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Indian Car Industry on a Growth Trajectory

June 23rd, 2016

By - CEM Team

Indian Automobile industry is one of the main focus sectors promoted for country’s development and is also a favourable sector under the ’Make in India’ Campaign. A country with huge population, increasing incomes and per capita expenditures, rising spends on luxury products and promotional regulatory policies certainly holds an opportunistic market potential, making it a lucrative investment geography for automobile companies around the world. Consult Emerging Markets also published an infographic recently capturing moves of leading global automobile companies for this geography.

As per estimates by Indian Brand Equity Foundation, the Indian auto industry is one of the largest in the world accounting for 7.1% of the country's gross domestic product. Briefing on the car industry specifically, domestic sales of passenger vehicles grew by 8.13% in April 2015-January 2016 over the same period last year. Within passenger vehicles, cars rose by 10.18%, during April -January 2016 over April-January 2015. Overall in FY2016, India’s car market grew at 7% with 10% growth in its mid-size market and 60% growth in the subfour metre SUV market during the same period.
Domestic sales of commercial vehicles rose 9.43% in April-January 2016 over the same period last year. Sales of medium & heavy commercial vehicles increased by 30.19%.

In order to encourage the domestic coastal movement of cargo, especially automobiles, by Ro-Ro ships from Mumbai, the Mumbai Port Trust (MPT) on announced reducing wharfage charges by about 60% and further reduction of 10% in shipping charges. This will help in bringing down the cost of cars/truck which may be passed on to the end consumers by the companies.

Maruti Suzuki India Ltd, Mahindra & Mahindra Ltd, Ford India Pvt. Ltd, Mahindra Reva Electric Vehicles Pvt. Ltd and Tata Motors Ltd have created a consortium that will help develop a supplier base for critical hybrid and electric vehicle components. The consortium’s efforts will feed into and off Prime Minister Narendra Modi’s ‘Make in India’ campaign and are timely, given India’s efforts to reduce vehicular pollution. Under these programmes, the government and industry plan to invest $1.85 billion each. In the Union budget this year, the government allocated $30 million for these programmes. Sales of electric vehicles in India rose 37.5% to 22,000 units in the year ended 31 March 2016, according to industry lobby group Society of Manufacturers of Electric Vehicles.

Source :News Reports

Indian Car Industry on a Growth Trajectory

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