The growth of Indian passenger vehicle (cars, utility vehicles and vans) market stood out among top volume markets globally in 2017.
With the growth of more than nine percent in sales, the domestic market is expanding at a pace faster than countries such as China, the US, Japan, Germany, the UK and France.
Data available for the January-November period of 2017 showed the domestic passenger vehicle market expanded to 2.98 million units against 2.73 million groups in the corresponding period of 2016, registering a growth of 9.15 percent.
This despite a partial impact of demonetisation in the initial months of the year and the introduction of the goods and services tax (from July 2017), which made bigger cars expensive. The Indian market, the fifth biggest, had grown at seven percent in 2016.
Data from the Society of Indian Automobile Manufacturers (Siam) showed the world’s biggest market for passenger vehicles, China, grew at sub two-percent to 22 million units during the specified period in 2017. This against a 15 percent growth registered in 2016. The second biggest market, the US, shrunk 11 percent to 5.58 million units. The country’s demand for passenger vehicles had contracted in 2016 by nine percent.
The only country (among the several top markets) to clock a high single-digit growth was Japan. The Japanese market reversed the declining trend of 2016 to grow at eight percent in the first 11 months of 2017, with sales of 3.41 million vehicles. The sales volume in the fourth most significant market, Germany, grew at three percent in the 11 months of 2017 to 3.18 million units. The UK saw a decline of five percent to 2.38 million vehicles. The country had grown at two percent in 2016.
Data showed that except for India and Japan, sales in most top countries have either moderated or at best remained flat in 2017. The Indian market was projected to stay on a growth path in 2018 as well.
Indian car sales would remain robust, growing at seven percent in 2018, supported by the impact of India's new GST as well as new model launches, according to a Moody’s report. The South Asian outlook has improved dramatically and should further recover in 2018, as IHS Markit has estimated this market would be up 7.3 percent from 2017, with demand from India accelerating after tax reforms.
India, most experts claimed, would emerge as the world’s third-largest market by 2020, when it can sell up to five million units.
The growth of Indian auto industry regarding sales volumes has happened over the last few years due to a surge in sales of automobiles. It may be noted that India, which is the third-largest economy in Asia, is the fastest growing primary automobile market in the world with a growth rate of 9.5%. In comparison, the German car market, which now stands at the fifth position, has a growth rate of only 2.8%. 3.8 million vehicles were sold in Germany last year. The Japanese car market, which is currently at the third position, enjoys a growth rate of 5.24%. 5.4 million vehicles were sold in Japan in 2016.
Another interesting detail here is that India and Brazil have grown at a similar pace. Many factors have a significant role to play in the growth of the Indian car market. Many new companies have come to India in the last few years, thereby giving the consumer many choices. Moreover, the per capita income in India has seen a steady improvement, which has made many to bring home a vehicle. Easy finance options also make it easier for potential buyers to buy a new car. Another factor is that of the ever-improving road network.
The most tremendous player in the car market of India has been Maruti Suzuki India Ltd, which enjoys a nearly 50% market share. India is the most significant automobile market for Suzuki, both regarding four-wheelers and two-wheelers. Even other companies, like Hyundai, Tata, Mahindra, and Ford have been doing better numbers than before. The resales market has also grown at a reasonable rate. Statistics show that the used car market in India is at least 2.5 times of the new car market, thereby clearly hinting at the significant number of people who choose to buy a used vehicle. At this rate, India is expected to soon become one of the top 3 car markets in the world.
More than 4 million units were sold last year, which, outraged Germany's 3.8-million vehicle sales. Moreover, the sales rose by a modest 2.8 percent during the same period. Sales volumes for some of the brand models such as Maruti Suzuki's Vitara Brezza and Hyundai's Creta retain their sales volume.
Our Government is focusing more on the infrastructure, stricter tabs overloading ban and macroeconomic environment management so that our sales volumes remain secure and stable during this year.
In the report of International business, India has surged ahead in the automobile sector thanks to a growing economy which has increased consumers incomes substantially, GDP has also doubled between 2007 and 2016 by 70% and according to World Bank data is currently at $1,700. Compared to 10 years ago, Indian road conditions have improved substantially, and secure finance schemes also make it easier for potential buyers to purchase a vehicle.
Of all the automakers in India, Maruti Suzuki India Limited ranks the first, commanding about 50% of the market. This leader in passenger vehicles saw sales increase 15% to over 1.6 million units in 2017 thus increasing its market share by 2.6% to 49.6%.
Car production in India will continue to grow further as more and more car brands are arriving here. Some of the existing brands are planning to open new plants to meet demand. By 2020, Maruti Suzuki alone aims to sell 2 million cars.