Revitalising wheels: India's automotive triumphs in 2023
Deepesh Baxi of Castrol India outlines why the future is bright for the Indian automobile industry this year.
Amid global economic challenges marked by inflation, geopolitical tensions, and semiconductor shortages, the Indian automotive industry has defied odds, shaping an optimistic narrative for 2023. A resilient growth trajectory unfolds, propelled by diverse factors that underscore India's prominence on the global automotive stage.
Pinnacle of vehicle sales
Navigating economic recovery and heightened mobility demands, the Indian automobile sector experienced a notable resurgence throughout 2023. November emerged as the zenith, with a historic record-breaking 28.54 lakh vehicle units sold, eclipsing the previous milestone set in March 2020. Notably, two-wheeler and passenger vehicle sales soared to 22.47 lakh and 3.6 lakh units, respectively, propelling India to the esteemed rank of the world's third-largest automotive market.
Thriving tyre industry
The Indian tyre industry's growth projection is nothing short of remarkable, poised to double revenue to USD 22 billion by fiscal 2032, according to a report by the Automotive Tyre Manufacturers’ Association (ATMA). Factors such as semiconductor supply stabilisation, governmental infrastructure impetus, and surging vehicle numbers have spurred demand, with the sector expected to maintain a steady 4-5% growth rate, reaching Rs 1 lakh crore in revenue by FY26.
Electrifying mobility revolution
In a paradigm shift towards electric mobility, India's automotive landscape witnessed substantial investments in electric vehicle (EV) development. Government initiatives form a strategic foundation for achieving a robust EV presence by 2030. This propels the EV battery market to anticipate a growth from USD 16.77 billion in 2023 to USD 27.70 billion by 2028.
Dominance of auto components
India's auto component manufacturing (ACM) sector is taking centre stage in the ecosystem and the country is slated to become the world's third largest by 2025. According to the Auto Component Manufacturers Association of India (ACMA), the sector delivered a record revenue of Rs 5.6 lakh crore (USD 69.7 billion) in FY2022-23. With this record growth of 32.8% from the preceding peak in FY22, it is playing a pivotal role in shaping solutions for global mobility.
Gears of progress
In tandem with the dynamic shifts in the Indian automotive landscape, the lubricant industry plays a pivotal role in ensuring smooth and efficient operations. The surge in vehicle production and diverse mobility demands has spurred growth in the lubricant sector.
Performance Enhancement: The lubricant industry has witnessed an upswing in demand driven by the need for high-performance lubricants tailored to meet the evolving requirements of modern engines. As automotive technologies advance, lubricants have become a critical component in optimising engine efficiency, reducing friction, and extending the lifespan of vehicles.
Technological Synergy: Collaborating with the automotive sector, lubricant manufacturers have developed innovative formulations designed to meet the stringent demands of electric vehicles, hybrids, and traditional ICE. This symbiotic relationship between the lubricant and automotive industries underscores a commitment to efficiency, sustainability, and longevity.
Environmental Compliance: With a growing emphasis on environmental sustainability, lubricant manufacturers are actively engaged in developing eco-friendly formulations. Low-viscosity lubricants and those with reduced environmental impact are gaining prominence, aligning with the broader industry trend towards greener and more sustainable practices.
Strategic Alliances: Recognising the integral role of lubricants in ensuring optimal vehicle performance, strategic alliances have emerged between automotive manufacturers and lubricant suppliers. These partnerships aim to create tailor-made lubrication solutions that enhance fuel efficiency, reduce emissions, and contribute to overall vehicle reliability.
Market Expansion: The lubricant industry in India is experiencing an expansion of its market footprint, driven by increased vehicle ownership, industrial growth, and the rising awareness of the role lubricants play in enhancing machinery performance. This growth trajectory positions the Indian lubricant sector as a key contributor to the overall health and efficiency of the automotive ecosystem.
As the wheels of the Indian automotive industry turn towards a future defined by innovation, sustainability, and technological prowess, the lubricant industry emerges as a silent yet indispensable partner, ensuring that every component works in harmony to drive the nation's automotive success story in 2023 and beyond.
Deepesh Baxi is the CFO and Wholetime Director of Castrol India. Views expressed are those of the author.
Renault's announcement of the Duster's comeback sparked excitement, given its significance in the midsize SUV segment in...
As the country begins on a transformative journey towards sustainable mobility, assessing India's readiness for the elec...