India Automotive 2020 The Next Giant from Asia : Having already surpassed France, the UK and Italy and establishing itself as the sixth largest automotive market in the world, India is now expected to become the third largest by 2020.
That’s the prediction of a special report entitled “India Automotive 2020 The Next Giant from Asia” released by JD Power and Associates. It highlights that more than 2.7million light vehicles were sold in India in 2010, compared to just 700,000 in 2000 and with increased economic activity and a widening population this number is expected to reach 11million by 2020. This would make it the third largest behind China (expected to reach 35million in 2020); and the USA (17.4million).
The report highlights that India’s government has pushed policies that support the development of its automotive industry.
Among the policies it has introduced has been a reduction on the sales tax of small cars and financial incentives for car makers to build and export vehicles overseas. As a result, many car makers have switched production operations to the country and designed vehicles specifically for the market. During 2010, close to 80 per cent of all new passenger vehicles sold in the country were either mini cars or subcompact passenger cars – this compares to just 24 per cent in China and three per cent in the USA.
Nevertheless, the report highlights that there are some challenges ahead. India is still seen as having three deficits – international trade deficits; chronic government budget deficits; and an underdeveloped power generation and distribution infrastructure. As such, the country’s lagging infrastructure is seen as the biggest obstacle to growth but the Indian government has set aside billions for investment in power generation and road/rail networks.
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