Indian Automobile Market Offers New Development Opportunities
20. December 2018
The latest global data shows that India has overtaken Germany to become the fourth largest automobile market in the world. Automobile sales, including passenger and commercial vehicles, in Asia’s third largest economy grew 9.5% last year, which is the fastest among major global markets. This puts India’s 2017’s sales at more than 4 million units, outpacing Germany’s 3.8-million vehicle sales which rose by a modest 2.8% in the same period.
It is expected that India will emerge as the world’s third-largest passenger vehicle market by 2021. The market for passenger vehicles in the country are evolving and a number of economic trends could help with meeting this target. Rapid urbanization means the country will have over 500 million people living in cities by 2030. Rising incomes will also play a role, as roughly 60 million households could enter the consumer class by 2025. At the same time, more people will join the workforce. Participation in the job market could reach 67 percent in 2020, as more women and youth enter the job market, raising the demand for mobility.
According to a report by the Confederation of Indian Industry (CII), India’s move towards a unified tax regime and the push for “Make in India” offer opportunities to establish and strengthen the local presence. In addition, relatively lower manufacturing costs make it possible to make the country an export hub for auto parts for new cars. India is targeting the deployment of five to seven million electric vehicles in the country by 2020 under the National Electric Mobility Mission Plan (NEMMP) 2020. A CII report states that NEMMP is targeting 400,000 passenger battery electric cars (BEVs) by 2020, which could lead to a reduction in fuel consumption of up to 120 million barrels of oil. CII also expects the new mobility solutions market to grow to around 2 trillion USD market by 2030.
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