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Indian Car Companies to be in top 6 car makers in the world by 2020: Study

By Motortrend India Staff   |   17 September,2009

In a recent study conducted by global consultancy firm Deloitte, it has been revealed that at least one Indian company will be among the top six carmakers by 2020. Releasing a study 'A New Era: Accelerating toward 2020 -- An Automotive Industry Transformed', the firm said the car industry would see a massive capacity building in low-cost locations like India and China as manufacturers shift base from developed regions.

"May be six Original Equipment Manufacturers (OEMs) would dominate the market and control 90 per cent of the structure by 2020, of which one may be from India and another one or two from China," Kumar Kandaswami, Senior Director, Touche Tohmastu India said.

However, he did not name any specific company which could be in the global top six list and said it could be an entity following mergers or acquisitions in the future. India carmakers like Tata Motors and Mahindra & Mahindra have already made their global aspirations public.

Supplier networks would also follow the trend, he added. "Cost is a big factor, as well as in the consolidation of the industry. Besides the emerging economies have huge pool of trained manpower," Kandaswami said.

In India, there would be more focus on low-cost cars, while, at the same time more and more middle class consumers would go for luxury segment four-wheelers. "As a significant and growing market, it is interesting to see that India will be distinct in terms of some of the global themes on account of the demographic and customer profiles," he added.

According to the study, Indian consumers are becoming more conscious about alternative fuels and green technologies, although price is still an issue. India is likely to become a hub for small and compact cars due to various factors including growing domestic demand, low labour cost and sound supplier network.

According to Deloitte, the consumer trend in India would be guided by factors such as price, fuel economy and life-cycle of vehicles. "The Indian economy is shifting towards low-cost cars and we could see some big jump in the so-called Nano segment. While, India would remain a huge entry-level car market, there would also be more demand for luxury segment cars from the middle class," Kandaswami said.

However, a distinct luxury segment would evolve only after the car ownership rate in India reaches 20-25 care per thousand people, from 10-11 cars per thousand people now, the study said. By 2020, green technologies would come to dominate the car industry worldwide, with 20 per cent of the cars likely to be 'green cars' by that time, it added.

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