The amazing growth trend in car sales seen during the last two months of 2009 continued into the first day of the new decade. The New Year holds much promise for the automobile industry.

The spectacular spurt of sales in November and December, traditionally slow months for the automobile industry, was aided by the waning effect of recession and spike in new launches. The fact that the growth had been across the companies is reassuring.

While November saw the steepest growth in five years, December witnessed a slight drop. The market leaders Hyundai and Maruti Suzuki posted 43% and 36% growth in December.

However, market watchers had attributed the growth spurt to impending hike in automobile prices and stupendous discounts offered to lure customers.

After economic slowdown dampened sales in 2008, government stepped in with tax cuts and banks helped out with drop in loan rates to revive the industry during the initial months of 2009. This resulted in a steady rise in the growth rate for all companies throughout the year.

The overall positive trends in the Indian economy have helped the industry to a large extent. Salary hikes, stability in job scene and recovery of stock market have all contributed to the cause in a big way.

All segments of automobile industry have benefited from this – be it luxury cars, economy range or two-wheelers. With the economy expected to perform well in the current fiscal and continue its growth in the next, it can only get better and better.

Buoyant economy aided by healthy figures and good forecast is pushing stock market indices to heights unseen this year. Finance Minister Pranab Mukherjee’s announcement of maintaining fiscal stimulus until next Budget has benefited the cause no end.

The predictions are even more upbeat for the next fiscal year of 2010-11. The Planning Commission is hopeful of a better show than previous forecast – may be even getting back into the high-growth groove of the pre-recessive times.

It is indeed heartening to note that Indian economy is performing well beyond expectations, even with below-par monsoon and lower growth rates of economies in the western hemisphere, most importantly the US.

Despite these positive signs, the third quarter figures and the outcome of the Union Budget will play an important role in deciding the direction market takes next year. Plans are afoot to bring down the fiscal stimulus, introduced to overcome the effects of economic slowdown. The Reserve Bank of India is proposing steps to contain the high inflation rate, which is threatening to go out of control.

There are indications that the Union Budget, scheduled for presentation by February end, will be focusing on fiscal consolidation. Other measures are also on the cards to encourage investments in infrastructure, inclusive growth and reforms. The government is aiming for the elusive double-digit growth rate before the end of the present five-year plan.

On Christmas Eve, for the third straight day, the stock market rallied to a 19-month high, backed by strong liquidity and positive trends in economic and corporate growths. During 2009, both Sensex and Nifty posted amazing growth at 80% and 75% respectively.

The gross domestic product (GDP) value of India is displaying upward trend in recent times. This has prompted the Organization of Petroleum-Exporting Countries (OPEC) to observe that demand for oil may increase in the country during the next year.

The last two recessive years has shown no let down in the oil demand in the Indian market. OPEC has stated that oil consumption in India was not affected because of diverse factors such as stable GDP growth, automobile sales and reined in fuel prices.

With the economy posting better figures in the last quarter, expectations are high for next year. Along with the growth comes demand for more energy from various sectors. The resurgence of the automobile industry will also contribute substantially to the oil demand. OPEC is estimating an increase of almost 15% in oil demand, which will make it the product posting the fastest growth rate.

When other world economies were struggling under economic slowdown, Indian economy has posted 7.9% growth rate for the quarter ending September 2009. While industrial sector has posted a 9.1% growth, trade deficit has narrowed and rate of decline in export revenue is decelerating.

October, being the festive season, together with improved economy has pushed up oil demand by 19%. With recession loosening its clutches, new vehicle sales have also picked up around the festive month of October. Industries and agriculture have also contributed much to the increased diesel and other industrial fuel requirement.

OPEC is expecting a growth of 1.3% during the next year, most of it coming from non-OECD countries such as India and China.

The shift of power that everybody has been talking of in hushed tones for a long time, has finally started to show as economies of the world try to get back on their feet after the recent recession. However, when there is talk about China being the new economic superpower, leading the world out of its economic misery, many eyebrows are right fully raised.

India, the third largest economy of Asia, is modest in declaring its impact on the economy of the world. The fact that Indian economy has continued to grow, suffering only minor setbacks during the economic slowdown, is impressive by all standards.

While the double digit growth of China’s economy can be largely attributed to massive spending from the state, India has received only minor government funded relief packages. India’s rupee is appreciating while China is still not able to get over its obsession with accumulating foreign reserves.

The biggest advantage that India has over China is that India has a growing domestic demand which cushions it against any setbacks suffered in foreign trade, while China’s economy is largely depending on foreign trade.

In fact, it is estimated that India’s growth, owing to the well thought out economic policies and a growing service sector, will overtake China’s in the long run.