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Old 4th February 2011, 09:15   #1
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Default Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

High Points:

- A recent study conducted by Booz & Co. reveals that the widespread paradigm shift of the global economy in Asia towards the automotive industry will drive India to bag 4th position in the global market by 2015 and surpass the European Nations.

- India's automotive sales to exceed the US market by mid 2030s with potential revenues of $150 - $200 billion.

- “Our research portrays that with the rapid expansion of the automotive industry in India, it is expected to surpass the European nations by 2015 and generate sales upto 6+ million units annually by 2020. With China and India ramping up in parallel directions, the global auto industry is sure to get reshaped, thus propelling Asia to capture 65% of the total market size by 2020 says Vikas Sehgal, Partner, Booz & Company, India.

- Over the next 20 years, India will be part of global automotive triumvirate - the global BIG 3 in light passenger vehicle segment.

- The automotive industry is one of the leading industries in India for FDI, and the U.S. automakers have made considerable investments since the early-1990s. With a large and growing middle class population, the smaller car segment has seen a fair upswing in recent years as per the report. As income levels go up, the share of larger cars will also increase in the times to come. There is a potential for Indian market to touch revenues of $150 - $200 billion by 2030, projecting that India will soon be bigger than most other markets. The FDI in the auto sector is expected to exceed that in most other sectors. India is likely to attract $ 25-35 billion in FDI over the course of the next 10 years for the automotive industry.
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Old 4th February 2011, 09:29   #2
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

For those of you interested in knowing more, and seeing detailed graphs, I'm attaching a powerpoint presentation by Booz & Co. to this post (Zip File).
Attached Files
File Type: zip India Automotive Market 2020.zip (1.28 MB, 508 views)
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Old 4th February 2011, 10:15   #3
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

I don't know whether we should feel cheerful or frightened by this prediction.

India is already overburdened by human population explosion and our country is ill prepared for such a population explosion of vehicles. Though government is constructing the roads at a fast pace, their planning and designing leaves a lot to be desired and are outright faulty in most of the places. The moment a new bypass is announced near any town, all farm land adjoining the proposed road is snapped up by land sharks and 'plotting' is done. By the time the new road is ready, all adjoining area gets populated and it becomes an extension of the city rather than the bypass road. The netas and babus who permit the land use conversion from agriculture to residential or commercial in such areas are simply bothered about their "cut" and even don't have the brains to visualize the damage due to their permission. Within few years the new road is saturated with local traffic and again a new bypass road is planned. The netas, babus and land sharks are the chief beneficiaries of the old bye pass while the entire cost was borne by the nation. All the so called highways exiting from any major city are saturated by construction on both sides even upto 60-70 kms and it takes 1-2 hours to exit from any big city in any side.

We don't know the road manners or driving laws. Our vehicles are never subjected to any road worthiness test. Road rage is increasing and penalties for causing accidents are laughable due to antique laws. City roads are already over crowded rather choked by vehicles of all sorts. And sorry to say there is hardly any indication of any improvement in the situation.

We as a nation should first of all get ourselves ready mentally, legally and infrastructure wise for a higher vehicle density, before allowing more vehicle production. Emphasis should also shift towards better public transport so that general public do not feel the need of their own vehicle, else we are heading for chaos.
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Old 4th February 2011, 10:29   #4
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Intresting report. This sure is anyways good news for customers in general with new launches and tighter competetion. However the question is will our roads be able to support even half of that.
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Old 4th February 2011, 15:50   #5
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Quote:
Originally Posted by akj53 View Post
I don't know whether we should feel cheerful or frightened by this prediction.
akj53, you have put it very well. I fully agree with you. With the increase in production and demand of personal vehicles, roads and the corresponding infrastructure would be under pressure, resulting in new developments, which in turn would lead to corruption.Not to mention the increase in road rage, traffic congestion , accidents and pollution.
Iam not againt India becoming an auto hub, but we should first develop the required mentality and change the ancient traffic laws, while controlling the rampant corruption and population. We need to encourage and modernize the public transport systems.
In spite of all the negatives mentioned above, there seems to be a silver lining in the form of the likely substantial exports by the automobile industry, which may boost the Indian economy.
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Old 4th February 2011, 16:02   #6
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

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Originally Posted by auto-one View Post
Iam not againt India becoming an auto hub, but we should first develop the required mentality and change the ancient traffic laws, while controlling the rampant corruption and population. We need to encourage and modernize the public transport systems.
+1 to that. What is clearly missing here is any thought or planning being done on the part of government to handle this ever increasing mess. Without a robust, dependable and extensive public transport we wont be able to utilize the full benefits of the ever increasing mobility of Indian masses. Or someone should cut our population by half, but I digress.
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Old 5th February 2011, 10:49   #7
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Quote:
Originally Posted by akj53 View Post
We don't know the road manners or driving laws.
Absolutely agree with this point. In Bangalore, Bannerghatta Road is so pathetic, there are 10s of IT companies on this road starting from Dairy Circle till Meenakshi temple, but the road is clogged through-out the day. Auto wallahs create havoc parking on the side-lane and sometimes in the middle of the left-lane, cabbies drive recklessly, two wheelers navigate if there's even 2 inch space. Above that there are big potholes, uncovered sewage man-holes sometimes right on the left-lane of the road.

From past 1 month, they are repairing a water pipe right next to the dairy circle flyover, and with traffic diversion, its a nightmare to cross the junction.

This is not the case with just BG road, most other main roads are like this in Bangalore. This despite Bangalore having the highest road tax in the country.
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Old 6th February 2011, 04:56   #8
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

If what the study mentions becomes true, we are going to run out of infrastructure to support the huge number of vehicles. I see the infrastructure in the US struggling to keep up in most big cities, can't even think of Indian cities!
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Old 6th February 2011, 10:05   #9
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

And what about fuel.Will the current petrol and diesel reserves sustain till 2030?And more importantly will it be affordable?
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Old 6th February 2011, 22:47   #10
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

This report is based on rather simplistic assumptions as macro level, E.g.:

1. GPD will continue to grow at the current rates for Chine and India
2. Inflation would remain subdued
3. Yuan/$ prices would not change too drastically

E.g. to keep growing at current rates, India needs to keep generating jobs for population that is under 15 and would be joining workforce in next decade.
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Old 6th February 2011, 23:06   #11
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Thats just great All we need is more cars on our shitty roads!

I find it amusing how fuel prices are at all time highs and yet Indian's are just buying and buying. Elsewhere in the West, there have been drastic reductions in sales numbers every time fuel prices reach near all time highs.

I guess we're happy paying twice the price for half the car here in India
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Old 7th February 2011, 12:44   #12
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Another downside apart from the choking of streets, is that since the major customers from India and China (Asia in general) prefer comforts than anything else, we will be seeing less and less of driver oriented cars. So BMW may chose not to be the ultimate driving machine and so on.

Also the car designs may become more loud to cater to the Chinese and will have tonnes of chrome to cater to the Indians. Already the new Ford Fiesta is looking as if the designer had a pirated version of Chris Bangle's flame surfacing software!!

Maybe it is time for us to bid goodbye to the European understated looks and cars with good handling
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Old 7th February 2011, 13:37   #13
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

Given the pollution on the road and the safety aspect, a car is no longer a luxury for most but a necessity. Be it IT or whatever, there is a large no. of 1st-timers for whom a 2nd hand car is a better prospect than a 70k Pulsar.

Also, now each family has 1 vehicle for each family member.

Unfortunately though, the roads are not widened/maintained in accordance with the expansion of vehicles.

About price, I frankly feel it will deter only a handful from buying a car; people will find money for fuel from other necessities.

Another car on the lines of Nano and 2-wheelers might end up being a rare sight!
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Old 7th February 2011, 15:03   #14
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

There are a whole bunch of ways one can interpret this story:
1. Because of the sheer size of the market, more automakers would be after the same pie of the customer-base. This would mean more options and more competition. More options is not necessarily a good thing (Search for 'Barry Schwartz Paradox of choice' on TED-talks or you-tube). More options in entry and mid-level hatches is only going to create more confusion for the potential buyers. But in segments in which I have only ANHC and Vento as realistic options, but none tick all the checkboxes, more options can actually be a boon.

2. Indian infrastructure typically grows in the reactive mode. So with the indian auto market growing as per the predictions, the infrastructure would most likely lag behind adding to the woes of the automobile-users in India. The silver lining here could be, if the road-infrastructure actually crumbles under the additional weight, that might force the govt to step on the paddle (pun intended) for accelerated infrastructure improvement.

3. With growing customer-base, many more auto-makers might choose to set up their manufacturing shop over here. So the CBU route as well as the draconian import duty structure might become a thing of the past. That would again translate to more options for the common man.

4. With the environment concerns because of the automobile-population explosion, initiatives like BRTS and 'restricting entry of vehicles on the road based on reg. number on certain days of the week' might get implemented, which would again be good for the traffic situation. On the other hand, if the govt lacks the political willpower to get any major traffic transformation done, the traffic situation would only become more wild-wild-west (more cases of road-rage, scratched and dented cars etc)

Last edited by SDP : 7th February 2011 at 15:09.
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Old 7th February 2011, 15:44   #15
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Default Re: Indian Car Market to become Global No.4 by 2015. And No.3 by 2030

on a lighter note and completely OT -- isnt it likely that a certain "booz and co " would have been a bit tipsy and could have gone overboard with their estimates about the growth of the indian auto industry :-)
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