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India Tops Growth in PV Sales
Jul 25, 2017


India is the fastest growing market for passenger vehicles (PV) among the top seven car markets. China continues to be the world's biggest auto market by volume.

During January- May 2017 period, India's PV sales expanded by 11.3% YoY. This came when the top two markets, China and the US saw a declining trend where volumes declined by 2.6% YoY and 9.8% YoY respectively. India's double-digit growth was led by companies like Maruti Suzuki, Hyundai, Honda and Tata Motors.

The double-digit growth came despite the auto industry witnessing some turbulent time in the last six months as demonetisation put a pause on a great run. Towards the end of fiscal year, a Supreme Court order banning the sale of vehicles that don't conform to Bharat Stage IV emission rules saw some fire sale.

Nevertheless, the blip is expected to be temporary. Reduced vehicle prices post GST, low interest rates, attractive discounts and expectation of good monsoons, will provide support to the industry.

Another interesting aspect of growth is low penetration of PVs in India, which is currently pegged at 19 vehicles per 1000 people. In comparison China penetration stands at 76 per 1000, UK 455 per 1000, Germany 544 per 1000, USA 360 per 1000.

It is important to note that developed markets such as USA, UK and even China have reached the saturation point and are slowing down, enabling developing markets like India to grow at a faster pace.

As per Market research firm JD Power, Indian passenger car segment is expected to grow by over four-fold in 2020 and expects India to grow into the third-biggest car market.

Data Source: SIAM, Business Standard

This Chart Of The Day was published in The 5 Minute WrapUp - Insider Leaks Equitymaster Stock Picks

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