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India is now world's 4th largest automobile market, outpaces Germany with 9.5% growth in sales

India raced past Germany to take the 4th position with the latter selling 3.8 million units and growing by a modest 2.8 percent last year.

March 26, 2018 / 12:55 PM IST
Representative Image: General Motors Halol plant

Representative Image: General Motors Halol plant

India’s automobile sales, including passenger and commercial vehicles, grew 9.5 percent and more than 4 million units in 2017 were sold, making the country world’s fourth largest automobile market, reports Economic Times.

India raced past Germany to take the 4th position with the latter selling 3.8 million units and growing by a modest 2.8 percent last year.

What worked in favour of India?

In the automobile segment, India has been a star performer and has doubled its auto market in just a decade. According to IHS Markit, India is likely to continue to expand by nearly 10 percent a year and will overtake Japan by 2020 which stands at third-place as of now.

India’s ability to take the 4th rank in the world is die to the growing economy that has lifted consumer incomes. Gross domestic product per capita shot up about 70 percent between 2007 and 2016 to just over $1,700, World Bank data shows.

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Maruti Suzuki India, which make up 80 percent of the market, continues with its lead in passenger vehicles, . The Suzuki Motor subsidiary's passenger-vehicle sales jumped 15 percent to more than 1.6 million in 2017, boosting its market share by 2.6 percentage points to 49.6 percent.

Other brands like Hyundai, Tata, Renault, Honda and Ford have also been churning out new products consistently to keep buyers excited, thereby increasing sales of new cars.

Along with new car sales, the resale market is also growing fast. This is an indicator of improving lifestyles of people across the country over the past decade. The Government’s stress on improving road condition and also connecting cities and towns through highways has also played an important part in higher vehicle sales.

In what areas can India work to improve its position?

Construction of roads has not kept up with the surge in auto sales, leading to chronic gridlock in New Delhi and elsewhere. India will need to build up its infrastructure to support future growth.
Moneycontrol News
first published: Mar 26, 2018 12:55 pm
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