India Automotive Market 2030: Buses & Coaches Shaping Urban Mobility

The demand for vehicles in India’s automotive market is expected to grow significantly from 5,156,483 units in 2024 to 8,363,344 units by 2030, reflecting a compound annual growth rate (CAGR) of 7.3% from 2025 to 2030. According to the European Automobile Manufacturers Association (ACEA), India ranked fourth among the top global car producers as of April 2018. This growth is supported by factors such as an increasing population, rising disposable incomes, and easier access to credit and financing. Additionally, the burgeoning logistics and passenger transport sectors are expected to drive a strong demand for commercial vehicles.

Government policies, including tax reductions and initiatives like Make in India and the Automotive Mission Plan 2026, have positively influenced the market. The corporate tax rate reduction in 2019 is expected to attract more foreign direct investment (FDI) in manufacturing, helping the automotive sector. These government programs aim to make India’s automotive industry a key player in the global market.

In addition to the growing demand for passenger vehicles, Light Commercial Vehicles (LCVs) are forecasted to see substantial growth. The expansion of the logistics sector, particularly retail e-commerce, is driving the demand for LCVs. Manufacturers are targeting untapped regional markets in rural and semi-urban areas to increase sales, aided by improved credit and financing options.

Technological advancements, including the rise of automated, electrified, and connected vehicles, are transforming the automotive landscape. Growing awareness of the environmental impact of internal combustion engine (ICE) vehicles is encouraging consumers to adopt electric vehicles (EVs). The government’s push for electric mobility, supported by tax incentives and subsidies, is expected to sustain market growth through 2030.

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Key Market Trends & Insights

• Passenger Vehicles: The passenger vehicle segment held the largest market share of 72.2% in 2024. Consumer demand is shifting toward compact SUVs and feature-rich hatchbacks, driven by a preference for fuel efficiency, connected car technology, and enhanced safety features. The transition from two-wheelers to entry-level cars, particularly in semi-urban and rural areas, is expected to continue. The government’s FAME II scheme is further accelerating the adoption of electric passenger vehicles.
• Hatchbacks: The hatchback segment led the passenger vehicle market in 2024 due to its compact size, which suits Indian road conditions. Indian manufacturers have tailored hatchbacks to local needs, offering competitive pricing, premium features, and easy financing options, particularly targeting the growing middle-class population.
• Light Commercial Vehicles (LCVs): LCVs dominated the commercial vehicle segment in 2024. Pickup trucks like the Mahindra Bolero Pickup, Tata Super Ace, and Ashok Leyland Dost are highly popular, offering a balance of compact size and high load capacity, making them ideal for freight transport. Additionally, recreational pickups are expected to boost demand in the 2 to 3.5 tons truck segment.
• Heavy Trucks: The market for trucks over 25 tons held the largest share in 2024. The demand for these vehicles is driven by the need for goods transportation and infrastructure development. Heavy trucks today are more fuel-efficient, reliable, and capable of carrying larger loads, which enhances their attractiveness in the market.
• Buses & Coaches: The 3.5 to 7.5 tons segment of buses and coaches held the largest volume share in 2024. This category includes buses used for school transportation, local tours, and employee shuttles in metro cities. Population growth and urbanization continue to drive demand for buses in both public and private sectors.

Market Size & Forecast

• 2024 Market Volume: 5,156,483 Units
• 2030 Projected Market Volume: 8,363,344 Units
• CAGR (2025-2030): 7.3%

Key Companies & Market Share Insights

Prominent players in the Indian automotive market include Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, and Bajaj Auto. These companies are adopting strategies like product launches, acquisitions, and collaborations to strengthen their market presence.

• Maruti Suzuki: Known for affordable and fuel-efficient vehicles, Maruti Suzuki continues to lead the passenger vehicle segment in India. The company is also expanding its EV portfolio and plans to launch its first electric vehicle by 2025.
• Tata Motors: A major player in both the passenger and commercial vehicle segments, Tata Motors is making strides in the EV market with its Nexon EV and Tiago EV models. The company has also transformed its brand with a focus on design, safety, and performance, particularly in the urban SUV market.

Key Players

• ASHOK LEYLAND
• Bajaj Auto Ltd.
• Mercedes-Benz Group AG.
• EICHER MOTORS LIMITED
• Honda Motor Co., Ltd.
• Hyundai Motor India
• Mahindra&Mahindra Ltd.
• MARUTI SUZUKI INDIA LIMITED
• Piaggio & C. SpA
• Tata Motors

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Conclusion

The Indian automotive market is on a robust growth trajectory, driven by favorable economic factors such as increased income, urbanization, and government initiatives. The rise of electric vehicles, coupled with innovations in automation and connectivity, is reshaping the market. Both passenger and commercial vehicle segments are expected to see strong demand, particularly for hatchbacks, LCVs, and heavy trucks. As key players invest in new product offerings and expand their reach, the market’s future looks promising, with a projected market volume of 8.36 million units by 2030. The combination of technological advancements, government support, and evolving consumer preferences will continue to drive market growth through the forecast period.