Growth Drivers

  • Passenger vehicles to increase at a CAGR of 18% during FY 2014-21
  • Two- and three-wheelers projected to expand at a CAGR of 8% during FY 2014-21
  • Commercial vehicles expected to register a CAGR of 19% during FY 2014-21
  • A growing working population and an expanding middle-class are expected to remain key demand drivers. GDP per capita has grown from USD 1,432.25 in 2010 to USD 1,500.76 in 2012, and is expected to reach USD 1,869.34 by 2018.
  • India has the world´s 12th largest number of high-net-worth individuals, with a growth of 20.8%, the highest among the top 12 countries.
  • Increasing disposable incomes in the rural agri-sector.
  • The presence of a large pool of skilled and semi-skilled workers and a strong educational system.
  • A large number of products are available to consumers across various segments. With the entry of a number of foreign players and reduced overall product lifecycle, quicker product launches have become the order of the day.
  • The availability of a variety of vehicle models meet diverse needs and preferences.
  • Favourable government policies like lower excise duties, automotive mission plans, the constitution of NATRiP, National Mission for Electric Mobility 2020, FAME - Faster Adaption and Manufacturing of Hybrid land Electric Vehicle etc.

Reasons to Invest

  • By 2016, India is expected to be the third largest automotive market by volume in the world.
  • Tractor sales in the country are expected to grow at CAGR of 8-9% in the next five years, upping India´s market potential for international brands. Two-wheeler production has grown from 8.5 Million units annually to 15.9 Million units in the last seven years. Significant opportunities exist in rural markets.
  • India´s car market has the potential to grow to six Million-plus units annually by 2020.
  • The emergence of large automotive clusters in the country: Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik-Aurangabad in the west, Chennai-Bengaluru-Hosur in the south and Jamshedpur-Kolkata in the east.
  • Global car majors have been ramping up investments in India to cater to growing domestic demand. These manufacturers plan to leverage India´s competitive advantage to set up export-oriented production hubs.
  • An R&D hub: strong support from the government in the setting up of NATRiP centres. Private players such as Hyundai, Suzuki, GM are keen to set up an R&D base in India.
  • Tata Nano is a sterling example of Indian frugal engineering and is being positioned as a mobiliser of the young generation.
  • Electric cars are likely to be a sizeable market segment in the coming decade.

Foreign investors