NEW DELHI–India’s automotive and auto components industry leased approximately 5.4 million square feet of industrial space between 2024 and the first half of 2026, accounting for nearly 13% of the country’s demand for built-up industrial facilities during the period, according to a report released Wednesday by real estate consulting firm CBRE.
The findings highlight growing demand for larger manufacturing facilities as automakers and component suppliers expand production capacity, invest in electric vehicles and strengthen their export operations.
Domestic companies accounted for the largest share of industrial leasing activity, representing 57% of total space absorption in the automotive sector.
Companies based in the Asia-Pacific region contributed another 26%, while businesses from Europe, the Middle East and Africa accounted for 15%, the report found.
Pune emerged as India’s leading market for automotive industrial leasing, capturing 28% of total demand during the period.
The Delhi National Capital Region followed with a 25% share, while Chennai accounted for 20%, reflecting the continued concentration of automotive manufacturing activity in major industrial centers.
CBRE reported that automakers are increasingly seeking larger, technologically advanced production facilities as the industry adapts to changing manufacturing requirements.
Anshuman Magazine, Chairman and CEO of CBRE’s India, Southeast Asia, Middle East and Africa operations, said India’s automotive manufacturing industry is becoming more diversified as companies respond to rising domestic consumption and international demand.
He identified electric vehicle production, advanced automotive components and expanding exports as major factors reshaping the industry’s manufacturing landscape.
Magazine also emphasized the importance of industrial land availability, dependable infrastructure, utility services, skilled workers, established supplier networks and efficient logistics connections in determining where manufacturers establish new facilities.
The report found that demand for large industrial properties increased significantly during the first six months of 2026.
Facilities measuring between 100,000 and 200,000 square feet accounted for 46% of industrial leasing activity in the automotive sector.
Properties exceeding 200,000 square feet represented another 38% of total leasing demand.
Combined, these larger facilities accounted for 84% of automotive industrial leasing during the first half of the year, indicating a strong preference for large-scale manufacturing operations.
The expansion comes amid continued growth in India’s automotive industry.
According to CBRE, vehicle production reached approximately 35 million units in fiscal 2026, while automotive exports increased 14.7% year over year to about $26 billion.
The report also estimated that the automotive sector contributes nearly half of India’s manufacturing gross domestic product.
CBRE attributed the industry’s expanding industrial footprint to several factors, including stronger domestic vehicle demand, rising exports, increased electric vehicle production and growing investment in advanced automotive components.
These developments are influencing manufacturers’ decisions about where to establish production facilities and how much industrial space they require.
The automotive industry’s demand for warehouse space has also remained substantial.
Between 2021 and the first half of 2026, automotive manufacturers and related businesses leased approximately 12.4 million square feet of warehouse space across India, according to the report.
Chennai led the warehouse leasing market with a 29% share of total automotive-related demand.
Delhi-NCR ranked second with 22%, followed by Bengaluru at 14%.
Tire manufacturers, passenger vehicle producers and automotive component suppliers collectively accounted for more than two-thirds of the sector’s warehouse leasing activity during the period.
The findings suggest that India’s expanding automotive manufacturing operations are generating additional demand for industrial properties and logistics infrastructure, particularly in established automotive production hubs. (Source: IANS)
