South Asia India's rise as a manufacturing powerhouse making China nervous as geoeconomic advantage shifts

[Krishna with Flute]

We are largest two wheeler producer of the world with 20 million 2 wheeler manufacturing.

@Bilal9

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Top Two-Wheeler Manufacturing Countries​

1. India ​

• Status: Largest manufacturer of two-wheelers in the world.
• Key Brands: Hero MotoCorp, Bajaj Auto, TVS, Royal Enfield, Honda Motorcycle & Scooter India (HMSI).
• Output: Over 20 million units per year (including domestic sales and exports).
• Strength: Mass production, affordable bikes, major export hub for Africa, Latin America, and Asia.

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2. China ​

• Status: Second largest manufacturer.
• Key Brands: Lifan, Zongshen, Loncin, CF Moto, Yadea (electric).
• Output: Around 15–18 million units per year.
• Strength: Cheap manufacturing, focus on electric bikes, strong domestic market, massive exports (especially to developing countries).

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3. Indonesia ​

• Status: Major two-wheeler producer and consumer in Southeast Asia.
• Key Brands: Honda, Yamaha (Japanese brands with local plants).
• Output: Over 5 million units/year.
• Strength: Local assembly for Southeast Asian market, strong internal demand.

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4. Vietnam ​

• Status: Significant regional manufacturer and consumer.
• Key Brands: Honda, Yamaha, Piaggio (localized production).
• Output: ~3 million units/year.
• Strength: Domestic demand + parts manufacturing.

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5. Thailand ​

• Status: ASEAN production hub for Japanese brands.
• Key Brands: Honda, Yamaha, Kawasaki.
• Output: ~2 million units/year.
• Strength: Exports to Asia, Europe.

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6. Japan ​

• Status: Pioneer in high-end two-wheelers.
• Key Brands: Honda, Yamaha, Suzuki, Kawasaki.
• Output: ~500,000 to 1 million units/year (mostly high-end or export-oriented).
• Strength: R&D, performance motorcycles, premium segment.

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7. Pakistan ​

• Status: Regional low-cost manufacturer.
• Key Brands: Atlas Honda, Road Prince, United Motors.
• Output: ~1.5–2 million units/year.
• Strength: Domestic demand; focus on 70-125cc bikes.

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8. Brazil ​

• Status: Largest in South America.
• Key Brands: Honda, Yamaha (localized).
• Output: ~1 million units/year.
• Strength: Latin American market.

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9. Taiwan ​

• Status: Known for scooters and e-scooters.
• Key Brands: Kymco, SYM, Gogoro.
• Output: ~600,000+ units/year.
• Strength: Innovation in electric two-wheelers.

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10. Italy ​

• Status: Home of premium scooter/motorcycle brands.
• Key Brands: Piaggio (Vespa), Ducati, Aprilia.
• Output: ~400,000–600,000 units/year.
• Strength: Stylish design, high-performance motorcycles.

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Summary Table​

Rank	Country	Approx. Production (Units/year)	Notable Brands
1	India	20+ million	Hero, Bajaj, TVS, Royal Enfield
2	China	15–18 million	Lifan, Zongshen, Yadea
3	Indonesia	5–6 million	Honda, Yamaha
4	Vietnam	3+ million	Honda, Yamaha, Piaggio
5	Thailand	2+ million	Honda, Yamaha
6	Pakistan	1.5–2 million	Atlas Honda, United
7	Brazil	~1 million	Honda, Yamaha
8	Japan	0.5–1 million	Honda, Yamaha, Suzuki, Kawasaki
9	Taiwan	~600,000	Kymco, SYM, Gogoro
10	Italy	~500,000	Piaggio, Ducati

 

[Krishna with Flute]

So far as car export is concerned, we exported 770364 cars last year. 15% increase over last year.

This year, in first quarter, our automobile export is 22% higher compared to last year.

Is everything clear now?

 

[Krishna with Flute]

The prospects for 2025 does not look good following higher car sales in 2024. 2024 increase was driven by post covid pent-up demand.

India is an interesting story - Two wheelers (and even 3 wheeler autos - tuktuks) count as "Cars" in India.

Two wheelers count as 78% for all "vehicles" made in India. Actual four wheeler cars are just 17% of this number.

Here is a nice wrap-up from January 2025 (note the yellow highlighted sections).

A year in review : The Indian auto sector | 2024

Read our latest insights on A year in review : The Indian auto sector | 2024

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A year in review : The Indian auto sector | 2024​

Mitt Siddhpura, Akhilesh Magal on E-mobility
January 17, 2025

As we close the chapter on 2024, India’s automotive sector reflects a dynamic narrative of challenges, resilience, and transformation. From post-COVID growth to a recent slowdown, shifting consumer preferences, and reduced EV subsidies, the industry reflects a mix of resilience and uncertainty.

With insights backed by data, charts, and expert analysis, we explore the journey of the auto sector from pre-pandemic highs to the uncertainties of today, and what 2025 and beyond might hold for the Indian economy’s critical pillar - the automotive industry.

Background​

India's auto sector is a cornerstone of the country’s economic growth, significantly contributing to GDP, employment generation, and attracting Foreign Direct Investments (FDIs).

Urbanization, rising incomes, and infrastructure development are playing a pivotal role in the demand and growth of the auto sector. Further the movement of the auto market towards cars, especially SUVs suggest that cars are an important positional good i.e. something that people derive social standing from. Additionally, the transition to electric vehicles (EVs) is central to India's sustainability goals, supported by government initiatives like FAME and PLI schemes. Hence, monitoring the sector’s growth is key to understanding India's economic trajectory, global competitiveness and clean-tech innovation.

In this article, we delve into how the automotive sector has evolved over the years, focusing on its post-COVID recovery and outlook for 2025 and beyond.

Looking back | The growth journey - 2017 to 2024​

During the pre-COVID era (2017–2020), India’s automotive industry experienced steady growth, driven by consistent demand and incremental sales across segments. However, the COVID-19 outbreak (2020–21) brought unprecedented challenges. While the pandemic was a global phenomenon, India’s economy faced a sharper impact due to stricter lockdown measures and mobility restrictions. This led to production halts, supply chain disruptions, and a significant decline in consumer demand.

The industry also witnessed a notable surge in automobile prices, driven by two key factors:

1. A global shortage of critical automobile components, particularly semiconductors.
2. The simultaneous implementation of BS-VI emission norms, which increased production costs.

These factors collectively led to a 50% increase in Average Selling Price (ASP) of passenger vehicles from ₹7.6 lakh in FY19 to ₹11.5 lakh in FY24, prompting a shift in consumer preferences.

View attachment 20430

Figure 1: Average Selling Price (ASP) of passenger vehicles



However, post COVID session (2021-2024) has witnessed pent-up demand, a strong recovery and rebound in sales despite the significant hike in automobile prices.

Figure 2: Vehicular category-wise sales | 2017-2024

While the industry observed a growing demand for premium and aspirational vehicles, sales of entry-level models struggled. During the first half of the FY22 compared to the same period in 2018–19, sales of passenger cars, including entry-level hatchbacks, declined by 24.7%, while utility vehicle sales surged by an impressive 111.6%. As reported in The Indian Express, cars priced above ₹10 lakh experienced a fivefold faster growth compared to those priced below ₹10 lakh.

This trend underscores the ongoing distress in the lower end of the auto segment, which has a cascading effect on the entry-level car market. Many consumers in this segment typically upgrade from two-wheelers, but the economic strain has limited their ability to do so. India, with a car ownership rate of just 7.5%, lags far behind other nations, reflecting its nascent automotive penetration.

Figure 3: Car ownership across various countries

View attachment 20432

Two-wheelers (2Ws) have been the back-bone of India’s auto-sector, remaining the most preferred mode of transportation for millions. In 2024, 2Ws constituted for ~78% of all vehicular sales.

Figure 4: Vehicular sales by category | 2024

View attachment 20433

Furthermore, 2Ws sales have shown significant progress with a double digit growth rate of 11% Year-on-Year (YoY) in 2024.

Figure 5: Two-wheeler sales | 2017-2024

However, a closer look at model-wise sales of two-wheelers reveals a notable trend similar to four-wheelers: the growing premiumization of vehicles. Between 2023 and 2024, premium two-wheelers outperformed mass-market commuter models, recording significantly higher growth rates as outlined in the figure below.

Figure 6: Two-wheeler vehicle segment growth rate FY2023-24

Moreover, while two-wheeler sales are still lower than the peak in 2019 in the pre-pandemic era, the four-wheeler sales have significantly increased by 30% in the same period.

Figure 7: Four-wheeler sales | 2017-2024

2024 | The beginning of a slowdown?​

The post-pandemic recovery of the Indian automotive industry has been a story of resilience and growth, but 2024 marks the beginning of an industry-wide slowdown after two consecutive years of strong demand. While overall vehicle sales remained subdued for most of the year, October stood out as an exception due to the alignment of three major festivals—Navratri, Dhanteras, and Diwali—in the same month.

Figure 8: Vehicular category-wise monthly sales | 2024

Uncharacteristically, December—the month typically associated with end-of-year discounts and high sales—saw a decline in demand, disrupting historical trends. According to an Economic Times report, Indian car dealers recorded a surprising 2% drop in sales in December 2024, reflecting broader economic pressures.

Where does your reference prove your point?

 

[Bilal9]

The point I was trying to make was that most countries of the world do not consider

So far as car export is concerned, we exported 770364 cars last year. 15% increase over last year.

This year, in first quarter, our automobile export is 22% higher compared to last year.

Is everything clear now?

The point I was trying to make was that most countries of the world do not consider two wheelers as "vehicles" .

Whereas in India they are.

So - the question would be, would the 770364 "cars" exported from India include two wheelers? Simple question - with a Yes or No answer.

And if yes, what percentage?

You are getting quite rude @Krishna with Flute - relax.

By the way - Indian two wheelers are all (at the root) copies of Japanese two wheelers.

From past 1990s JVs like Hero-Honda, Kawasaki-Bajaj, TVS-Suzuki etc. Everyone knows in India.

 

[Krishna with Flute]

The point I was trying to make was that most countries of the world do not consider


The point I was trying to make was that most countries of the world do not consider two wheelers as "vehicles" .

Whereas in India they are.

So - the question would be, would the 770364 "cars" exported from India include two wheelers? Simple question - with a Yes or No answer.

And if yes, what percentage?

You are getting quite rude @Krishna with Flute - relax.

By the way - Indian two wheelers are all (at the root) copies of Japanese two wheelers.

From past 1990s JVs like Hero-Honda, Kawasaki-Bajaj, TVS-Suzuki etc. Everyone knows in India.

I was talking about cars only and said that we are 4th largest producer. Had I talked about two wheelers, I would have said that we are no.1. We are behind in car manufacturing because we had not started selling cars in many countries. Now we have started doing that. Tata and Mahindra has started selling cars in Russia, US, Canada etc.

 

[Krishna with Flute]

Vehicle Type	FY 2023–24 (units)	FY 2024–25 (units)	YoY Change
Total Vehicles	4.50 million	5.36 million	+19%
Passenger Vehicles	0.672 million	0.770 million	+15%
Utility Vehicles	0.235 million	0.362 million	+54%
Two-Wheelers	3.458 million	4.198 million	+21%
Three-Wheelers	0.300 million	0.307 million	+2%
Commercial Vehicles	0.0658 million	0.08099 million	+23%

 

[Krishna with Flute]

Look at the rate at which our export is surging.

Summary Table: Q1 FY 2025–26 Export Performance​

Vehicle Segment	Q1 2024 Exports	Q1 2025 Exports	YoY Change
Passenger Vehicles	~180,483	~204,330	+13%
Two‑Wheelers	923,148	1,136,942	+23%
Three‑Wheelers	~72,000	~96,000	+34%
Commercial Vehicles	~15,780	~19,427	+23%
Total Autos	~1.193 million	~1.457 million	+22%

We rose at 22% over last year. This is great, phenomenal. Our Passenger vehicle rose at a rate of 15% last year and it is increasing at a rate of 13% this year. At this pace, we can overtake Japan in next 3 years and US in another 3 years to become the second largest exporters of cars.

 

[Krishna with Flute]

So - the question would be, would the 770364 "cars" exported from India include two wheelers? Simple question - with a Yes or No answer.

Only cars no two wheelers ok. Car export was 770364 units in FY 2024-25. It is increasing at 13% in first quarter 2024-25.

Our two-wheeler export last year was 4,198,403 units in 2024-25, 23% rise over previous year. In first quarter this year, it has increased by 23%.

India exported a total of 1,136,942 two‑wheelers, marking a 23% year-on-year increase compared to 923,148 units in Q1 FY 2024‑25 Maritime Gateway+10The Economic Times+10Moneycontrol+10. At this rate, we may end pu exporting 5200000 units of two wheeler.


Now everything clear?