India: The World's Second-Fastest Growing Light Vehicle Market

India's auto industry is witnessing an unprecedented boom. At a time when the global auto market went into a self-withdrawal mode affected by the fuel price hikes and the sluggishly receding economic downturn, Indian car market showed its grit and managed to stand out. Zooming much ahead of the erstwhile matured car markets of Germany, France, Japan and the US, it went on to emerge as the world’s second-fastest growing light vehicle market, second only to China.

What do you think have played functional in this phenomenal growth performance? --- A perfect gelling of the government’s economic revival package with the country's low car penetration, new model launches, lower interest rates, and a stable economic growth have all combined to keep the demand for cars ticking.

According to a recent data released by the industry body Society of Indian Automobile Manufacturers (SIAM), the light vehicle market in India grew 27.5% in 2009-10, while the world light vehicle market contracted by a significant 14% (the worst in the last eight years!). The auto market growth in Germany, France, Russia, Japan, UK, and US, however, has been just around 23%, 11%, -50%, -9%, -6% and -21% respectively. China was the only market where the light vehicle sales grew 42%.

In India, sales of light vehicles, including passenger cars, multi-purpose vehicles, light commercial vehicles, and utility vehicles, were primarily driven by a rapid growth in the demand of passenger cars by 25%.