top sales in FY24 Hyundai & Kia ties with Exide Energy Solutions to localise EV batteries in India

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Major Indian automakers plan additional capacity of 3 million per annum

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