In the next three years, India will become the world’s fourth largest passenger vehicle market but will require an investment of almost USD 20 billion to build up to nine new plants to meet the demand by then, according to global consultant Booz&Co. At present, the Indian PV market is the seventh largest in the world and it is expected to grow at 15-20 per cent every year till 2013, he added.
The Indian passenger vehicle (PV) market will touch 3.5 million units mark in the next three years, it said. “By next three years, India will be the fourth largest PV market in the world. Only the US, China and Japan will be ahead of India,” Booz&Co Partner Vikas Sehgal said.
According to Society of Indian Automobile Manufacturers (SIAM), the PV market stood at about 2 million units in 2009-10 and is expected to reach 2.4 million units in this fiscal. “India will even cross Japan by selling about five million PVs by 2017-18. India, in next three years, will need 6 to 9 new car plants with an average annual capacity of 1.5 lakh units... This will require at least USD 15-20 billion investment,” Sehgal said.
To achieve this feat, auto makers will have to not only increase capacities but will also have to enhance their dealer network, strengthen component sourcing chain and enhance R&D capabilities. Under the Automotive Mission Plan (AMP), the Indian market had earlier planned to become a USD 145 billion by 2016, for which USD 35-40 billion investment is required.