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Old 13th December 2018, 16:03   #1
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Default It's official: India has just 22 cars / 1000 citizens

According to the Niti Aayog, India has just 22 cars per 1,000 citizens. In comparison, in the US, 980 out of one thousand people own a car, while the UK has 850 cars per 1,000 individuals.

It's official: India has just 22 cars / 1000 citizens-traffic.jpg

An International Energy Agency (IEA) report suggests that passenger car ownership in India is expected to grow by 775% over the next two decades. This means, India will have 175 cars per 1,000 citizens by 2040.

While the passenger car market has shown strong growth in the past few years, India's car ownership index is still lagging behind countries like Canada, China, Australia, New Zealand and Japan. These countries have 662, 164, 740, 774 and 591 cars per thousand individuals respectively.

Source: Economic Times

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Old 13th December 2018, 16:19   #2
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Default Re: It's official: India has just 22 cars / 1000 citizens

I am sure we would get a surprising split if we take the metro cities vs rural / semi urban areas in picture.
What's the rate our infrastructure has to grow if we are to accommodate 175 cars / 1000 people? The metro cities are bursting at their seams accommodating the current volume of cars.
Only way to solve this problem is to encourage the development of satellite towns and de centralize distribution of resources.
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Old 13th December 2018, 16:32   #3
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Default Re: It's official: India has just 22 cars / 1000 citizens

Unfortunately the bad news is that India has a population of 1.225 billion which is approx 4 times the population of US 309.3 Million. (2017 figures)

Current population is estimated to be 1,360,655,990 !!
Current USA population is supposed to be 327,797,944.

Passenger car ownership growing to 175 per 1000 by 2040? No Sir, I dont ever see it happening. These are just some figures conjured up the PPT guys to sell something without knowing whats happening on the ground !
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Old 13th December 2018, 16:58   #4
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Default Re: It's official: India has just 22 cars / 1000 citizens

Strictly for those who love numbers:

Year 2018 India population = 134 crores
Year 2018 Number of cars per 1000 people = 22 (as per Niti Aayog)
Year 2018 Number of cars per person = (22 divided by 1000) = 0.022
Year 2018 Total number of cars on the road = (134 crores x 0.022) = 2.94 crores

Niti Aayog year 2040 estimate = 175 cars per 1000
Year 2040 number of cars per person = 175 divided by 1000 = 0.175
Year 2040 India population estimate = 163 crores (source: some website I looked up)
Year 2040 total number of cars on the road = (0.175 x 163 crores) = 28.52 crores

That's approximately 10.8% per year growth in number of cars on the road from 2018 to 2040

Going by monthly sales data thread, around 35 to 40 Lakhs new cars are being added to the existing lot -> meaning number of cars on the road are going up by 12 to 14% per year. Because the base goes up every year, growth in number of cars on the road per year is likely to shrink from 2018 to 2040.

In 22 years, there needs to be sales of (28.52 - 2.94) = 25.58 crores new cars. That's an average of 1.16 crores per year car sales over the next 22 years. Actual sales needs to be higher because lots of cars will be scrapped because of old age or accidents.

China has been clocking 2 to 2.4 crores new car sales per year in the past 10 years.

Last edited by SmartCat : 13th December 2018 at 17:18.
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Old 13th December 2018, 17:07   #5
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Default Re: It's official: India has just 22 cars / 1000 citizens

Statistics out of context can be misleading. India is a sea of poverty with islands of prosperity. These islands have much more cars per citizens. e.g. Chandigarh has almost as many vehicles as people.
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Old 13th December 2018, 17:25   #6
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Default Re: It's official: India has just 22 cars / 1000 citizens

These stats are not really out of context. Very much close to reality! Thinking of examples, within my own formal education life, two things have become common-place : laptops and two-wheelers. How long before cars come within touching distance to a fairly well paid masters student?

Another anecdotal evidence - I understand the anecdotal vs statistical debate; but it's many anecdotes that end up making meaningful stats anyway - Haven't been to my village hometown in a while now, but when I speak to them I'm told two-wheelers have taken over the village roads! No one prefers to walk anymore. These are not mega-rich farmlands we are talking, just the regular run-of-mill kinds.

How long before they graduate to cars? 5-10 years at most.
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Old 13th December 2018, 17:41   #7
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Default Re: It's official: India has just 22 cars / 1000 citizens

I used number of cars on road and population of US and it comes to 840 or so cars per thousand. Hope Niti Ayog knows India well.
You also need to look at average age of cars which I am sure will be more in India and that might have some impact on new car sales.
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Old 13th December 2018, 17:41   #8
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Default Re: It's official: India has just 22 cars / 1000 citizens

I find it quite believable. In 20 years time we may even exceed 175 cars per 1000 individuals. What worries me is how is the infrastructure going to keep pace with this kind of growth? With 10 times more vehicles on the road, with the kind of road manners and driving culture that we have, GOD SAVE US!
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Old 13th December 2018, 18:00   #9
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Default Re: It's official: India has just 22 cars / 1000 citizens

The thing with market sizing in the Indian context is that you divide any consumption figure by population and the result is an abysmally low number by developed world standards. There will always be consultants throwing these statistics at their clients, it is up to them what to make of it.

I am sure in the 1990s someone would have given a pager company or a dial up internet services provider in India similar statistics. Now I know cars are not going to go extinct but what I have seen is that we never catch up with developed world standards. Some disruption will happen and we will go along with that - much improved public transportation (hopefully), flying cars, e-bikes with their dedicated lanes etc. Wishful thinking, but 2040 is too far away. We just can't predict what will happen, given that technological advancement is never linear but exponential. Maybe there will be successive and debilitating climate change catastrophes that force us to fundamentally change how we live.

Imagine if in the 1800s someone had come up with figures of per capita horse carriage ownership and let's say India was a laggard there too.
There is no doubt that this figure of 22 will increase for the foreseeable future but we need not worry about reaching abnormal numbers which will cause our infrastructure to implode. Because it has already imploded and what we experience every day is the aftermath of that implosion. It is not a distinct event that is going to happen in the future that we will sit and gape at.

I believe the situation will start to auto correct gradually and we will achieve some semblance of order.

Last edited by Malyaj : 13th December 2018 at 18:26.
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Old 13th December 2018, 18:16   #10
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Default Re: It's official: India has just 22 cars / 1000 citizens

Is this a case of we have less cars in India or our population numbers are way too high... Our cities are chocked Bangalore, Gurgaon, Mumbai and the list continues. What we need is not more cars but better public transportation to manage such a large population.
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Old 13th December 2018, 18:49   #11
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Default Re: It's official: India has just 22 cars / 1000 citizens

The IEA is smoking dope. Passenger vehicle sales were 3.28 mm units in FY18. Let’s assume uniform 1% per annum vehicle scrappage. This is a low estimate given policies that vehicles above 15 or 20 years must be scrapped. For the Car Ownership rate to reach 175 per 1000, annual car sales would need to grow at a CAGR of 11.3% between now and 2040, with annual sales in India rising to 39 mm units per annum - roughly 50% above current sales in China. Don’t see any scope of that happening. With a more reasonable 7% CAGR in car sales, we would get to sales of about 14.5 mm units per year by then, and a car ownership ratio of about 100 per 1000. That’s a far more reasonable estimate in my view, assuming there is no wholesale replacement of personal cars by self driving taxis. The issue with where these cars will run is a different issue.

Edit: thought the estimate was from Niti Aayog, but realised its from the IEA. The IEA has been grossly wrong in its estimates for fuel demand growth - so suspect their estimates may be deliberately biased.

Last edited by Hayek : 13th December 2018 at 18:52.
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Old 13th December 2018, 18:54   #12
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Default Re: It's official: India has just 22 cars / 1000 citizens

Quote:
Originally Posted by Santoshbhat View Post
I find it quite believable.
Yeah, its just a bureaucratic way of saying:

Car sales will go up 12% per year over the next 22 years (till 2040)

OR

Number of cars on the road will go up 10 times by 2040.

Number of cars per 1000 people metric is used to impress foreign investors about Indian car industry's future potential. By comparing it with China and other developed countries. Other examples these financial babus use: steel/cement consumption per capita or number of ACs/washing machine per 1000 people.

Quote:
Originally Posted by Malyaj View Post
I am sure in the 1990s someone would have given a pager company or a dial up internet services provider in India similar statistics. much improved public transportation (hopefully), flying cars, e-bikes with their dedicated lanes etc. Imagine if in the 1800s someone had come up with figures of per capita horse carriage ownership and let's say India was a laggard there too.
Horse-drawn carriages example is used quite often to explain how car industry is fragile and subject to rapid changes. Such an argument is not valid because cars offer huge advantages over horse-drawn carriages -

- Cars are faster
- Cars can travel much farther without taking a break
- Cars don't poop (except old Ambassador cars)
- Cars don't need to eat 2 or 3 times a day
- Cars don't need a caretaker.

and so on.

But look at the current replacement options for cars -

- Public transport (poor reach, crowded etc)
- Ola/Uber as replacement for car ownership (you need an Excel sheet to calculate the cost advantages)
- e-bikes with dedicated lanes (no space in India)

You don't need an Excel sheet or calculator to figure out the advantages of Smartphones over Pager or high speed internet over dial-up. That's why customer preferences changed quickly. With cars, its a different story altogether. Alternatives have more disadvantages than advantages.

Last edited by SmartCat : 13th December 2018 at 19:12.
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Old 13th December 2018, 18:56   #13
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Default Re: It's official: India has just 22 cars / 1000 citizens

Quote:
Originally Posted by Knowall View Post
Is this a case of we have less cars in India or our population numbers are way too high... Our cities are chocked Bangalore, Gurgaon, Mumbai and the list continues. What we need is not more cars but better public transportation to manage such a large population.
Why is it that in each states only one or two cities seem to be experiencing growth and development ? Karnataka is a huge state with lots of land area. Why can’t there be a couple of more Bangalores in Karnataka? Maybe increasing the development across the entire states would mean less traffic and chokehold on each individual Metropolitian cities.
P.s I am not an expert on these things maybe I’m blowing hot air here
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Old 13th December 2018, 19:15   #14
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Default Re: It's official: India has just 22 cars / 1000 citizens

Quote:
Originally Posted by smartcat View Post
Horse-drawn carriages example is used quite often to explain how car industry is fragile and subject to rapid changes. Such an argument is not valid because cars offer huge advantages over horse-drawn carriages

You don't need an Excel sheet or calculator to figure out the advantages of smartphones over pager or high speed internet vs dial-up. That's why customer preferences changed quickly.
I still look at this differently. You are talking about a scenario where both old and new have co-existed for some time and the new is clearly superior. But the old in isolation and without the benefit of hindsight wasn't necessarily bad.

Before Uber and Ola, radio taxi services such as Meru and EasyCabs seemed to be a great leap forward. Now that model has vanished. The point I am trying to make is that we can't predict too much into the future about disruption.

I would agree with you in that cars are different. Products become redundant slower than business models

Last edited by Malyaj : 13th December 2018 at 19:37.
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Old 13th December 2018, 19:34   #15
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Quote:
Originally Posted by nakul0888 View Post
Why is it that in each states only one or two cities seem to be experiencing growth and development ? Karnataka is a huge state with lots of land area. Why can't there be a couple of more Bangalores in Karnataka? Maybe increasing the development across the entire states would mean less traffic and chokehold on each individual Metropolitian cities.
P.s I am not an expert on these things maybe I'm blowing hot air here

Development in confined zone benefits only the big businesses and politicians. The land price escalates if many people stay in a smaller area. Corporates find a huge talent pool and get talent at lower cost. Advantage for us is huge job potential.

Politicians enjoy owing to land rates, more migrant population who don't vote and illegitimate businesses like tanker or sub standard material supply etc is easier to manage.

Actually of all states, Gujarat has the development spread more evenly, Ahmedabad, Baroda Surat etc

Last edited by GTO : 14th December 2018 at 09:33. Reason: Poor language & grammar. Please type your posts correctly
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