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Indian Light Vehicle Market To Become Third Largest Globally By 2020

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Indian Automobile market has been going strong for the last few years and has caught the fancy of foreign automakers like Hyundai, Volkswagen etc.  The likes of Hyundai, Volkswagen, Chevrolet despite an existing portfolio of cars got the pulse of Indian automobile consumer right – Small/Light segment cars

Even as the luxury car segment continues to grow in India by leaps and bounds what with Tata-Jaguar Deal and other luxury car makers making a beeline for Indian markets, it is the small or the Light vehicle segment where the Indian auto markets seem poised for maximum growth.

Indian Automobile Industry

According to a recent study,

India is expected to become the third largest market in the world for light vehicles (passenger cars and light commercial vehicles) only behind China and USA

It is noteworthy that India currently occupies the 6th spot in global light vehicle sales. From 2.7 Mn light vehicles sold in 2010, the 2020 estimates are pegged at 11.9 Mn. This is a significant jump, but the macro trends suggest that the market for light vehicles in India can witness even more aggressive growth.

The purchasing power of consumers has increased considerably in the last few years. Add to that, the market is now full of choices in the small/light segment including cars from foreign manufacturers. Further, the increasing fuel prices though an overall concern for car sales could also provide helpful for light vehicle sales. As fuel prices go up, people with budgets for mid/large segment cars might prefer to invest in small segment cars for fuel efficiency.

The automobile sector in India is a critical sector as it depends on a large number of industries for raw materials. A positive growth for the light vehicle segment is also expected to positive impact other related industries.

I seriously hope the auto market in India keeps it pedal on the accelerator despite minor roadblocks like the recent strike at Maruti

What are your thoughts on the light vehicle market in India? Will India dictate terms in this segment in the years to come or will the demand taper off gradually?

  1. Ankit Agarwal says

    Altaf, i was planning to cover the worrisome issues that might come with the said increase in car numbers but decided against it. You have right covered all the major issues especially in terms of infrastructure. The infrastructure has to improve at a considerable pace if India has to manage 11 odd million light vehicles.

    In terms of following traffic rules and such, the less said the better :-D. Public transport is a key component but i think the reality is that as the purchasing power increases more and more people are going to buy cars. I am not sure subsidizing public transport will help a lot (for one i feel it is subsidized already, just that the service/experience is poor)

  2. Altaf Rahman says

    Its good news that more and more people own cars and drive to work places in privacy.
    On a different outlook, I feel that we are already choking on roads with the present level of vehicle density. I dread to imagine 11.9 million cars more every year instead of the present 2.7 million additional cars a year.
    The development of roads is not keeping pace with vehicular growth.
    I read some where that there are about 1,000 cities/towns with population of more than half million population. I assume most of the cars are purchased by these urbanites.
    Most of these places have road systems developed during british raj. We are just maintaining these roads at bare minimum levels. Even with the existing vehicles, we need lot of road widenings, new lanes, new roads, flyovers, signal systems etc. Without exapnsion of these systems or even lesser growth in exapnsion than vehicular growth will cause more choking.
    Having said that, expansion of road system is only half of the solution. The other half is people ourselves. We dont follow lane systems, signals, direction violations, park vehicles where roads are meant for traffic movement are some of the issues which if followed properly can increase existing road capacities by more than 50%.
    We know that we dont change ourselves unless pushed to a corner. Though we blame and curse traffic police for their attitudes (demanding bribes for letting you off the hooks, indifference to violations), we should actually give more powers to them to control us. No need to penalize for violations, simple punishments will bring out the gentlemen in us. For example, if a person is in a hurry to reach his destination he should start early. End of story. No excuses. If such people are caught breaking signal, a sinple detention of that person for 30 minutes at the spot is enough. Just tak ekeys of his vehicle and return after 30 minutes. Dont let him take a taxi and go. Force him to stay there. Just imagine the torture he goes through and he promises never to do such thing in his life as long as such rules exist.
    If one person is seen going through such punishment, everyone becomes a gentleman though at heart he is cursing the system. Never mind. Traffic police have got a job to do.
    Similarly ageing vehicles should be put to rest even by force. They spew more pollution in traffic jams, dont start on time when traffic is moving, dont move in sync with traffic. All registrations of such vehicles should be cancelled and should not be allowed to be sold or bought.

    While doing all these above, parellally each city / town worth its fame should encourage people to use public transport and make the public transport a pleasent experiance compared to private transport and cheaper (though it makes for a loss making venture. After all how many subsidies we are not giving to people? We are subsidizing petrol diesel, keorsine, fertiliser, power. Subsidizing public transport will be one more. It encourages people to move away from private vehicles Even a small percentage swing will have a big effect on traffic movement, pollution, import of crude bill etc)

    Just my two paisa :)

  3. Hemanshu Desai says

    Which are the fastest growing markets? any idea?

  4. Arun Prabhudesai says

    I think more importantly we need alternative source of energy…Petrol / Diesel are not going to last and the only way prices will go is "UP" !

  5. Arun Prabhudesai says

    I think more importantly we need alternative source of energy…Petrol / Diesel are not going to last and the only way prices will go is "UP" !

  6. Arun Prabhudesai says

    I think more importantly we need alternative source of energy…Petrol / Diesel are not going to last and the only way prices will go is "UP" !

  7. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  8. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  9. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  10. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  11. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  12. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  13. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

  14. Hemanshu Desai says

    petrol price cannot keep rising like this and if it does, it will surely put a spanner. are people going for more fuel efficient cars?

    1. Arun Prabhudesai says

      I think more importantly we need alternative source of energy…Petrol / Diesel are not going to last and the only way prices will go is "UP" !

    2. Hemanshu Desai says

      Which are the fastest growing markets? any idea?

  15. Anonymous says

    India surely has captured many huge brands and the TATA-Jaguar deal will certainly boost up its sales. Light vehicle market will surely beat all others in India as people are now more keen on buying cars because consumer buying power has increased a lot as compared to a decade earlier. Keeping in view the raise in buying power people will start shifting from light cars to luxurious cars as they have all the facilities that light cars lack.

  16. Anonymous says

    India surely has captured many huge brands and the TATA-Jaguar deal will certainly boost up its sales. Light vehicle market will surely beat all others in India as people are now more keen on buying cars because consumer buying power has increased a lot as compared to a decade earlier. Keeping in view the raise in buying power people will start shifting from light cars to luxurious cars as they have all the facilities that light cars lack.

  17. Anonymous says

    India surely has captured many huge brands and the TATA-Jaguar deal will certainly boost up its sales. Light vehicle market will surely beat all others in India as people are now more keen on buying cars because consumer buying power has increased a lot as compared to a decade earlier. Keeping in view the raise in buying power people will start shifting from light cars to luxurious cars as they have all the facilities that light cars lack.

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