Indian auto market closed with financial year 2009-10 on a healthy note across segments in both domestic as well as export markets. According the industry body SIAM, a healthy 20% growth was seen YoY basis.
The global auto market has seen the worst during the last 2 years with almost flat or negative growth. Indian market was no exception in 2008-09, however the growth started showing by Jan-2010. The CV segment was the worst hit as anticipated and the two wheeler segment did not have much of an impact.
The growth could be attributed to stimulus by Government with significant rebates, attractive interest rates. Also other factor is the introduction of an array of new models on Indian roads that kept the potential new buyers to still go with their buying plans coupled with significant dealer offers, lower interest rates. The bargains were hard to let go.
The two wheeler segment that controls the 76% of the market never saw an impact which indicates the confidence by the global car makers on Indian consumer market that is fairly young as majority of the two wheeler buyers are the youth.
It is interesting to observer the huge difference in the Passenger vehicle market that has about 15.86% to the two wheeler market which is a potential market to upgrade to the smaller car. This indicates the huge potential for the PV market to grow and no wonder India is now housing over 16 passenger vehicle OEMs.
Another interesting fact is that, in PV segment Maruti Suzuki controls over 67% with over 100,000 cars sold every month, of this 80% of the cars are its Estilo brand priced around Rs2,60,000. This endorses the fact why there are about 10 new small cars being waiting to enter Indian market by 2011. Even the premium car markets like Honda, Toyota could not resists the market potential.
Domestic Auto
Market share by Segments for 2009-10 |
Segment |
% share |
Passenger vehicles |
15.86 |
CV |
4.32 |
Three Wheelers |
3.58 |
Two wheelers |
76.23 |
Domestic
Auto Market share by Segments for 2009-10 | <><>
Segment | <><>
2008-09 | <><>
2009-10 | <><>
Passenger vehicles | <><>
1,552,703 | <><>
1,949,776 | <><>
CV | <><>
384,194 | <><>
531,395 | <><>
Three Wheelers | <><>
349,727 | <><>
440,368 | <><>
Two wheelers | <><>
7,437,619 | <><>
9,371,231 | <><>
Total | <><>
9,724,243 | <><>
12,292,770 | <><>
Domestic Auto
Market share by Segments for 2009-10 |
Segment |
2008-09 |
2009-10 |
Passenger vehicles |
335,729 |
446,146 |
CV |
42,625 |
45,007 |
Three Wheelers |
148,066 |
173,282 |
Two wheelers |
1,004,174 |
1,140,184 |
Total |
1,530,594 |
1,804,619 |
Courtesy – SIAM
The 2010 AutoExpo at Delhi saw an over whelming response from global OEMs with their plans for Indian market with over 20 new models already on the roads.
Nano, dubbed as the cheapest car ever made from Indian CV leader TATA was launched this year with lots of expectations. However it hit speed breaker even before it started the booking; land row forcing the delay in launches and commencement of production, production issues causing delayed deliveries and poor response in booking. The recent fire incidents are adding to the list of the issues. The input costs have shot up over 4-8% and there is big possibility that the sub $2000 or Rs100,000 that was attached to Nano may not be a reality.
The year saw a lot of significant achievements for Indian OEMs. Maruti Suzuki rolled its millionth car that takes it to the global elite. Maruti Suzuki also overtook Suzuki Motors in terms of sales. The production most popular car on Indian market, Maruti 800 is stopped. Tata Motors became a great acquisition story with many strategic buyouts and alliances, TATA’s Land rover/Jaguar acquisition being the major one. TATA Nano is expected find place US and UK in electric versions by 2011 and The TATA Indica Electric version would be launched in UK and Scandinavia this year. Mahindra the utility vehicle leader will have its flagship Scorpio to be launched in USA as a pickup version.
However growth seen in 2009-10 was against a dull 2008-09 and 2010-11 might not see the same momentum. There is a significant increase in the raw material costs, the interest rates have increased due to the inflation, the union budget took out the excise holiday and EuroIV norm was introduced in 13 cities causing the increase in cost of technology. These costs are already transferred to the customers by increasing the costs of the vehicles. However even a double digit or close to double digit growth also is significant for the global majors that are struggling in western markets.
