The booming Indian economy and the buoyant employment scene are prompting many global carmakers to venture into the Indian automobile market. This is also triggered by the slump in car sales in the Western markets.
India offers a huge market for small, compact cars that don’t drain the pockets. Auto giants like General Motors, Toyota and Honda are lining up new models for the Indian consumers this year. All of these are in the price range of Rs. 4-5 lakhs. The pricing is aimed at middle-class Indians, who are suddenly finding themselves with disposable income.
Indian cars sales, though a decent 1.5 million last year, is nowhere near China’s. However, the changing economic and social norms are elevating more and more people into the middle-class category. India’s car ownership rate is at an abysmal 12 cars per 1000 people. The huge middle-class market with its unbridled desire to better their lifestyle is proving a blessing to the global automakers.
Though India has a market for luxury cars, it is not growing as much as the small car segment. The car sales figures say it all. Out of the five cars sold in India, four are small cars. This is prompting more global players to test the waters here.
Another factor contributing to this trend is the slump in car sales in the West due to the slow waning of global economic slowdown and connected dismal employment scene. To tide over this difficult phase, many are turning to India.
However, survival in the Indian market is no cakewalk. Here they will face stiff competition from local manufacturers who build cars for the Indian roads at very competitive prices. The best example is the Nano from Tata Motors.
Though Indian consumer is the ultimate winner, this trend is worsening the already grim scene of congested roads and environment pollution.
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