India is becoming an increasingly important player in the global automotive industry, both in terms of vehicle production and vehicle sales. However, whilst the rapidly accelerating growth recently led to China becoming the world’s largest automotive market, recent growth in India has been from a much lower starting point.
A new report by AutomotiveWorld.com, entitled “India’s new vehicle market: prospects to 2015”, and two associated webinars on passenger and commercial vehicles, examine the prospects for the Indian automotive market over the next five years.
Although only around four million units separated the Chinese and Indian vehicle markets in 2010 (allowing for definition – Indian data includes two- and three-wheeled vehicles, which account for a large proportion of sales), passenger vehicles (including utility vehicles and MPVs) accounted for just 2.37 million of the 14.82 million vehicles sold in India
The Indian passenger car market was the second-fastest growing of the major markets in 2010, behind China (India 30%, China 33.2%).
At almost 14 million passenger vehicles and 18 million vehicles in total (allowing again for the inclusion or not of SUVs and MPVs in the definition of ‘passenger vehicles’), the market in China is still way ahead of India. Consider, however, the vast potential of the Indian market: 2.37 million passenger vehicles were sold in 2010 in a country where half of the 1.2 billion population is 25 years old or younger.
The Indian passenger car market was the second-fastest growing of the major markets in 2010, behind China (India 30%, China 33.2%). Indeed, the market has risen from around 1 million units in 2003 to almost 2.4 million units. Commercial vehicle sales have risen from around 260,000 units in 2003 to well over half a million units. In 2010, LCV sales stood at 259,747 units, and HCV sales totalled 367,288 units; the Indian commercial vehicle market was the fastest growing of the major automotive markets in 2010, with a growth of 45% far ahead of China’s 29.9%.
The Society of Indian Automotive Manufacturers (SIAM) has cautioned against a repetition of this rise in sales in 2011
Despite the market’s potential, however, it faces some particular short-term challenges. The Society of Indian Automotive Manufacturers (SIAM) has cautioned against a repetition of this rise in sales in 2011; SIAM president Pawan Goenka has said a continued growth rate of 30% would be difficult to maintain. Indeed, SIAM has not yet published a sales forecast for 2011 – this is expected in April 2011 following the publication of fiscal year results.
Crucially, however, the recent rise in the Indian passenger vehicle market was mostly from within an existing product range. Important new model launches planned for 2011 and 2012 are expected to keep the market buoyant as the automotive market adjusts to some key changes. Longer term, OEMs plan to accelerate model introductions, mixing up and broadening their existing offerings. GM India, for example, has just confirmed plans to launch six new models in India over the next two years.
The recent rise in the Indian passenger vehicle market was mostly from within an existing product range. Important new model launches planned for 2011 and 2012 are expected to keep the market buoyant as the automotive market adjusts to some key changes.
The commercial vehicle sector is also set to undergo some exciting changes. The growing importance of joint ventures between global CV manufacturers and domestic companies (Navistar and Mahindra and Mahindra, MAN and Force, Nissan and Ashok Leyland, and Volvo and Eicher) promises to shake up the market with a combination of all-new models and currently unavailable products which will make their way into the Indian market through the Indian JV partners’ distribution networks.
In the near-term, various economic factors will have an impact on sales. These, however, are likely to be counter-balanced (and possibly even outweighed) by a combination of new product launches and the demand in vehicles associated with any rapidly-growing economy.
Martin Kahl is Features Editor at AutomotiveWorld.com. editorial@automotiveworld.com
