The Indian auto market has been experiencing a lot of growth in the recent years. According to future projections, this growth will continue, with India being pegged as the third largest auto market in the world. According to JD Power Asia Pacific, a market research company, India is to follow China and US, becoming the third biggest market for light autos, including LCVs and passenger cars by 2020.
India, will, however need to improve infrastructure and resolve issues of component chain supply for realizing their huge potential. The executive director of the market research company, Mohit Arora, said that they forecast that by the year 2020, India will be the third largest light vehicles market, with total 12mn unit sales.
The company mentioned in the India Auto 2020 report that, India would rise from its current sixth place to third, after China and America, with total 11.9mn sales of light vehicles. Last year, India saw the sales of around 2.7mn light vehicles, an increase from 2000s 700,000 light autos sold. The market of light vehicles in China is expected to touch 35mn units, with US rising to 17.4mn units.
Arora said that the Indian auto market has huge potential; however its key challenges include growth of infrastructure for supporting the auto industry in India.
The reports stated that the supply chain of auto parts in India also need scaling up, in terms of volume as well as quality for matching international standards, as well as be integrated with OEMs. The report stated that the Indian citizen’s average income is projected to be in moderation in 2020 as well, with vehicle demand still being focused on passenger vehicles in the lower segment and in the MPV and SUV segments.
Because of India’s vehicle costs ceiling, limited infrastructure of roads, and fuel consumption concerns, it is not unexpected that mini truck and micro van models in LCV segments will be more popular. According to the report, from the 11.9mn projected sales of light vehicles by 2020 in India, 9.28mn will be passenger cars and 2.69mn will be light trucks.