India car market seen poised to top US in 25 yrs
The auto market in India is on the brink of the explosive growth that characterized the Chinese auto market in recent years and will outstrip the United States by size over the next 25 years, according to a forecast by consulting firm Booz & Co.
February 17, 2011 / 12:15 IST
The auto market in India is on the brink of the explosive growth that characterized the Chinese auto market in recent years and will outstrip the United States by size over the next 25 years, according to a forecast by consulting firm Booz & Co.
Auto sales in India are on track to at least double in size by 2020 to 5 million vehicles sold per year and could rise to as much as 6 million, the study said.At that size, the Indian auto market would be twice as large as auto sales in Germany -- Europe's largest single market -- in 2010.By the middle of the 2020s, India will have topped the United States as a hub for auto production and a decade later it will have surpassed the US market by sales with industry-wide revenue of up to USD 200 billion, the study said."It's not that far off," said Booz partner Vikas Sehgal, who led the study. "This is part of the single largest shift in prosperity ever."Sehgal said India could attract up to USD 35 billion in new investment from automakers and suppliers who would produce cars both for a booming domestic market and for export to markets in South America, the Middle East and Africa."There's no reason to make cars for those markets in Korea or Japan," he said.By 2020, the Booz study forecasts that the global auto market would grow to about 205 million vehicles in annual sales with 65% of that total from Asia.By contrast, in 1980, Asia including Japan had accounted for just 7% of global auto sales."There's no question that the center of gravity in the auto world is shifting," Sehgal said.Sehgal said that as average Indian household income approaches USD 10,000, more consumers would want to own and drive cars, just as they have in China."As incomes reach that level, predictably consumers want to spend on housing and then on cars," he said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
