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Auto in top gear, India to be sourcing hub for global majors
New Delhi, Sept 28: Passenger car and motorcycle segments are set to grow by 8-9 per cent in the next four years to fuel growth in the auto sector and turn India into a `sourcing base` for global auto majors, ICRA said on Sunday.
New Delhi, Sept 28: Passenger car and motorcycle segments are set to grow by 8-9 per cent in the next four years to fuel growth in the auto sector and turn India into a "sourcing base" for global auto majors, ICRA said on Sunday.
"Indian automotive industry is likely to maintain the growth momentum picked up in 2002-03. India is likely to increasingly serve as the sourcing base for global automotive companies and exports are likely to gain increasing importance," the report titled 'Indian Automotive Industry' said.
The passenger car segment would grow at the compounded growth rate (CAGR) of eight per cent during 2004-2007, which might vary across segments, it said.
Mirroring the growing sales of compact cars, the report pointed out "growth in the medium term is expected to be led largely by the compact and mid-range segments. Although the mini segment is expected to sustain volumes, it is likely to continue losing market share".
Reflecting customers' penchant for high powered cars, ICRA's analysis on the auto sector said the Indian passenger car market was inching towards cars with higher displacements.
The Sports-Utility-Vehicles (SUVs) category, which was getting crowded day-by-day, would witness intense competition as many SUVs had been competitively priced, it said.
Global automakers like Honda, Suzuki, General Motors and Hyundai have launched their premium SUVs in the Indian market to broaden their portfolio and create product excitement in the segment estimated at about 10,000 units annually.
In the two-wheeler category, motorcycles would clock 11.5 per cent rise during FY 2004-2007 over its siblings - scooters and mopeds, the ICRA report said.
While scooters sales would decelerate, mopeds would ride southward, it said, adding the category would further witness segmentation into "various product and positioning platforms".
It said overseas market would present huge opportunities for the Indian two-wheeler makers.
Commercial vehicles, one of the yardsticks to gauge economic growth, is expected to grow at a CAGR of 5.2 per cent on the back of a spurt in industrial activities and Government's emphasis on infrastructure development and easy availability of finance.
Heavy CVs would rise at 5.5 per cent, sales of light buses and trucks will achieve 4.7 per cent growth. Demand for multi-axle trucks, which offer better economy in terms of transportation cost, is likely to get a boost from the National Highways Development Programme (NHDP).
For tractors, the report pegs the growth at 4.6 per cent.
States with high per capita income and large number of land-holdings have the best potential for tractors in the medium term.
For the longer term, any sustained demand would hinge on the ability of tractor manufacturers to develop new models meeting specific customer requirements, ICRA said.
The report said issues like downstream participation, vendor management, products range and economies of scale would be of paramount importance to auto makers. Bureau Report
The passenger car segment would grow at the compounded growth rate (CAGR) of eight per cent during 2004-2007, which might vary across segments, it said.
Mirroring the growing sales of compact cars, the report pointed out "growth in the medium term is expected to be led largely by the compact and mid-range segments. Although the mini segment is expected to sustain volumes, it is likely to continue losing market share".
Reflecting customers' penchant for high powered cars, ICRA's analysis on the auto sector said the Indian passenger car market was inching towards cars with higher displacements.
The Sports-Utility-Vehicles (SUVs) category, which was getting crowded day-by-day, would witness intense competition as many SUVs had been competitively priced, it said.
Global automakers like Honda, Suzuki, General Motors and Hyundai have launched their premium SUVs in the Indian market to broaden their portfolio and create product excitement in the segment estimated at about 10,000 units annually.
In the two-wheeler category, motorcycles would clock 11.5 per cent rise during FY 2004-2007 over its siblings - scooters and mopeds, the ICRA report said.
While scooters sales would decelerate, mopeds would ride southward, it said, adding the category would further witness segmentation into "various product and positioning platforms".
It said overseas market would present huge opportunities for the Indian two-wheeler makers.
Commercial vehicles, one of the yardsticks to gauge economic growth, is expected to grow at a CAGR of 5.2 per cent on the back of a spurt in industrial activities and Government's emphasis on infrastructure development and easy availability of finance.
Heavy CVs would rise at 5.5 per cent, sales of light buses and trucks will achieve 4.7 per cent growth. Demand for multi-axle trucks, which offer better economy in terms of transportation cost, is likely to get a boost from the National Highways Development Programme (NHDP).
For tractors, the report pegs the growth at 4.6 per cent.
States with high per capita income and large number of land-holdings have the best potential for tractors in the medium term.
For the longer term, any sustained demand would hinge on the ability of tractor manufacturers to develop new models meeting specific customer requirements, ICRA said.
The report said issues like downstream participation, vendor management, products range and economies of scale would be of paramount importance to auto makers. Bureau Report