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.
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?