If there is one industry in India, that has a high potential for growth, it is the automobile industry here. The passenger vehicle industry in India is one of the fastest growing segments, registering a CAGR of 12.9% and above. It is all geared up to become the fourth largest industry in the world by the end of 2015 or early 2016. While the two-wheeler production is dominating the production volumes, accounting for almost 77% of the total production, the four-wheeler production is also slowly catching up.
The various reports coming from the industry is suggestive of this. The vehicle sales in the country have been buoyant for the past three consecutive months. Several agencies expect the automobile industry in India to register a growth figure of 11% to 13%.
Interestingly, it is predicted that the Indian luxury car market is set to grow at exponential rates in the days to come. The manufacturers of luxury cars in India have already seen a move in this direction, with the demand for their cars rising by the day. Rising income levels, an expanding middle class as well as young employees, large pool of skilled manpower, technological advancement and a conducive business environment are the reasons cited behind this growth.
Currently accounting for 22% of the country’s GDP, the automobile sector is a massive job creator. An estimate tells that for every job in the auto industry at least three to six ancillary jobs are being created. A report from Deloitte suggests that India will be the third largest automobile market by 2020. Currently at the seventh place, the country produces more than 7.5 million vehicles annually.
Of late, the Indian automobile industry has revived itself from the slump and has shown a growth of 10% annual rise in a month alone. The leading carmaker, Maruti has its sales increased by 17% in the same period.
Interestingly, it is not a phenomenon restricted to the passenger vehicle segment alone. The commercial vehicle segment also grew by an impressive 8.6% in the same period.
In anticipation of the good days to come, vehicle manufacturers are investing heavily in various infrastructural and other segments of the industry. It is said that companies are looking to pump in more than 3000 million dollars into the Indian automobile industry in the near future.
Different kinds of partnerships and business models are also being experimented. Online sales of cars, Joint Ventures, mergers and acquisitions, electrical cars, foreign brands and many other avenues are open before them.
All these, combined with the general well-being and better economic conditions of the country, will contribute to the growth of the sector in particular and country as a whole.