The domestic passenger vehicle (PV) industry is in a sweeter spot compared to other leading economies. Its growth, though on a smaller base compared to in China, the US or Japan, is significant and helping multinational automobile makers with an Indian operation to cushion the decline in other markets.
According to Society of Indian Automobile Manufacturers, the domestic PV market (cars, vans and utility vehicles) grew 7.6 per cent in January-November of 2015, helped by new launches, declining fuel prices and lower interest rate.
This growth rate is higher than in France, Britain, Germany and China, too. Those in Japan, the US and Brazil are on a decline.
In absolute numbers, too, the growth in number of vehicles sold in India (approximately 180,000 units more in Jan-Nov 2015) was higher compared to Germany (151,000 units), Britain (143,000 units) and France (101,000 units). In all of calendar year 2015, India sold 202,000 more vehicles compared to 2014 and grew 7.9 per cent to 2.77 million units.
“The growth of the Indian PV market was higher than in China, US, UK and Germany, on the strength of a high GDP growth rate of 7.3 per cent, a low vehicle population, rising disposable income and increasing road infrastructure. The future looks very positive and better to any of the global markets which are now experiencing saturation,” said Rakesh Srivastava, senior vice-president (sales & marketing) at Hyundai Motor India.
The India trend is also a shot in the arm for Suzuki, which last year saw a high double-digit decline in car sales in Japan, its home market. Domestic market sales of Maruti Suzuki grew 12 per cent.
“The Indian market looks better placed than most emerging economies due to low fuel prices, decline in interest rates and new launches at attractive prices. Most other economies that are driven by energy or commodity prices are facing a tough time. The growth in China has come on account of incentives offered on purchase of vehicles under 1.6-litre engine capacity,” said Abdul Majeed, a partner at Price Waterhouse and an expert.
“India is the only big emerging market that is actually doing well. An eight per cent genuine automotive growth is significant. Even on an absolute basis, eight per cent growth is great,” said Sudhir Rao, chairman and managing director at Skoda India.