Evolution of Indian-made cars

The first car was driven on Indian roads in 1897, but the first Indian-manufactured car didn’t come out until 1942. We take out the history books and take you through a brief history of the fascinating evolution of Indian-made cars. From humble beginnings to becoming a global player, and how Indian-made cars have transformed the industry and shaped the driving experience for millions of people. We discuss the tariff commission, the iconic Ambassador and the game-changing Maruti 800. And also the milestones, innovations, and current trends that define the dynamic world of Indian-made cars.

The 40s and 50s

The automotive market before the ’40s was non-existent in India and the few cars that were present in India were imported from other countries. The 40s saw the introduction of Hindustan Motors and Premier which started out manufacturing cars based on foreign models. Hindustan Motors made cars based on Morris models while Premier models were based on Dodge and Plymouth among other General Motor models. Mahindra & Mahindra set up operations in 1945 and manufactured Jeep’s CJ series. JRD Tata started the Tata Engineering and Locomotive Company in the same year and focused on locomotives. 

The 50s saw the government tighten its grip on imports to encourage domestic production. In 1952, a tariff commission was set up, to come up with a plan to grow the Indian automotive industry. But this meant the exit of foreign companies such as Ford and General Motors due to heavy tariffs. In 1954, Tata and Daimler-Benz entered into a joint venture to manufacture trucks and those trucks bore the three-pointed star on the grille. 1957 saw the launch of the iconic Ambassador from Hindustan Motors and although the Ambassador is considered the first Indian car, it was based on the Morris Oxford Series III.

The 60s and 70s

In 1964, Premier introduced a competitor to the Ambassador in the form of the Padmini which was based on the Fiat 1100D. Manufacturers like Tata and Mahindra continued to focus on commercial vehicles as the sales of commercial vehicles were growing. 

From the ’60s to the ’80s, the market was dominated by the Hindustan Ambassador and Premier Padmini. The ’70s brought the green revolution and more emphasis was placed on tractors, scooters and commercial vehicles. The 1973 OPEC oil crisis brought in the need to switch to diesel engines as most cars at that time came with a petrol engine including heavy vehicles made for the military. Overall, the growth through these periods was slow because of the bureaucracy and less investment from foreign countries.

The 80s

In 1981, the rate of car ownership was one per 1000 people and most of these cars were either an Ambassador or a Padmini. In 1983, Maruti Udyog Limited was set up which gave the Indian public an actual option other than the Ambassador or Padmini for the first time in three decades. Maruti introduced the SS80 which was both more feature rich and fuel-efficient than the Ambassador. The 800 was the successor and went on to be the highest-selling car for many consecutive years. In 1986, the first Auto Expo was held in Delhi whose purpose was to showcase the current market and the future of the Indian automotive industry. The exports were slow during this period as well like before with Maruti Suzuki exporting a total of 480 cars. The government introduced the Motor Vehicle Act in 1988 which made vehicle insurance compulsory.

The 90s

The 90s brought growth like never before. During the period of liberalisation, the policies set up by the tariff commission were done away with and it brought much-needed foreign technology and investments to India. The Maruti-Suzuki alliance was the first one and later we saw multiple foreign ventures in India. Companies like Hyundai and Honda also entered the Indian market in these years. Tata also introduced its first passenger car, the Sierra in 1991. Companies during this time didn’t focus much on features and instead, the focus was on making fuel-efficient cars that didn’t cost a whole lot. Quality wasn’t all that good but the cars took you from A to B and that was enough in those times.

The 2000s

The 2000s continued the growth we saw in the 90s. Almost all major foreign brands had set up their plants in the country. We also saw the introduction of emission norms in the year 2000 to curb vehicular pollution. This period saw the inclusion of basic features such as a music player and AC as standard. Companies also started focusing on comfort features and making quality products. Maruti Suzuki launched the Swift in 2005 which was a huge success. Tata introduced the world’s most affordable car, the Nano in 2008. The 2000s also saw the export rise with Maruti and Hyundai exporting products to other parts of Asia and Europe. Supercar brands started seeing India as a viable market and brands like Porsche and Lamborghini officially entered India during this period.

The 2010s

The same trend continued in the 2010s and car sales continued to rise across all categories. Foreign brands also saw a lot of interest and companies like Audi and BMW gained a lot of customers. Companies reintroduced facelift models with more features. We saw the onset of electric cars in foreign markets and some of them even made it to India. Hybrid technology started coming to supercars to extract more performance. At the same time, we saw a decline in diesel vehicle sales, from about half of the market share in early 2010 to about 25% in 2019. Around the same time, CNG cars were also increasing in market size and several manufacturers started offering CNG variants alongside petrol and diesel alternatives. Multiple commercial vehicles ran on CNG alone. Maruti continued its dominance in passenger vehicles with its economical and fuel-efficient cars. Customer mentality had shifted by the end and they started looking for cars that were feature rich and had important safety features.

Current trends

India has come a long way from where it started. In 2021, India became the fourth-largest nation in terms of production, followed by becoming the fourth-largest in terms of valuation in 2022. In 2023, we became the third-largest nation in terms of sales.

India’s current market is dominated by feature-rich cars. The government has put policies in place for safer cars and companies are also paying a lot of attention to quality and safety. Cars like the XUV700 offer ADAS features and new cars are coming with more tech onboard. We are slowly progressing towards a green future yet big SUVs are still a thing. Customers are choosing compact SUVs over sedans in the same price range. Foreign markets have a fair share of all-electric vehicles and we are seeing a lot of these cars coming to India. A lot of companies have cut diesel engine options altogether following current Indian laws.