Automotive looks to India for growth
09/05/2017
Total car sales in 2016 were 2.8 million, which analysts have pointed out equates to one new car sold for every 450 people in the country, compared to one for every 18 people in the US. This is giving industry observers and the automotive original equipment manufacturers who have established a good position in India optimism about growth.
Their enthusiasm for the Indian market comes at a time when a number of companies are concerned about a slow-down in growth in China this year because tax incentives that have driven what the Financial Times has described as “huge sales growth” in China, are coming to an end.
The biggest player in the Indian car market is Maruti Suzuki, a joint-venture between Suzuki and local partners, first established in the 1980s. This early-mover advantage means it still commands a share of 47% of the market.
Second-biggest is Hyundai, with a 16.7% share. Hyundai subsidiary Kia announced in April that it will invest $1.1 billion in its first Indian factory, choosing the state of Andhra Pradesh as the location.
At the other end of the spectrum, Porsche has said high import duties on luxury vehicles restricted its sales in India last year to just over 400 cars, compared to more than 65,000 in China.
Perhaps more surprisingly, the Tata Nano, billed as the world’s cheapest car at around $1,500 when it launched ten years ago, sold fewer than 10,000 units last year and, according to the Financial Times, there is talk of scrapping the project because Indian consumers appear not to want to be seen driving the world’s cheapest car. For Indian consumers, owning a car should mean “you’ve arrived in life”, IHS analyst Anil Sharma told the newspaper.
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