Global carmakers forecast scorching growth in India's auto market
Global carmakers forecast scorching growth in India's auto market
Jay Shankar, Bangalor, India
Global carmakers have stepped on the gas in India, forecasting
fast-paced growth in a market they say is wide open.
Toyota Kirloskar Motor, a joint venture with Japan's Toyota,
said over the weekend it was bullish about the Indian automobile
market and forecast revenues to surge 58 percent to US$217
million.
The firm, which plans to launch a new model this year, said
growth would be driven mainly by an eight percent cut in excise
duties announced during the February federal budget, as well as a
rise in disposable incomes.
"The market will grow and grow as (Indian) customers get
accustomed to global trends," said Atsushi Toyoshima, managing
director of the Indian venture.
During the three months to May, the Indian automobile industry
had grown between 36 percent and 40 percent, he noted.
"India has a population of one billion and the total cars sold
last year were only 700,000 -- which constitutes about 0.7
percent of the people. In the future very dramatic changes will
occur the same way as China," said Toyoshima.
"Maybe one can see a growth of 40 percent or 100 percent. But
no one can say when."
Late last year, India's crowded passenger auto market sought
to woo customers with big discounts, soft loans and freebies but
now the market is revving up after duty cuts, analysts said.
Small cars enjoy a 60-percent overall market share and Suzuki
Motor Corp.'s joint venture, Maruti Udyog Limited, has doled out
most of the keys despite the recent entry of several global auto
giants such as Hyundai, Ford, Daewoo, Fiat and General Motors.
Still, Maruti enjoys nowhere near the success it did in the
early 1990s, when it controlled more than 90 percent of the
newly-opened, free market Indian auto sector, which had been
dominated by antiquated versions of British car models and
Italy's Fiat.
Stock brokers say the success of the Maruti share issue, the
eighth largest in India, could lift the capital market sentiment
for public share offers, enabling industries to tap into a huge
pool of money.
The Society of Indian Automobile Manufacturers (SIAM) has also
projected the sector to grow around eight percent for the current
fiscal year ending March 2004.
He said "brisk infrastructural activities" and softening
interest rates had also created a favorable environment for
growth.
"SIAM believes that the outlook for the (car) segment is quite
encouraging and it has the potential to grow at double digit rate
if no abrupt changes are made in the policies that influence
trade," SIAM chief R. Seshasayee said.
The Indian subsidiary of U.S. auto giant Ford has projected
growth of 20 percent in the current financial year and has
announced plans to launch a new model.
"The Indian (automobile) industry is expected to grow 10
percent during the current year due to a cut in excise duties and
introduction of new models," said David Friedman, managing
director of Ford India Ltd.
SIAM said the sale of cars in India jumped 41 percent in May
to 55,166 units from 39,150 units logged in the same month last
year.