JD Power, the renowned global marketing information services firm, has estimated that the Indian auto market will grow three folds to 9.3 million by the end of 2020. The company believes that the domestic passenger car industry could rise from prevalent slowdown and set new highs in the near future. As per the market research company, the auto sector is projected to grow at 16 per cent annually, since the number of consumers with demand and disposable income is increasing at the moment.
Expressing his opinion regarding the future of Indian auto industry, Geoff Broderick, Vice President (VP) and General Manager (GM), JD Power Asia Pacific, has been quoted as saying, “We may not see the spurt that we saw in China. India will have a consistent and gradual growth and our estimation is that by 2020 the automobile market in India will triple from the present size to about 9.3 million units.” Informing about the key areas that will fuel the growth, Broderick added, “As India's economy grows, the number of people with more disposable income is bound to increase. Moreover, there will be a sizeable amount of young population, who are going to be potential customers for cars.”
Top industry experts believe that the domestic auto sector could reach new levels of growth with a comprehensive infrastructure improvement and remodelling in the country. Apart from a well designed infrastructure, the auto market needs consistent and growth oriented policies, especially in case of major issues like petrol and diesel pricing, vehicle finance rates, along with the excise duty slab. Speaking on the same, Broderick added, “Yes, there are short term challenges in India like the high interest rates, inflationary pressures but in the long term it has the advantages of having stable government and legal systems.” He further said, “Since the 2008-09 downturn, there has been a shift globally and also in India as they have learnt their lessons. Companies will no longer be going only after market share, the priority will be sustainable profitable growth.”
JD Power believes that Indian auto makers have to devise new strategies so as to sustain positive growth rather than chasing market share. In order to ensure profitable growth, the companies will have to focus their energies towards winning the audience first and then the sales figures. Commenting on the required policies for sustaining growth in the Indian auto market, Mohit Arora, Executive Director, JD Power Asia Pacific, said, “The policies need to be consistent and there should not be any turbulence. For instance, due to ambiguity of diesel pricing many OEMs (Original Equipment Manufacturers) are unable to fix their plans. Some of them have even decided not to take a decision.”