India’s auto sector is on a roll. While strong demand from buyers and new launches had boosted volumes, easing commodity prices enhanced margins for automakers in FY23. Better operating efficiency and price hikes have also augured well for them, experts say
The BSE Auto index, which has gained 21% year-to-date until June 30, reflects this positive outlook. The BSE Auto index and the Sensex have moved in tandem in the past decade
One of the major factors behind the growth of the auto sector in India is the cyclical rise and recovery in urban demand. As per ACE Equity, the auto sector has consolidated gross sales of Rs 4.65 lakh crore in FY13 vs Rs 9.94 lakh crore sales in FY23 thus marking a record-high in auto sales in FY23
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Tata Motors and Mahindra & Mahindra were the top 2 automakers in terms of sales in FY23, thanks to the persistent high demand for their latest models. They were followed by Maruti Suzuki India, SM International and Ashok Leyland
Mahindra & Mahindra and Maruti Suzuki India were the two most profitable companies in the auto sector in FY23. Some of the other automakers with substantial net profits were Bajaj Auto, Eicher Motors and Hero MotoCorp
Tata Motors and Ashok Leyland were among a few auto and auto ancillary firms that roared back to black in FY23 after losses in the past two years
Several leading automakers such as Maruti Suzuki India, Eicher Motors and Bajaj Auto have registered substantial improvement in operating profit margin in FY23
*Source: Primus Partners
- 19 million+ number* of people employed in the auto sector as of March 31, 2023
- More than 3% contribution* of the auto industry to India’s GDP, which was Rs 272 Lakh Crore* in FY23
- $3 billion in funding was raised by EV start-ups in the past two financial years, compared to $1.2 billion during FY15-21, as per Tracxn data