With the projections of car sales in India to double by the year 2010, carmakers in Europe are busy in building factories in the sub-continent, where margins are high and costs comparatively low.
Automotive market in India has emerged as the most rapidly growing car market in world. As cars sales in the country are likely to double by the year 2010, carmakers in Europe are busy in building factories in the sub-continent, where costs are comparatively low and margins high.
During the last five years (2000-05), passenger cars' production in India has increased by above 100%, and achieved the sales of 1.11 Million vehicles last year (2005). Analysts from across the globe agree that India is in the main league of the automotive markets in Asia. However until now, many carmakers preferred China to India as the ideal location for a production bridgehead.
Govt. policy on promoting India as a hub for automotive components and automobiles manufacturers slipped in to high gear, as a ten-year plan was unveiled recently. The goal of this plan is to transform the US$ 34 Billion automotive industry in India to a US$ 145 Billion business by the year 2016.
Already, global car companies have made huge investments in India, around US$ 3 Billion over the previous year (2005) alone. For instance, Daimler Chrysler is drawn in over 20 joint ventures with suppliers in India, whose products are put together into cars at its factory in Pune near Mumbai. Also, Fiat & Tata Motors Ltd. Of India recently signed a deal for a joint venture for making passenger vehicles, transmissions and engines for Indian as well as overseas markets.
As per RNCOS research analyst, Indian Automobile industry is high on the path toward growth. The industry is likely to touch a mark of 10 Million, with Commercial Vehicle Segment contributing the most.
According to industry experts Indian Automobile sales will grow at a CAGR of 9.5% to 13008 Million by the year 2010 from 8.45 Million units in FY05.
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