In 2020, India secured its place as the world’s fifth-largest automobile market. Let’s cruise through the dynamic world of Indian auto stocks, providing insights into the top ten companies in this thriving industry. Join us as we rev up our engines and explore the investment potential of the Indian automotive sector!
The Context
The first automobile to travel on dirt roads was spotted by Indians in 1892. We haven’t looked back since the great Maharaja of Patiala (Punjab) bought a “French De Dion Bouton” steam-powered two-cylinder tricar in the past.
India surpassed Germany in terms of global auto sales in 2020 to become the fifth-largest market.
The contribution of the automobile sector to the overall GDP of India stands at 7.1 percent with an annual turnover of ₹7.5 lakh crores and an export of ₹3.5 lakh crores. With an annual turnover of ₹7.5 lakh crores and exports of 3.5 lakh crores, the automobile industry contributes 7.1 percent of India’s GDP overall GDP.
Auto production had a fantastic year in 2021, mostly thanks to cheap financing made possible by low interest rates and strong disposable incomes. The top Indian publication Economic Times said that “car sales increased by 27 percent in FY’21.”
After the demand booms of 2017 and 2018, sales exceeded the psychological 30 lakh-unit thresholds for just the third time in history. Affected by a scarcity of semiconductors with forthcoming deliveries and full-order books, this sector is expanding rapidly. India is also a prominent auto exporter and has strong export growth expectations for the near future.
Additionally, several measures taken by the Indian government and significant automobile manufacturers are anticipated to position India as a global leader in the two- and four-wheeled vehicle sectors.
Let’s begin by examining the top ten Indian auto stocks that are traded on the Indian Stock Exchange:
1. Tata Motors Ltd
Tata Motor holds the number 1 spot on our top 10 list of Indian auto stocks.
Tata Motors Ltd. is one of the leading Automobile Companies in India and the world, providing mobility solutions to over 175 countries.
They have a large selection of automobiles, trucks, buses, and utility vehicles in their inventory. On the list of the top 10 automobile companies in India based on turnover, the company is the largest.
The Company has a strong global network of 134 subsidiaries, associate companies, and joint ventures, including Jaguar Land Rover in the UK and Tata Daewoo in South Korea.
Tata Motors Limited (TML) offers automotive products, ranging from sub-one-tonne to 49-tonne Gross Vehicle Weight (GVW) trucks, small, medium, and large buses and coaches, and passenger vehicles.
TML is the leader in India’s commercial vehicle (CV) market with a market share of approximately 44%. With sales of ~3,31,182 vehicles in FY 2021, TML has gained market share in the Medium and Heavy Commercial Vehicle (MHCV), Intermediate Light Commercial Vehicle (ILCV), and Small Commercial Vehicle (SCV) segments.
Fun fact- Tata Motors created a special edition Safari back in 2003 (19 years ago), which featured a built-in PlayStation and a mini-fridge to keep the gamers cool. While India is currently enthusiastic about video games and SUVs, Tata Motors built this Safari back in 2003.
2. Maruti Suzuki India Ltd
Maruti Suzuki holds the number 2 spot on our top 10 list of Indian auto stocks.
Market leader in the passenger vehicle segment in India. Maruti Suzuki India Ltd. was established in 1981. A joint venture agreement was signed between the Government of India and Suzuki Motor Corporation (SMC), Japan in 1982.
After being acquired by SMC as a subsidiary in 2002, Maruti became the second-largest automaker in India in terms of revenue. The Company has grown to become SMC’s largest subsidiary in terms of both production output and sales. Currently, SMC owns 56.21 percent of the company’s shares.
According to market share as well, Maruti Suzuki is India’s largest automaker. Two cutting-edge manufacturing facilities owned by the company are situated in Gurugram and Manesar in Haryana, with a combined yearly production capacity of 1.58 million units.
Fun fact- At the time of its introduction in 1983, the Maruti 800 had a base price of ₹47,500. After winning the lottery, Mr. Harpal Singh of Delhi received the keys from Mrs. Indira Gandhi, who was the prime minister at the time.
3. Mahindra & Mahindra Ltd
Known for its innovative designs, M&M holds the number three spot on our top 10 list of Indian auto stocks. Mahindra & Mahindra Ltd., a mobility products and farm solutions provider, is the flagship company of the Mahindra Group.
It is one of India’s top auto manufacturers. The company has significantly expanded since it built its first car in 1947. According to overall sales, it ranks as India’s third-largest automaker.
Today, the Company offers a wide range of products and solutions ranging from SUVs to electric vehicles, pickups, commercial vehicles, tractors, two-wheelers, and construction equipment. It is without a doubt one of the leading Indian automobile companies.
Fun fact- M&M was originally founded in 1945 as a Steel Trading Company. Since the Mahindra brothers and Ghulam Mohammed collaborated to create the business, its original name was Mahindra and Mohammed. However, Mr. Mohammed was appointed finance cabinet minister of Pakistan in 1948, leaving the business in the care of the Mahindra brothers. Mahindra & Mahindra Limited was thereafter given its new name.
4. Hero MotoCorp Ltd
This pioneer in the two-wheeler segment is the fourth contender in the top 10 list of Indian auto stocks.
Hero MotoCorp Ltd. is the world’s largest two-wheeler manufacturer in 2001, in terms of unit volume sales in a calendar year, and has maintained the coveted title for the past 19 consecutive years.
With more than 90 million content customers worldwide, it continues to promote socioeconomic empowerment and progress through its assortment of products and services.
It became the only Indian two-wheeler company to set up a manufacturing base in Latin America when it started operations at its manufacturing facility in Colombia in 2016. The company is a part of the Hero group.
Hero MotoCorp currently has an annual combined production capacity of around 9 million units of two-wheelers. This is the fourth largest automobile company among the Top 10 automobile manufacturing companies in India.
Hero MotoCorp has quickly expanded its footprint to 37 countries spanning Asia, Africa, and South and Central America under the direction of Dr. Pawan Munjal, Chairman. With employees from many countries, including India, Bangladesh, Colombia, Germany, Austria, Japan, and France, Hero MotoCorp is a genuinely international company.
It is the dominant market leader in India, with over 50% share in the domestic motorcycle market. Hero MotoCorp has seven globally benchmarked manufacturing facilities, including five in India and one each in Colombia and Bangladesh.
Fun fact- The business was listed in Forbes magazine in 2006. The ranking included 200 businesses that customers believed to be among the most reliable. Hero Motocorp was on the list in the middle, which is still an accomplishment that many other businesses aspire to.
5. Bajaj Auto Ltd
Bajaj Auto Ltd. holds the number 5 spot on our top 10 list of Indian auto stocks. Present in over 70 nations, Bajaj Auto Ltd. is the world’s 3rd largest manufacturer of motorcycles and the largest manufacturer of three-wheelers.
Its footprint stretches over a wide range of industries, spanning automobiles (two-wheeler manufacturers and three-wheeler manufacturers). The company is a part of the Bajaj Group. Several nations in Latin America, Africa, the Middle East, South, and Southeast Asia are familiar with the Bajaj brand, and Bajaj Auto is regarded as the fourth-largest producer of three and two-wheelers in the globe.
Bajaj Auto International Holdings BV is a 100% Netherlands-based subsidiary of Bajaj Auto Ltd. Over the years, through this subsidiary, Bajaj Auto has invested a total of €198.1 million and holds approximately a 48% stake in KTM AG of Austria (KTM), the fastest-growing motorcycle brand in the world.
Fun fact- The most popular motorbike brand in Nigeria is Bajaj Auto.
6. Ashok Leyland Ltd
Ashok Leyland Ltd. is the flagship of the Hinduja group, is the 2nd largest manufacturer of commercial vehicles in India, the 4th largest manufacturer of buses in the world, and the 10th largest manufacturer of trucks.
With its headquarters in Chennai, this corporation has a global presence thanks to its 9 manufacturing facilities. It has 8 plants in India along with a bus manufacturing facility in Ras Al Khaimah (UAE). Ashok Leyland has a well-diversified portfolio across the automobile industry. Recently, Ashok Leyland was named India’s 38th-best brand.
Ashok Leyland has a product range from 2.5T GVW (Gross Vehicle Weight) to 49T GTW (Gross Trailer Weight) in trucks, 16 to 80-seater buses, vehicles for defense and special applications, and diesel engines for industrial Genset, and Marine applications.
In 2016, Ashok Leyland unveiled India’s first electric bus and truck that complied with Euro 6. Every day, over a million people go to their destinations on buses made by Ashok Leyland, and its 70,000 trucks keep our economy running.
Fun fact– Originally known as Ashok Motors, Ashok Leyland was formed through a merger with British Leyland. Given that the name of the business has developed into a reputable market brand, Hinduja Group opted not to modify it when they acquired it.
7. TVS Motor Company Ltd
TVS Motor holds the seventh spot on our top 10 list of Indian auto stocks.
TVS Motor Company Ltd. is the third-largest two-wheeler manufacturer in India, with a revenue of ₹19,468 Cr. (2021). The company has an annual production capacity of over 4.9 million vehicles.
The TVS Group operates in a variety of sectors, including those related to transportation, aviation, textiles, education, electronics, energy, finance, real estate, and housing.
Under its umbrella, there are more than 90 Companies.
The company operates four production facilities: one in Karawang, Indonesia, and three in India (Hosur, Tamil Nadu; Mysore, Karnataka; and Nalagarh, Himachal Pradesh).
Fun fact- After forming a strategic relationship with BMW Motorrad in April 2013, TVS began producing the BMW G310R in 2016. In December 2018, the Hosur plant where the motorcycle is produced rolled out its 50,000th G310R series unit.
8. Eicher Motors Ltd
Eicher Motors Ltd. (EML) is the listed parent of Royal Enfield, the global leader in middleweight motorcycles.
The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901. Royal Enfield manufactures its motorcycles in Tamil Nadu for the entire world with contemporary development facilities in Leicestershire, the United Kingdom, and Chennai, India.
In addition to motorcycles, Eicher has a joint venture with Sweden’s AB Volvo. Volvo Eicher Commercial Vehicles Limited (VECV) is driving modernization in India’s commercial vehicle space, and in other developing countries.
From 5 to 55 tonnes, VECV offers a full line of trucks and buses, and its integrated production facility in Pithampur, Madhya Pradesh, serves as the Volvo Group’s global hub for medium-duty five and eight-liter engines.
Fun fact- Before getting into the motorcycle industry, Royal Enfield was a manufacturer of lawnmowers and weapons. Rifles and handguns were once supplied to troops. You now understand the origin of the slogan “Made like a rifle.”
9. Force Motors Ltd
Force Motors Ltd. was established in 1958 by Shri. N. K. Firodia, with the vision to provide affordable commercial transport for the masses by harnessing the best available technology and offering economical, reliable, and efficient products.
Today, its product line comprises agricultural tractors, small commercial vehicles (SCV), multi-utility vehicles (MUV), light commercial vehicles (LCV), and special utility vehicles (SUVs). Therefore, Force can provide a solution for every problem.
Fun fact- Many of our readers may be surprised to learn that since 2015, Force Motors in India has been producing engines for BMW vehicles and SUVs. Engines range in size from 3- to 6-cylinder blocks.
10. SML ISUZU Ltd
Last, but not the least, SML Isuzu Ltd. ranks at number ten on our top 10 list of Indian auto stocks.
SML Isuzu Ltd. (SMLI) has been a trusted and reliable commercial vehicle manufacturer since 1985.
It has been making Light and medium Commercial Vehicles for Indian Customers for over 33 Years. It is the first company to produce and deliver state-artfully constructed buses, ambulances, and customized vehicles.
Japan’s Isuzu Motors and Sumitomo Corporation each own 15% and 44% of the company’s shares, respectively.
Fun fact- Originally founded as Swaraj Mazda Ltd, SML Isuzu Limited changed its name to SML Isuzu in 2011.
That concludes our ranking of the top 10 automotive businesses.
Note- The rankings are based on expansion projections, industry authority, and innovation potential.
If you think we’ve forgotten to include a company that you believe belongs here, please comment!
Frequently Asked Questions (FAQs)
1. Why are Indian auto stocks gaining attention from investors?
Indian auto stocks are gaining attention from investors due to the significant growth potential of the automotive industry in India. With India emerging as the world’s fifth-largest automobile market and the sector’s substantial contribution to the country’s GDP, investors are attracted to the opportunities presented by leading Indian auto companies. Additionally, factors such as increasing disposable incomes, cheap financing options, and strong export prospects contribute to the appeal of Indian auto stocks for investors.
2. What factors should investors consider when evaluating Indian auto stocks for investment?
When evaluating Indian auto stocks for investment, investors should consider factors such as market share, revenue growth, profitability, product portfolio, technological innovation, competitive positioning, regulatory environment, and macroeconomic trends. Additionally, factors specific to each company, such as brand strength, distribution network, production capacity, and export potential, should be carefully analyzed to make better investment decisions.
3. How does the Indian automotive industry contribute to the country’s economy?
The Indian automotive industry plays a crucial role in driving economic growth and development in the country. With a significant contribution to GDP, job creation, and exports, the automotive sector contributes to industrialization, infrastructure development, and technological advancement. Moreover, the sector stimulates ancillary industries, such as manufacturing, steel, rubber, and electronics, fostering a multiplier effect on the economy and enhancing overall prosperity.
4. What are some recent trends shaping the Indian automotive industry?
Several recent trends are shaping the Indian automotive industry, including the adoption of electric vehicles (EVs), technological advancements, changing consumer preferences, and government initiatives promoting sustainable mobility. Furthermore, the industry is witnessing increased collaboration and partnerships among manufacturers, focusing on research and development, innovation, and product diversification to meet evolving market demands and regulatory requirements.
5. Are Indian auto stocks suitable for all types of investors?
While Indian auto stocks offer potential opportunities for investors, they may not be suitable for all types of investors due to their inherent risks and market volatility. Investors should assess their risk tolerance, investment objectives, and time horizon before considering exposure to auto stocks. Moreover, diversification across sectors and asset classes is essential to mitigate risks and achieve a well-balanced investment portfolio. Consulting with a financial advisor can help investors determine the suitability of auto stocks based on their financial circumstances and goals.
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