Strategy For Global Growth: Sell It To The Indians

Bertel Schmitt
by Bertel Schmitt
strategy for global growth sell it to the indians

Speaking of India, it’s about time that GM gets its act together on the subcontinent. If you aren’t somebody in India you are missing the boat. If the augurs augur right, the subcontinent will be the fastest-growing car market in the world.

A study by Ernst & Young says that the Indian market will clock the fastest compound annual growth rate (CAGR) between 2009 and 2020, more than double that of China and the triad of North America, Europe and Japan. India’s CAGR between 2009 and 2020 is likely to be 14 percent compared with China’s 6 percent, and the triad’s meek 4 percent, says the study, as reported by Indiacar.

No idea what a CAGR is? You are not alone. Wikipedia to the rescue. But if you are like me (please don’t,) you’ll return with a headache from the page. In the more tangible department, the study, commissioned by the Automobile Component Manufacturers’ Association ACMA, predicts that India’s car and SUV sales will more than double from 2.2 million units in 2009 to just over 5 million units in 2015. By 2020, China-sized sales of 10 million units are expected.

The head honchos who have invested into India agree: Carlos Ghosn has predicted that India’s passenger vehicle sales will hit around 6 million units by 2014 or 2015. VW’s Winterkorn, who can use every sale he can get for his Strategie 2018, thinks the Indian market will grow to 5 million units by 2018, and he wants a big slice of that pie.

Currently, India is the 10th largest passenger vehicle market in the world. If the predictions come true, by 2020, India will be amongst the top five.

Join the conversation
  • Ash78 Ash78 on Oct 05, 2010

    CAGR? Why that's just the end number minus the beginning one, quantity raised to the power of one over the number of periods observed minus 1. Or something like that... It's sort of a way to "back into" the miracle of compounding when given a specific start and end number (ignoring the ups and downs in between).

  • Snabster Snabster on Oct 05, 2010

    I have no doubt India will become a much larger market for automobiles. Whether it will provide Chinese level growth is another question. India's road infrastructure is going to be at least a generation behind China's. Cities are already undriveable. And cars there are going to be small and cheap for a long time -- scooter replacements. India's rich are probably more globalized than Chinese rich, and have other places to spend their money. I could be wrong, but I don't see that level of luxury cars taking over.

  • Dimwit Dimwit on Oct 05, 2010

    I agree with snabster. All the growth will be in the Tata/Suzuki end of the pool, a rather difficult swim at the best of times. Cos like GM really haven't much of a chance to make an impact for quite a few years yet. Wait and attend to their knitting in China would be the wiser move.

  • Zackman Zackman on Oct 06, 2010

    Can the U.S. import Tuk-Tuks?