Recent Developments and Future Prospects in the Indian Automotive Industry

The automobile market is growing at about 25% for the last three years. The number of persons per car is 200, which is very large compared to other emerging markets like Korea and Brazil which have about 12 persons per car. There is therefore a very huge untapped market. Uncertainty exists about the extent of growth, but a minimum growth rate of 20% is expected until the year 2000. Sales are expected to rise to anywhere between 850,000 to 1.5 million vehicles by the year 2000. Markets are highly price sensitive since a car is about 18 to 24 months salary for the average middle class buyer. However, incomes are rising and the economy has been growing steadily at nearly 6%.