Development in the GDP (Gross Domestic Product), FDI (Foreign Direct Investment), service sector, construction and agriculture activities determine the PV (Passenger Vehicle) sales within near future.
- Development in the GDP (Gross Domestic Product), FDI (Foreign Direct Investment), service sector, construction and agriculture activities determine the PV (Passenger Vehicle) sales within near future.
- Domestic PV sales in India have reduced to 2,431,250 units during the financial year 2014 from 2,686,768 units during the financial year 2013, 9.5 % decline because of increase in the lending rate, fuel cost, and existing economic conditions.
- The PV market in India was ruled by Maruti Suzuki India Limited (41.4% share) and Hyundai Motor India Limited (15.7 % share), in the FY 2014. Other domestic OEMs (Original Equipment Manufacturers) like Mahindra & Mahindra Ltd. (9.1 %) and Tata Motors (7.9 %) jointly accounted market share of 17.0%.
- With narrowing the price differences between diesel and gasoline variant vehicles as well as newer technologies getting introduced in the gasoline engines, sharing of the diesel vehicles can be turned down in the coming future.
- Exports reported for the 19.6% of overall production during the year 2014. They have developed at 17.3 % AAGR in past seven years. However it is expected to decline within near future because of non-tariff impediments and superior duty agreements in Europe with some Latin American and African countries
- Indian OEMs— Mahindra and Tata Motors are anticipated to raise their market sharing in UV segment in the coming years.
- Further, contributors like Ford, Hyundai, Nissan, and Maruti Suzuki are expected to add the volumes into compact UV section with the newer launches.
- The car-per-thousand proportion of India is 13 per 1,000, which is very low and because of that international OEMs are concentrating on Indian PV marketplace and are introducing models according to particular demands in the Indian market.
- Launches of entry-level SUVs and entry-level sedans by major international OEMs like Ford, Renault, and Honda has made that more suitable for the buyers to choose most superior vehicles at smaller costs, thus, increasing the business margins.
- With the raise in number of players in Indian PV marketplace, competition of achieving considerable market share to have sustainable manufacturing has strengthen, because of which the OEMs are introducing newer models at extremely aggressive prices.
- Because of the economic slowdown, the investors hold up investments in diverse sectors like services, construction, and agriculture that is sequentially leading to the decline in PV sales, however the economy is expected to understand after elections of near future as well as drive the development of PV market in India.
- Development of rural, tier II, and tier III cities in India is expected to raise the demands for PV with long term, because this will enhance the living standard of people having increase in the non-refundable income.
- Continuous hike in the fuel price is a key threat to PV market in Indian, because it is highly fuel pricing sensitive market. Deregulation of the gasoline pricing after 25th June, 2013 has result into decline of the PV sales in India.
- Higher interest rate on the traveller vehicles loans has risen the costing of vehicle ownership, therefore, leading to sales decline.
- To save time and avoid traffic problems in larger cities and metros, people prefer more to travel through public transport than their personal vehicles. It is expected to negatively influence the PV sales in future.
- In the latest trends, the production and raw material prices of the key components like metals have increased significantly. The market contributors are battling the increasing raw material pricing by optimizing the manufacturing procedure, budgeting their marketing and advertising costs, as well as pass it to the consumers through pricing hikes.
- The psyche of the Indian customers is using PVs for extended duration compared to the maximum usage restricted to duration of 5 years with developed markets like the United Arab Emirates and Europe.
Market Size and Forecast
PV Market in India
- Over 81 % of vehicles made within India are advertised in the local market, as well as about 19 % of vehicles are sold overseas to markets in the Africa, Europe, as well as Asian countries.
- The PV production in India has witnessed 7.4 % decline whereas the sales has witnessed 9.5 % decline during the FY 2014, related to last financial year. Nevertheless, exports have registered 8.9% growth in the FY 2014 related to last year.
- Compact SUVs as well as super compact sectors will assist the market in growing smaller to mid-term.
- Exports are expected to grow, however, they are expected to decrease in the FY 2015 mainly because of enormous duty hikes with Sri Lankan government in previous year, as well as also because of non-tariff barriers as well as special duty agreements in Europe with some Latin American and African countries.
- Vehicle manufacturers offering substitute fuel options (LPG/CNG) that are well-matched with the gasoline engines can increase the requirement of dual-fuel traveller vehicles.
- Sales of compact segment is expected to drive growth of PV market in India.
PC (Passenger Car) Segment
- Local sales of PC segment have reduced to the 1,763,225 units during the FY 2014 from the 1,896,214 units during the FY 2013, with 7.0 % decline.
- This luxury and super compact segment have observed growth, while other segments have registered decline during the FY 2014 in excess of FY 2013.
- The government policies regarding interest rates and fuel prices on the vehicle loans include key factors accountable for decreasing PC segment.
UV (Utility Vehicles), SUV (Sports Utility Vehicle), and MPV (Multi Purpose Vehicle)
- Local sales of Indian UV segment is decreased by 484,239 units during the FY 2014, from 553,256 units during the FY 2013, registering 12.5% decline.
- Launching of SUVs like Ford EcoSport and Renault Duster at assertive prices, helped SUV sector with increase of 17.9% during the FY 2014 more than FY 2013, whereas sales of MPV segment has reduced by 27.1% during the FY 2014 more than FY 2013.
- Domestic sales for Indian van segment are decreased to 183,786 units during the year FY 2014 from 237,298 units during the FY 2013, registering 22.6% decline.
- Lacks of newer products launched in van segment as well as increasing UV sales segment have resulted into decline in the van sales.
Key Market Players
List of Key OEMs
- Audi India
- BMW India
- FIAT Group Automobiles India Private Limited
- Force Motors Ltd.
- Ford India
- General Motors India
- Honda Cars India Ltd.
- Hyundai Motor India Ltd.
- Jaguar Land Rover Limited
- Mahindra & Mahindra Limited
- Maruti Suzuki India Ltd.
- Mercedes Benz India
- Mitsubishi Motors India
- Nissan Motor India Pvt. Ltd.
- Renault India Private Limited
- Skoda Auto India Private Limited
- Tata Motors Limited
- Toyota Kirloskar Motor
- Volkswagen India
- Volvo Auto India Pvt. Ltd.
- Sales of compact, super compact, as well as mid-sized cars are expected to settle on growth of the passenger cars segment.
- Compact MPVs and SUVs introduced with aggressive prices are expected to drive growth of UV segment within next 2 to 3 years.
- It is recognized that within Europe the mixing between the sales of gasoline and diesel vehicles is 50:50 as well as India is expected to go on same way.
- The slim down engine drift is anticipated to be well-known in utility vehicle sector.
- OEMs arrange to launch the newer compact MPVs and SUVs to benefit tax advantages given by government, as well as to get fuel efficiency.
- Society of Indian Automobiles Manufacturers