India auto sector leases 5.4 mn sq ft of industrial space in 2024–H1 2026: CBRE
Synopsis
Key Takeaways
India's automotive and ancillary sector absorbed approximately 5.4 million sq ft of industrial space between 2024 and the first half of 2026, representing nearly 13 per cent of the country's total built-up industrial demand over that period, according to a report released on Wednesday, 4 November 2026 by global real estate consultancy CBRE. The findings point to a sustained scaling-up of manufacturing capacity as automakers respond to stronger domestic sales, rising exports, and the accelerating shift toward electric vehicles.
Who Is Driving Demand
Domestic companies led industrial space absorption with a 57 per cent share, according to the CBRE report. Occupiers from the Asia-Pacific region contributed 26 per cent, while companies from Europe, the Middle East and Africa accounted for the remaining 15 per cent. The data underscores that while foreign manufacturers are expanding their Indian footprint, home-grown players remain the backbone of the sector's real estate appetite.
Key Cities Leading Industrial Leasing
Pune emerged as the largest automotive industrial leasing market, capturing a 28 per cent share of total take-up. Delhi-NCR followed at 25 per cent, with Chennai third at 20 per cent. The concentration of activity in these three cities reflects their established supplier ecosystems, port connectivity, and availability of skilled labour — factors that consistently influence location decisions for large-format manufacturing facilities.
Shift Toward Larger, Advanced Facilities
A notable structural shift is visible in the size profile of leases. During the first half of 2026, facilities measuring between 100,000 sq ft and 200,000 sq ft accounted for 46 per cent of industrial space take-up, while those exceeding 200,000 sq ft contributed a further 38 per cent. Together, large-format facilities made up 84 per cent of total industrial leasing in the sector — a signal that automotive manufacturers are consolidating operations into fewer but significantly bigger and more technologically sophisticated plants.
Anshuman Magazine, Chairman and CEO — India, South-East Asia, Middle East and Africa at CBRE, said India's automotive manufacturing base is becoming more diversified, 'with domestic demand providing scale while stronger exports, EVs and advanced components broaden the sector.' He added that competitiveness will increasingly depend on industrial land availability, reliable infrastructure, skilled talent, supplier networks, and logistics connectivity.
Production and Export Milestones
The CBRE report noted that vehicle production reached 35 million units in FY26, while automotive exports surged 14.7 per cent year-on-year to approximately $26 billion. The sector currently contributes nearly half of India's manufacturing GDP — a figure that places it at the centre of the country's industrial growth narrative. Stronger domestic demand, rising exports, EV manufacturing, and growing production of advanced components are collectively broadening India's automotive manufacturing base and shaping where companies choose to set up new facilities.
Warehousing Demand: A Parallel Surge
Beyond factory space, the automotive and ancillary segment leased approximately 12.4 million sq ft of warehouse space between 2021 and the first half of 2026. Chennai led warehouse absorption with a 29 per cent share, ahead of Delhi-NCR at 22 per cent and Bengaluru at 14 per cent. Tyre manufacturers, passenger vehicle makers, and component suppliers together accounted for more than two-thirds of warehouse demand during the period, reflecting the breadth of the supply chain now operating at scale across India.
With EV production ramps and export ambitions intensifying, analysts expect industrial and warehousing leasing by the automotive sector to remain robust through the rest of the decade.