By on June 13, 2011

A lot has been said about the new car potential of populous India. This time, they mean it, says J.D. Power. India surpassed France, the United Kingdom and Italy to become the sixth-largest automotive market in the world in 2010. In 2020, India is expected to become the world’s third largest auto market. This according to a special report titled “India Automotive 2020: The Next Giant from Asia,” released by J.D. Power and Associates.

More than 2.7 million light vehicles (passenger cars and light-commercial vehicles) were sold in India in 2010, up from just 700,000 light vehicles sold in 2000. J.D. Power expects India to reach 11 million light-vehicle sales by 2020. This would be what Americans bought last year. It would also make India the third-largest light-vehicle market in the world, behind the United States, which J.D. Power projects to return to its former glory of 17.4 million sales in 2020. By that time, J.D. Power expects the Chinese market to reach 35 million light-vehicle sales, double the projected number of the U.S.A.

What is standing in the way of even higher motorization of India? It’s India’s “three deficits:” Continual international trade deficits; chronic government budget deficits; and an underdeveloped power generation and distribution infrastructure. According to J.D. Power, “the country’s lagging infrastructure poses the biggest potential obstacle to future growth.”

Readers who pay attention may think J.D. Power’s numbers are a bit off. India’s 2010 numbers had been reported as 1.87 million, J.D. Power says it was 2.7 million. The official Chinese number for 2010 was 18.06 million, J.D. Power says it was 17.2 million. Where is the confusion?  The 1.87 million reported by the Wall Street Journal for India omitted commercial vehicles. The Chinese number includes commercial vehicles. J.D.Power attempts to replicate the American “light vehicle” count, which often is not officially tracked in other countries.  Cars classified as “commercial vehicles” (trucks, vans, etc. can have a large impact on the count, especially in emerging markets, but also in the U.S.A.  Please refer to my treatise on car counting. And watch out for some wire services, notably the Associated Press, that blatantly report wrong numbers when it comes to pass.

TTAC’s position is that in absence of hard light-vehicle data, the total of all automobiles should be taken. It is much closer to the light vehicle count than passenger vehicles. And most of all, it is the number which the world’s car counting authority OICA uses.

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7 Comments on “Sell In To The Indians: India To Become World’s Third Largest Auto Market By 2020...”

  • avatar

    Of all the BRIC countries, India is the one I will mostly stay away from. China is the only one that will become really successful as proven by Chinese enclaves Macau, Hong Kong, Singapore, Taiwan and Chinese everywhere. They are successful wherever they go. They are the single wealthiest ethnic group in the whole of Southeast Asia.

    At least Russia and Brazil have vast oil reserves to save their lives.

    • 0 avatar

      The way I see it, much of your comment is just biggoted and racist BS. Are you trying to imply to Chinese are somehow smarter or harder working than ethnic Indians only because Macau, HK, and Singapore are wealthy? Come here into the United States and witness the number of Indians working in the Information Technology industry, including in the Silicon Valley, the number of Indians pursuing advanced degrees in business, computer sciences, engineering, or medicine,etc. The fact that Macau, Hong Kong, or Singapore are wealthy economies are nothing surprising. Place densely populated cities and/or nation states in the middle of world’s most important maritime transportation routes and you will have Macau, Hong Kong, Singapore, etc. They fact that they are wealthy economies says almost nothing to me about the ethnic Chinese vs Indian work ethic or success on the mainlands.

      • 0 avatar

        While I don’t agree with eldard’s reasoning, I don’t see how India can be successful in the long term. Inida’s population growth is much greater than that of China and Russia, and its land mass is fraction of either country. India can be somewhat successful with 1billion people, it can’t with 2 billion. China has (through draconian measures) taken control of its population growth, India has not. If someone can explain to me how India can succede with current population rates, I am sincerely interested.

      • 0 avatar

        jeoff – I am not sure if they will be successful with 2 billion people but China’s “successful” population control measures have meant a gross imbalance between boys and girls (due to cultural preference). You have millions of young men with no hope of getting married or having long term relationships – not exactly a great omen for the future either.

      • 0 avatar

        Mike, India’s UNsuccessful population control has led to the same “gross imbalance between boys and girls (due to cultural preference)” that is ocurring in China. So, in India you will have millions of young men starving AND “with no hope of getting married or having long term relationships.” I do not see how that turns out well.
        On the other hand, if China’s financial success continues, I am sure that there will be no shortage of women from other countries that will be willing to migrate to China, if the government determines that there is such a need.

    • 0 avatar

      That “gross imbalance” is partially truth, and partially fiction. In the truth department, many Asian cultures have always favored male offsprings. Selective abortions are just as in favor in India as they are in China. In China, they are against the law. Rich people can skirt the law by going to Hong Kong, poor people won’t even get a visa to Hong Kong. The one child policy never applied to farmers anyway.

      In the fiction department, here the latest stats from the Chinese census:

      “Of the population enumerated in the 31 provinces, autonomous regions and municipalities and servicemen of the mainland of China, 686852572 persons or 51.27 percent were males, while 652872280 persons or 48.73 percent were females. The sex ratio (female=100) declined from 106.74 to 105.20.”

      There actually are MORE women than 10 years ago (last census.) Nature tends to produce always a few men more, the current world wide sex ratio at birth is estimated at 107 boys to 100 girls. The value for the entire world population is said to be 101 males to 100 females.

      Nobody seems to complain about selective abortions in India. For China, images of sex starved men that roam the streets are being whipped up.

  • avatar

    I have a hard time imagining this.

    Indian cities are just clogged right now. The only argument for having a car is the commute across town is 2 hours is in air conditioning rather than a a scooter or bus. Yes, you can blow up some slums and build expressways, but they still can’t handle a volume of traffic that this would entail.

    Where is India going to import the gasoline or diesel?

    And even if you go hybrid or electric the power system can’t handle it.

    Hell, just moving cars on trucks on Indian roads is a nightmare.

    I see a bright future for Indian trucks. But the more trucks on those roads the harder it is for cars. It is already bad, and wait until those new roads falls apart because of truck traffic in five years.

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