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India’s domestic passenger vehicle industry is in a sweet spot when compared with other key economies. It performed better than all in the first eleven months of the 2015 calendar year. The sales seen in the Indian market, though on a smaller base than countries like China, US and Japan, are significant and helping multinational automobile makers with operations in Indian cushion declines in other markets.
According to data available with the Society of Indian Automobile Manufacturers (Siam), the domestic passenger vehicle market (cars, vans and utility vehicles) grew 7.64 per cent in January-November 2015, helped mainly by new launches, declining fuel prices and a lower interest rate. This growth rate is higher than those in France, UK, Germany and China. Other leading markets like Japan, US and Brazil have been on a decline.
In terms of absolute sales, growth in the number of vehicles sold in India compared with a year earlier (about 180,000 units more in Jan-Nov 2015) was higher than that in markets like Germany (151,000 units), UK (143,000 units) and France (101,000 units). In the entire 2015 calendar year, India saw sales of 2.77 million units, 202,000 units more than in 2014 at a 7.86 per cent growth rate.
“Passenger vehicle market growth in India was higher than in China, the US, UK and Germany, on the strength of a high economic growth rate of 7.3 per cent, low vehicle population, rising disposable income and increasing road infrastructure. The future looks positive and better than most global markets, which are now experiencing saturation levels,” said Rakesh Srivastava, senior vice-president (sales & marketing), Hyundai Motor India.
With rising sales, companies like Hyundai are getting greater prominence in India. The South Korean car maker’s India arm accounted for 9.6 per cent of the global sales of Hyundai (including those of affiliate Kia Motors) in 2015. The Indian units share of the global sale of 8.02 million units in 2015 was higher than 8.3 per cent in the total sales of 8 million units in 2014. Hyundai’s India sales in 2015 grew 15.7 per cent over a year earlier.
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 Suzuki’s Indian subsidiary, Maruti Suzuki, however, grew 12 per cent.
“India is the only big emerging market that is actually doing well. Eight per cent genuine automotive growth is significant. Even on an absolute basis, eight per cent growth is great”, said Sudhir Rao, chairman & managing director, Skoda India.