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An Overview of Indian Automobile Sector (Passenger Vehicles)
An Overview of Indian Automobile Sector (Passenger Vehicles)
Vehicles)
0.4
0.78
0.65
0.1
CAGR30.95%
10
2.4
18.8
Passenger Vehicles
Commercial Vehicles
Passenger Vehicles
Commercial Vehicles
Two Wheelers
Three Wheelers
Two Wheelers
Three Wheelers
3.2
3.4
FY15
FY16
FY20(Expected)
year 2026 propelled by the rise in the income and middle income class group with GDP per
capita set to increase to $2128 by 2018 and easier access of credit. The car finance industry is
expected to grow at a pace of 12% from $17bn(2015) to $30bn(2020). More entry level cars
coming up to cater to the interest of young population.
Policy support: The government object is to transform India into a auto-manufacturing hub.
The excise duty has been cut to promote more production. Tax sops will also be provided.
Cost Advantage: The relative cost of producing a car in India is less as compared to producing
cars elsewhere. Auto firms save around 10-15% in operations compared to Europe and Latin
America. India also provide a cheap labour force. Global Car manufacturers are looking to
increase their investments in India and increase their production capacity and dealership
network.
Increasing technological capabilities: The major focus in the industry is increasing the fuel
efficiency and looking for fuel alternative. The demand for electric cars, hybrid cars and CNG
driven cars to go up as a result of environmental concerns.
Affordability: While quite a few new vehicles launched in the Indian market have been
developed locally, vehicle affordability remains a significant concern . Although the price of an
average motorcycle in India (about USD 900) is comparable to the average per capita income,
the prices of passenger cars have a long way to go.
Fuel Economy: The volume leaders across two-wheelers and four-wheelers in India are
companies which have been able to offer products with the globally acknowledged best-in-class
fuel economy rates, as well as affordable total cost of ownership.
Alternative Fuels: Many electrical offerings are now present in the market. Example : Reva,
BMW i8.