Indian auto industry to be 3rd largest by 2012

It is well known that the Indian automobile industry is on a boom as of now. More and more of the cars are getting launched day by day whereas there are potentially about a 1000 motorbikes sold per day. All these combined to the arrival of new car and bike manufactures to India makes the proposition all the more alluring. It is estimated that by the end of 2012, India would be the world’s third largest automobile market  and would only be preceded by US and China. Japan is also vying for the slot of third largest market however at the current rate, India would definitely overtake it sooner or later.

Global consultants Booz and Co, in a report, have mentioned that the Indian passenger vehicle scene would be crowded with sales of about 3.5 million units in a few years. The market is slated to grow at a rate of 15-20% within the next few years. Last year, the market was pegged at 2.2 million units whereas it is predicted that it would touch the 2.8 million mark by the end of this year. For accommodating all these customers, the automobile companies would have to ramp up their production techniques, recruit more people and also provide efficient after sales service. It is estimated that about 8-12 new auto plants would be coming up in 2011 in India and this could also boost the volumes part.

Indian automobile industry has also recently started to cater to the export market. The export market is currently in the miniscule stages and is expected to grow at a rate of 8% per year. There would also be investments in the Indian automobile sector to the tune of 40 billion by the various automobile companies. All this moolah would be spent in setting up new plants, enhance R&D capabilities, expand distribution network and strengthen component sourcing chain. Because of the huge capacity addition and inflationary pressure, companies are likely to make only medium profits. Currently a few of the cars and bikes command a waiting period of 3 months whereas some even have a 8 months long waiting period. During these times, new vehicles get launched and the customers lose interest in the earlier bookings. This should be also curbed at all costs.

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