India's automakers are no longer just adding capacity. They are changing the kind of factory they build. A new CBRE report shows the automotive and ancillary sector leased around 5.4 million sq ft of industrial space between 2024 and the first half of 2026. That is nearly 13 per cent of the country's total built-up industrial demand over the period. The more telling number is how much of that space went into very large facilities.
In the first half of 2026, leases for facilities of 100,000 to 200,000 sq ft made up 46 per cent of total industrial take-up. Facilities larger than 200,000 sq ft added another 38 per cent. Together, these large-format sites accounted for 84 per cent of the sector's industrial leasing. Small sheds and stopgap units are giving way to integrated, technology-heavy plants designed for long production runs.
Domestic companies remain the main source of demand, with a 57 per cent share of industrial space absorption. Occupiers from the Asia-Pacific region took 26 per cent, while those from Europe, the Middle East and Africa contributed 15 per cent. The split suggests Indian manufacturers are setting the pace, while foreign players are steadily expanding their local supply chains.
Pune emerged as the largest market with a 28 per cent share. Its long-established auto cluster and supplier base continue to draw expansion. Delhi-NCR followed at 25 per cent and Chennai at 20 per cent, so India's three traditional auto belts together captured nearly three-fourths of the activity.
Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE, said India's automotive manufacturing base is becoming more diversified. Domestic demand provides scale, he noted, while stronger exports, EVs and advanced components are broadening the sector. He added that as manufacturers plan larger and more advanced facilities, competitiveness will depend on industrial land, reliable infrastructure and utilities, skilled talent, supplier networks and logistics connectivity.
Why this matters beyond real estate
These leasing trends reflect the industry's wider momentum. According to the report, vehicle production touched 35 million units in FY26, and automotive exports grew 14.7 per cent year-on-year to about $26 billion. The sector now contributes nearly half of India's manufacturing GDP. Factory location choices therefore shape jobs, state revenues and industrial growth across the economy.
The move to bigger facilities also puts pressure on states and developers. Land parcels, power, water and road connectivity at this scale are hard to put together quickly. Clusters that can deliver ready-to-use infrastructure will be best placed to attract the next round of EV and advanced-component investment.
Warehousing shows the same pattern. The automotive and ancillary segment leased about 12.4 million sq ft of warehouse space between 2021 and H1 2026. Chennai led with a 29 per cent share, followed by Delhi-NCR (22 per cent) and Bengaluru (14 per cent). Tyre manufacturers, passenger vehicle makers and component suppliers together accounted for more than two-thirds of that demand.
The report points to a sector preparing for sustained volume growth. If exports keep rising and EV production scales up, competition among states for the next large factory is likely to intensify.
