India’s auto sector industrial leasing hits 5.4 million sq ft as manufacturers scale up: Report

New Delhi: India's automotive and ancillary sector leased around 5.4 million sq ft of industrial space between 2024 and the first half of 2026, accounting for nearly 13 per cent of the country's built-up industrial demand during the period, a report said on Wednesday.

According to a CBRE report, domestic companies remained the biggest drivers of demand, contributing 57 per cent of industrial space absorption, while occupiers from the Asia-Pacific region accounted for 26 per cent and those from Europe, the Middle East and Africa contributed 15 per cent.

City-wise, Pune emerged as the largest market for automotive industrial leasing with a 28 per cent share, followed by Delhi-NCR at 25 per cent and Chennai at 20 per cent.

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The report noted a growing preference among automotive companies for larger and more advanced manufacturing facilities.

Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, 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 as manufacturers plan larger, more technologically advanced facilities, competitiveness will depend on industrial land, reliable infrastructure and utilities, skilled talent, supplier networks and logistics connectivity.

During the first half of 2026, leases for facilities measuring between 100,000 sq ft and 200,000 sq ft accounted for 46 per cent of total industrial space take-up, while facilities larger than 200,000 sq ft contributed another 38 per cent, according to the report.

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Together, large-format facilities represented 84 per cent of industrial leasing in the sector.

Moreover, the report showed that vehicle production touched 35 million units in FY26, while automotive exports rose 14.7 per cent year-on-year to about $26 billion

The sector currently contributes nearly half of India's manufacturing GDP, it added.

CBRE said stronger domestic demand, rising exports, electric vehicle manufacturing and growing production of advanced components are broadening India's automotive manufacturing base and influencing location choices for new facilities.

On the warehousing front, the automotive and ancillary segment leased about 12.4 million sq ft between 2021 and the first half of 2026.

Chennai led warehouse leasing with a 29 per cent share, followed by Delhi-NCR at 22 per cent and Bengaluru at 14 per cent.

Meanwhile, tyre manufacturers, passenger vehicle makers and component suppliers collectively accounted for more than two-thirds of warehouse demand during the period, according to the report.