India’s automotive industry has long been a vital pillar of the country’s economic development. With rapid technological progress and changing consumer preferences, the sector is evolving like never before. As we approach 2025, this transformation is being propelled by shifting market demands, government support, and a growing focus on electric mobility. For investors, automobile stocks present a promising avenue to be part of this dynamic shift. In this blog, we’ll delve into some of the top automobile stocks in India based on 5-year CAGR performance, while also exploring potential penny stocks in the auto sector and upcoming EV collaborations, such as those involving Fiat Chrysler Automobiles.
The automobile industry in India stands as a vital engine of economic growth, currently ranking as the fourth-largest automobile market in the world and poised to climb to the third position by volume in the coming years. This remarkable trajectory is being driven by a blend of rising disposable incomes, rapid urbanisation, improved rural road networks, and an aspirational middle class that sees vehicle ownership as both a necessity and a status symbol.
The auto manufacturers industry spans a wide spectrum from two-wheelers and passenger cars to commercial vehicles and tractors, making it a comprehensive contributor to GDP, employment, and exports. Moreover, government initiatives such as the Production Linked Incentive (PLI) scheme for automobiles and auto components, the FAME II scheme for electric vehicles, and scrappage policies are further strengthening the backbone of the sector.
Consumers play a crucial role in this growth, with rising disposable incomes leading to increased vehicle purchases. Although the sector faced turbulence during the COVID-19 pandemic and subsequent global semiconductor shortages, it has since shifted gears. Recovery is being fueled by robust demand in both urban and rural areas, coupled with technological upgrades, cleaner fuel adoption, and digitisation across the value chain.
This resurgence is visible in the performance of automobile stocks in India, with several leading players delivering impressive returns over the past five years. Not just limited to large-cap players, even penny stocks in the automobile sector have seen renewed interest from retail and institutional investors alike.
As we move toward 2025, the sector is entering an exciting new phase, marked by electric vehicle adoption, automation, and global collaborations such as those involving Fiat Chrysler Automobiles stock and Indian manufacturers. For investors seeking long-term growth, this presents a fertile ground of opportunities.
You may also want to know the Best Railway Stocks in India for 2025
The 5-year CAGR (Compound Annual Growth Rate) is a useful metric for evaluating the consistent growth of a stock. Below are some of the best automobile stocks in India that have shown impressive CAGR over the past five years: Analysts expect that the focus on electric and hybrid vehicles will continue to drive growth in the sector, with significant impacts on stock performance.
Market Cap: ₹ 3,59,834 Cr.
5 yr CAGR (Return over 5 yr): 23.85%
About: Maruti Suzuki India Ltd was incorporated in 1981. The company became a part of Suzuki Motor Corporation (SMC), Japan, through a joint venture with the Government of India in 1982 and turned into its subsidiary in 2002. SMC currently holds a 56.28% stake. Maruti operates in the manufacturing, purchasing, and distribution of motor vehicles, components, and spare parts. The company has added new models to meet changing customer preferences and continues to be active in the passenger vehicle segment.
Market Cap: ₹ 3,24,331 Cr.
5 yr CAGR (Return over 5 yr): 56.22%
About: Founded in 1945, Mahindra & Mahindra Ltd operates across multiple automotive categories, including two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, tractors, and construction equipment. The company also has business interests in sectors such as financial services, logistics, hospitality, IT, agriculture, and defence. It supplies products to a wide range of users, including commercial operators and government institutions.
Market Cap: ₹ 2,26,734 Cr.
5 yr CAGR (Return over 5 yr): 58.54%
About: Tata Motors Ltd is part of the Tata Group and produces a variety of vehicles, including passenger cars, commercial trucks, buses, and defence vehicles. The company is active in several international markets, including the UK, South Korea, South Africa, and others. Its group includes notable names such as Jaguar Land Rover and Tata Daewoo. Tata’s portfolio features several utility vehicles that appeal to both personal and business segments.
Market Cap: ₹ 2,15,707 Cr.
5 yr CAGR (Return over 5 yr): 31.22%
About: Based in Pune, Bajaj Auto manufactures two-wheelers and three-wheelers and exports to multiple countries across Latin America, Southeast Asia, and other regions. The company holds a 48% interest in KTM, a manufacturer of sports motorcycles, an increase from 14% in 2007.
Market Cap: ₹ 1,44,905 Cr.
5 yr CAGR (Return over 5 yr): 33.51%
About: Eicher Motors, established in 1982, operates as part of the Eicher Group and is known for its involvement in motorcycles and commercial vehicles. It has a joint venture with AB Volvo (Sweden), forming Volvo Eicher Commercial Vehicles Limited (VECV), which is engaged in the manufacture of trucks, buses, auto components, and related services.
When it comes to choosing the best automobile stocks to buy in India, investors must evaluate both growth potential and resilience. In addition to Indian companies, global giants like General Motors and Ford Motor are also making significant strides in the Indian market. Here are some top picks:
These represent some of the best automobile stocks to buy based on fundamentals, innovation, and long-term vision.
If you’re a high-risk-high-reward investor, the penny stocks in the automobile sector can offer multi-bagger potential. However, these require deep research and caution.
Parts suppliers are also gaining attention as they play a crucial role in the supply chain and are investing in new technologies.
Always assess the balance sheet, promoter holding, and future outlook before investing in penny stocks in the automobile sector.
You may also want to know the Best Semiconductor Stocks in India for 2025
The EV revolution is shaping the future of the Indian automobile market. Government initiatives like FAME II and state-level subsidies have led to a surge in EV adoption. According to investment advice from Motley Fool, companies focusing on electric mobility are expected to see significant growth.
While Fiat Chrysler merged with PSA Group to form Stellantis, their involvement in India continues through partnerships with Tata Motors and the Jeep brand. Although Fiat Chrysler Automobiles stock isn’t directly listed in India, global investors tracking automobile innovation are keeping a close watch on Stellantis for its EV initiatives.
In India, brands like Tata Motors, Mahindra Electric, and Ashok Leyland are driving EV innovation, presenting exciting opportunities for investors.
Here’s a breakdown of the automobile stocks in India across different categories:
Investors looking at car stocks should also consider the performance of commercial vehicle manufacturers, as they often provide insights into broader market trends.
This automobile stocks list offers diversification across segments and helps investors target their focus based on growth areas.
Several catalysts are pushing the growth trajectory of automobile stocks in India:
With India’s GDP per capita steadily increasing, there has been a notable rise in consumer purchasing power. A growing middle class, increased employment opportunities, and access to easy financing options have made vehicle ownership more attainable. Two-wheelers and entry-level cars are particularly popular in Tier II and Tier III cities, where rising incomes are driving first-time vehicle purchases. This surge in demand directly benefits automobile manufacturers, fueling sales and boosting stock performance.
Urbanisation is happening at an unprecedented pace in India. As more people move to cities, the need for personal and public transportation solutions has surged. Parallelly, government investment in road infrastructure such as national highways, expressways, and metro projects is improving last-mile connectivity. This fuels demand not just for passenger vehicles but also for commercial vehicles and last-mile transport solutions. For investors, this translates into better earnings potential for listed companies, making automobile stocks a compelling opportunity.
India is embracing electric mobility with open arms. Government initiatives like FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and state subsidies are driving demand for electric vehicles. The introduction of tax incentives, lower GST rates on EVs, and incentives for battery manufacturing are encouraging both consumers and manufacturers to make the shift.
Companies like Tata Motors, Mahindra Electric, and Olectra Greentech are leading the charge in India’s EV transition. For investors, this ongoing shift provides exposure to a futuristic industry with huge upside potential reflected in the increasing traction of EV-centric automobile stocks in India.
India has cemented its place as a global hub for the production of affordable and reliable vehicles, especially two-wheelers and compact cars. Indian auto manufacturers export to over 100 countries, with Africa, Latin America, and Southeast Asia being key markets. This global exposure reduces dependency on domestic demand and opens up avenues for forex earnings and brand expansion.
For investors, companies with strong export pipelines (like Bajaj Auto and TVS Motors) offer diversified revenue streams, making their automobile stocks resilient and potentially high-yielding.
The Government of India has introduced the Production Linked Incentive (PLI) Scheme for the auto sector to promote domestic manufacturing of advanced automotive technologies, including EVs, hydrogen fuel cells, and high-end auto components.
Combined with the broader ‘Make in India’ campaign, these incentives are designed to reduce reliance on imports and position India as a global auto manufacturing hub. The scheme is already attracting investments from global auto giants and Tier-1 component suppliers, bolstering the long-term growth of the sector.
These reforms directly impact the valuations of automobile stocks, especially companies involved in innovation, localisation, and sustainability.
Selecting the right stock requires a blend of quantitative and qualitative analysis:
As we move toward 2025, India’s automobile sector stands at the intersection of innovation and opportunity. From established giants like Maruti Suzuki and Tata Motors to rising EV-centric players and penny stocks in the automobile sector, the landscape is filled with dynamic investment avenues.
The sector’s evolution, fueled by government support, changing consumer preferences, and electrification, is unlocking long-term value for equity investors. Whether you’re looking for stability through blue-chip auto stocks or chasing high-growth potential in lesser-known names, there’s a space for every investor.
At Jainam Broking Ltd., our research-backed insights and advisory services are designed to help you identify the best automobile stocks in India, align your portfolio with market trends, and tap into emerging opportunities. From navigating the automobile stocks list to analysing Fiat Chrysler Automobiles stock developments and identifying the best automobile stocks to buy in India, we’re here to power your investment journey in the auto sector.
So, are you planning on trading in the stock market? If yes, you are at the right place!
Open a Free Demat Account with Jainam Broking Ltd. Now!
Written by Jainam Admin
1 users read this article
Some of the best automobile stocks to buy in India based on 5-year CAGR performance include Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Bajaj Auto, and Eicher Motors. These companies show strong fundamentals, innovation, and long-term growth prospects.
The automobile stocks list includes two-wheeler makers like Hero MotoCorp and TVS Motors, passenger vehicle leaders like Maruti Suzuki and Tata Motors, CV players like Ashok Leyland and VECV, and auto ancillaries like Bosch and Minda Industries.
Yes, penny stocks in the automobile sector, such as Olectra Greentech, SML Isuzu, and JBM Auto, can offer high returns but come with higher risk. Due diligence and long-term vision are essential when investing in such stocks.
The best automobile stocks in India typically have strong financials, high return on equity, consistent CAGR, low debt levels, and leadership in innovation, particularly in EV and future mobility solutions.
Based on 5-year CAGR, the top performers include Tata Motors (58.54%), Mahindra & Mahindra (56.22%), and Bajaj Auto (31.22%), making them some of the best automobile stocks to watch in 2025.
While Fiat Chrysler Automobiles stock (now Stellantis) isn’t directly listed in India, its collaborations, especially with Tata Motors and Jeep, make it relevant for tracking innovation in EVs and global auto trends.
To pick the best automobile stocks to buy in India, look at growth in earnings, R&D in electric vehicles, debt levels, and ROE. Monitor industry trends and choose companies leading in their segment or adapting well to change.
Yes, automobile stocks in India offer a strong long-term outlook due to rising domestic demand, global exports, and the shift toward EVs. Choosing quality stocks with consistent performance can lead to rewarding outcomes.
The stocks mentioned here are for informational purposes only and should not be considered recommendations. Please do your research and analyze stocks thoroughly before making any investment decisions. Jainam Broking Limited does not guarantee assured returns or future performance of any securities or instruments.
Apr 16, 2025
13 min read
Apr 14, 2025
16 min read
Apr 14, 2025
9 min read
Get the link to download the App
Download Jainam Mobile App
