When benchmarked with China, India is highly inadequate in sales of premium cars. The number of premium cars India sells annually is almost equal to what China sells in a week. Such huge volumes have enabled China to become an export powerhouse and the R&D hub of all major car manufacturers worldwide.
Premium cars involve high input of technology and software, a field where India has a high level of expertise. It is well-positioned to become a center of excellence for manufacturing premium cars. Increasing premium car manufacturing in the country would involve a review of our policies and building an eco-system for this. The tariffs in India are among the highest globally and are skewed against bigger cars. As a result, the premium car segment has the largest tax burden among all cars. A benchmarking of taxation in India compared to China, Mexico, Thailand, and Brazil, reveals that the taxes are the highest in India.
The Government of India has been taking proactive steps to develop a progressive automotive environment. The Automotive Mission Plan, the ‘Make in India’ and the new National Auto Policy are a few initiatives that have drawn the attention of global experts. The automotive sector contributes 7.1% to India’s GDP, compared to 14% in developed countries like Germany, and employs approximately 40 million people through its eco-system. This sector needs special attention from the policymakers and government to be able to achieve its full potential and reach the next level of growth.
This research report focuses on the large/ premium cars segment, contributes to approximately 70% of global sales turnover.
We have evaluated the market dynamics of premium cars in the country, studied the domestic penetration and export potential of premium cars, analyzed the government policy towards premium cars, and recommended measures to enhance the manufacturing of premium cars in India. The study involved primary and secondary research to understand the premium car market in India. We submitted our research report to the donor and, based on our insights, contributed a chapter to NITI Aayog’s India Manufacturing @2035.
Chandan Chowdhury is a Professor of Operations Management and Information Systems (Practice) at the Indian School of Business (ISB). He is also the Executive Director of the Munjal Institute for Global Manufacturing and the Punj-Lloyd Institute of Infrastructure Management at ISB.
Additionally, Professor Chowdhury serves as a Member of the Board of Governors at IIM Sambalpur and Lamrin Tech Skills University.
Before joining ISB, Professor Chowdhury worked in the corporate sector and was associated with three major multinational companies, where he held positions such as Managing Director and Country Manager. He served Dassault Systèmes for over five years, initially as Managing Director, India Geo, and subsequently as Vice President, Global Affairs.
During his last academic appointment, he was Professor, Dean (Academy), and Chairman of the Board of Research at IIM Mumbai (formerly known as NITIE- National Institute of Industrial Engineering, established as a joint initiative between the United Nations and the Government of India in 1963).
He is passionate about leveraging technology to make the world a better place. He served as an expert panel member at NITI Aayog (National Institution for Transforming India, Government of India), helping to develop the Manufacturing India@2035 roadmap. He is also Chairman of the Technical Committee (Management and Productivity) at the Bureau of Indian Standards.
Professor Chowdhury is currently leading several research projects of national importance, such as ‘A Decade of Infrastructure Development in India: trends and Insights’, ‘Challenges and Opportunities for accelerating MSME’s growth’, ‘Making India a Skill Capital of the World,’ ‘India’s readiness for the 4th and the 5th Industrial revolution,’ and ‘Future of Jobs’.
He holds an MS in Mechanical Engineering from the Budapest University of Technology and Economics, and a PhD from the Hungarian Academy of Sciences and Budapest University of Technology and Economics.
He holds an MS in Mechanical Engineering from the Budapest University of Technology and Economics, and a PhD from the Hungarian Academy of Sciences and Budapest University of Technology and Economics.
