India May Be Next Major Automotive Growth Market

Now that Chinese growth is beginning to slow to more globally normal levels, automakers are beginning to look for the next major growth market, and one of leading contenders to be the location of the next boom is India. Not only is the market growing quickly, but automakers predict that it might be easier to succeed in the Indian market compared to China. 

One of the major problems in selling cars, especially reasonably priced cars, in China is that Chinese consumers have very different desires than European buyers. China wants sedans and large rear seats. Hatchbacks have problems selling in China and make up just 4% of the total auto market there. 

However, early indications have shown that the Indian market has desires closer to European buyers. India is already the world's largest market for hatchbacks. There are some differences like extra cooling and air conditioning equipment is almost a necessity in India, but the general design sensibilities are similar. Indian buyers want smaller cars that are easier to park and with good fuel economy, especially in the city. 

"You will not get growth from the matured markets so emerging markets such as India, Korea, Brazil, Russia and China are very important," said BMWBMWGermany, 1918 > present87 models
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President in India Philipp von Sahr.

BMW and MercedesMercedes-BenzGermany, 1924 > present197 models
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plan to launch their 1 SeriesBMW 1 Series Gen.2 [F20] Germany, 2011 > present130 versions
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and A-ClassMercedes-Benz A-Class Gen.3 [W 176]Germany, 2012 > present33 versions
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respectively in India in the coming year, and AudiAudiGermany, 1909 > present83 models
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may launch the A3Audi A3 Gen.3 [Typ 8V]Germany, 2012 > present275 versions
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in 2014. While India is still a relatively poor country, these small, luxury hatchbacks are within the reach of the middle class. 

Analysts predict that the Indian auto market will quadruple by 2020, and it will be the world's third largest car market by then. 

While growth is high, sales are still relatively small compared to more established markets. Audi sales were up 63% in India in 2012, but it sold 9,003 cars. In comparison sales were up 30% in China in 2011 to 405,838 cars. 

The next 12 months will be a major turning point in the Indian auto market. Audi has added the Q7Audi Q7 Gen.1Germany, 2006 > 201450 versions
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to its slate of models that it builds India. In 2012, RenaultRenaultFrance, 1898 > present189 models
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launched three models in India, and JeepJeepUnited States of America, 1941 > present33 models
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will have a truck on sale there by the end of 2013.

JaguarJaguarUnited Kingdom, 1922 > present53 models
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Land RoverLand RoverUnited Kingdom, 1978 > present15 models
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partially because of its ownership by Indian automaker TataTataIndia, 1945 > present5 models
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has made a major push into India. Its Pune factory just started building the XFJaguar XF Gen.1United Kingdom, 2007 > 201570 versions
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there exclusively with the 2.2-liter diesel. The Land Rover FreelanderLand Rover Freelander Gen.2United Kingdom, 2007 > present65 versions
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is also built there. Group sales were up 32% there last year. 

Source: Automotive News Europe