India to be a Five Million Car Market by 2020
Maruti Suzuki India Ltd, India’s largest car maker, said that the local car market will reach 5 million units in annual sales by 2020, making the country the fourth-largest market in the world.
Maruti’s forecast is in line with the central government’s Auto Mission Plan II that forecasts the passenger vehicle (PV) market to more than triple to 9.4 million units by 2026 from 2.8 million now if the economy grows at an average rate of 5.8% a year. If the economy grows at an average yearly pace of 7.5%, the size of the passenger vehicle market is forecast to rise to 13.4 million units, making it the world’s second largest after China. Mint reported this first on 2 September 2015
Recently, NGT (National Green Tribunal) order seeks to scrap diesel vehicles older than 10 years on Delhi roads.
The NGT order is also likely to propel growth in vehicle sales as it will create a replacement demand in the market. As of 2014, Delhi had 8.9 million registered passenger vehicles. Of these, there are around 220,000 diesel passenger vehicles and 170,000 commercial vehicles that are more than 10 years old, according to industry estimates.
The process of de-registration of diesel vehicles in the National Capital Region will start with the scrapping of 15-year-old diesel vehicles.
Sales have picked up largely because of a moderation in interest rates and lower fuel prices. Between July 2015 and June, car loan rates have come down by 65 basis points for public sector banks and 25 basis points for private banks.
Maruti Suzuki’s vehicle sales grew 11.5% to 1.3 million in 2015 -16, outpacing the Indian passenger vehicle industry’s aggregate 7.24% growth during the year. Including exports, Maruti sold a total of 1.42 million units.
For 2016-17, the car maker has forecast that sales will grow at lower double digits. Maruti’s car sales, including exports, grew just 2.1% to 348,443 units in the first three months of this fiscal because of a disruption in production.
Maruti will look to sell more than 1.5 million units in the current year. With new production capacity being added through its manufacturing agreement with its parent Suzuki Motor Corp. in Gujarat, the car maker will be able to sell 1.75 million units in 2017-18, said another top Maruti executive.