Passenger Vehicle Capacity Utilization in India: Trends, Challenges & Impact
- Team Autopunditz
- 6 minutes ago
- 3 min read
We have been covering production statistics for passenger vehicle OEMs for the last 10 years, and the articles can be found here.
India has evolved into one of the world’s most significant automotive hubs — particularly for passenger vehicles (PVs). Strong domestic demand, competitive manufacturing clusters, and global OEM investments have driven this expansion.
Leading manufacturers with major production plants include:
Maruti Suzuki India — Multiple facilities in Gurugram, Manesar, Kharkhoda (Haryana), and Hansalpur/Sanand (Gujarat). Plans are underway for an additional capacity expansion in Gujarat, which will add up to 1 million units annually.
Tata Motors — Manufacturing passenger vehicles primarily in Sanand, with expansion efforts aimed at growing capacity and market share.
Hyundai Motor India — A key OEM with a large plant in Chennai and another under development at Talegaon, driving output for both domestic and export markets.
Mahindra & Mahindra — SUV and utility vehicle specialist with plants at Kandla (Gujarat) and elsewhere.
Smaller global players — including Toyota Kirloskar, Kia Motors India, Honda Cars India, Renault/Nissan, and Skoda-VW India, each with localized production footprints.
New entrants & EV investors — VinFast has opened an EV plant in Thoothukudi, Tamil Nadu, with scalable capacity (50,000 → 150,000 units).
Manufacturing clusters in Gurgaon/Manesar, Chennai, Pune, Sanand (Gujarat), and Kolkata/Bengaluru underpin India’s automotive ecosystem.
Impact on the Manufacturing Plants on the Economy
Vehicle manufacturing is deeply intertwined with India’s economic fabric:
Economic & Supply Chain Growth: India’s large base of automotive component suppliers ensures that value is retained locally and contributes to industrial cluster development — especially in Gujarat, Tamil Nadu, Maharashtra, and Karnataka. Manufacturer investments often lead to improved highways, ports, and logistics — crucial for export competitive advantage. Collectively, these impacts accelerate industrialization, regional development, and GDP growth in both traditional and emerging automotive hubs.
Employment & Skill Development: Automotive plants employ hundreds of thousands of workers directly and support millions in the broader supply chain (component makers, logistics, dealerships, services). These jobs are concentrated around major industrial corridors.
Market Share Improvement: Manufacturer capabilities, enhanced through increased capacities, enable them to expand their volumes based on varying market potential.
Let us now assess the production capacity of the passenger vehicle OEMs:
Against the production capacity, let us see how the OEMs fared in CY2025 (*actuals data is for Jan-Nov 2025 average)
Capacity Utilization: What the Industry Is Experiencing
“Capacity utilization” refers to how much of an OEM’s installed plant capacity is actually used to produce vehicles. It’s a key indicator of operational efficiency and market balance between demand and supply.
Maruti Suzuki, Mahindra, Toyota, and Skoda had high capacity utilization in Jan-Nov 2025 (~80%+).
Broader industry studies estimated average utilization around ~65–70% across OEMs — suggesting unused capacity remains a feature for several players due to fluctuating demand, product mix changes, and supply chain challenges.
Also, note that certain OEMs are utilizing the capacity for Exports. Renault, Nissan, VW, Citroen & FCA have capacity utilization >50% dedicated to export markets.
Challenges & the Road Ahead
Despite progress, challenges remain:
Optimizing Utilization: Not all facilities run at peak efficiency; balancing production versus demand, especially for EVs, will be critical.
Component Dependencies: Global supply chain disruptions can affect plant throughput.
Export Hurdles: Logistics efficiency, trade barriers, and competition from Thailand and China require strategic policy alignment.
