India to become the third largest automobile market in the world by 2015

Thursday 15 December 2011, 12:52 PM by

According to Vikas Seghal, Global Head of Automotive industry at Rothschild, a financial advisory group, India is all set to gain the number three position in the automobile market by 2015. The first and second positions will be occupied by China and United States, respectively. At the moment India is the sixth largest automobile market, after China. India’s automobile market comprises trucks, auto parts and cars. The market is assumed to increase its production capacity to 3.5 million units by 2011-12. In order to become one of the top three automobile markets, manufacturers will be investing thrice the amount in the coming decade.

The car production capacity of the country is most likely to reach 12 million in 2018, from 4.8 million in 2010. Around 30 new factories are expected to come up in the country. Firms will be investing somewhere around $30 billion to $40 billion which would give rise to around 500,000 new jobs.

India is quite a difficult market and at the rate at which it is expanding, it is bound to bring a few obstacles. Seghal says Maruti Suzuki India Ltd., one of the top manufacturers in India, will lose profits and market share because of the increase in competition. In 2011 Maruti Suzuki’s market share became 39.5% in the first half, from the 82% in 1997.

The Chinese automobile market has already been tapped by big names like General Motors, Toyota Motor Corp. and Volkswagen AG and these makers are now focusing to gain in the growing Indian market. Experts feel that the Indian automobile market has a positive future and more mergers and acquisition are going to take place in the coming years.