India's domestic car industry may be heading for its first annual sales decline in 2011-12 but is expected to bounce back in 2012, to its position as one of the fastest growing car markets.
According to the estimates International Organisation of Motor Vehicle Manufacturers (OICA), worldwide production of cars is set to grow by 3% this year to around 82.5 million units with sales in India expected to grow by 12%. This is expected to be the highest in the world ahead of bigger markets like China, US, Europe and Brazil, and next only to Japan, which is tipped to grow by 20% after a dismal year in 2011.
"We club India in the group of Asia Oceania and African regions and it has led growth in this region," said Patrick Blain, president, OICA. "This region like China showed no signs of an economic slowdown during 2008-09 and has witnessed all time high peaks year-after-year. This year will not be any different."
The reason for the growth is simple. India has the lowest car density across regions with only 20 in a scale of 1,000 owning a car. The number is 50 for China and a high 815 for US. The world average is around 140.
"The fundamental need for mobility is a universal phenomenon and is key for all markets bouncing back right after a year of depressed demand," Blain said. "India and China offer potential for long term growth as the population is large and without options of mobility. These markets will continue to grow."
(The writer's travel & stay was sponsored by Tata Motors.)