Auto Manufacturing Lease Demand Surges to 5.4M Sq Ft
India’s automotive supply chain has secured approximately 5.4 million square feet of industrial property between 2024 and the first half of 2026. This leasing activity represents roughly 13 percent of the total manufactured industrial space demand nationwide during the period.
Domestic firms led the charge, absorbing 57 percent of the total leased area. Companies operating from the Asia-Pacific region contributed 26 percent, while European, Middle Eastern, and African entities accounted for the remaining 15 percent.
Pune has firmly established itself as the top location for automotive industrial leases, holding a 28 percent market share. The Delhi-NCR region ranked second with 25 percent, and Chennai placed third at 20 percent.
Vehicle producers are increasingly favoring the construction of vast, technologically advanced manufacturing complexes. This strategic pivot aligns with broader operational scaling goals.
Industry leaders emphasize that India’s automotive production base is diversifying rapidly. Sustained domestic consumption underpins mass production, while robust export growth, expanding electric vehicle lines, and heightened output of sophisticated components are accelerating sectoral growth.
Future facility success will depend on access to suitable plots, dependable infrastructure, skilled labor pools, strong supplier networks, and seamless logistics integration.
Facility sizing data indicates that leases between 100,000 and 200,000 square feet captured 46 percent of total demand in the first half of 2026. Sites larger than 200,000 square feet made up 38 percent. Large-scale industrial operations collectively dominate the market, representing 84 percent of all automotive leasing.
Production targets are ambitious, with national vehicle output projected to reach 35 million units in fiscal year 2025-26. Concurrently, auto exports are expected to climb 14.7 percent annually, reaching approximately $26 billion.
The sector currently contributes nearly half of India’s manufacturing GDP. In logistics real estate, around 124 million square feet were leased from 2021 through mid-2026. Chennai dominated the warehousing segment with a 29 percent share, followed by Delhi-NCR at 22 percent and Bangalore at 14 percent. Tire manufacturers, passenger car builders, and auto component producers drove over two-thirds of total warehouse demand.