The report states that India’s automobile sector is expected to witness positive growth next year due to government support policies and the growing job market.
The main reason behind the growth is the impact of rapid adoption and manufacturing of hybrid and electric vehicle (FAME II) schemes that have been in effect since April 2019.
This policy encourages states to provide financial and non-financial incentives to promote the adoption of electric vehicles (EVs), and contributes to the expansion of the sector.
According to a report by Data Analytics Firm GlobalData, around 24.7% of these cities could experience strong growth in the automotive sector, while 49.5% are expected to have moderate growth.
Cities such as Mumbai, Hyderabad and Pune are among the predicted to thrive. Meanwhile, about 7.5% of cities may be stagnant, with 9.7% and 15.5% respectively experiencing moderate, pessimistic declines.
Chandigarh is one of the cities expected to face challenges in automotive growth. In particular, Hyderabad and Mumbai are well suited to expand due to the growth and employment opportunities in the services sector.
Hyderabad has seen a surge in employment, supported by government initiatives promoting start-ups and entrepreneurship.
The focus on state government information technology (IT) and IT-enabled services (ITE) has played an important role in job creation.
Furthermore, the continuous improvements in infrastructure, including roads, transportation and power sources, have made cities attractive to businesses and workers.
A study conducted in 31 major cities found that an increase in the workforce drives demand in the automotive sector.
“While the overall growth of the automotive sector is promising, regional dynamics have a significant impact on the market trajectory,” said Madhuchhanda Palit, automotive analyst at GlobalData.
She added that factors such as advancement in the service sector, availability of employment opportunities, industrialization and state government initiatives play a pivotal role in shaping sector growth in various regions.
