Passenger car mart to grow 51% by 2010

The domestic passenger vehicle market is expected to grow more than 51 per cent by 2010, according to PricewaterhouseCoopers' eighth annual 'Global Automotive Financial Review'. From a volume of 7.5 lakh passenger cars in 2000, the country will witness a market of 19 lakh cars in 2010, the study said.

Among a number of growth drivers, it said, primary would be graduation from two-wheelers to four-wheeled vehicles (at present, two-wheelers constitute 77 per cent of the domestic automotive industry's production), a growing middle-class population with rising income levels and greater disposable incomes, a stable economy, growing urbanisation, rising tendency of owning a second car in urban areas, low vehicle penetration (current ratio: six cars per 1,000 people), increased availability of financing at relatively low rates of interest and price discounts offered by dealers and manufacturers. The automotive manufacturing sector witnessed a steady growth of 12 per cent CAGR (compounded annual growth rate) during 2000-2005.

Small cars represent the largest segment accounting for about 70 per cent of the passenger vehicle market. Future growth would mainly hinge on this segment because of the vehicles' fuel efficiency and low operating costs, the study said.

With almost every major global vehicle manufacturer establishing assembly facilities in the country, investment in the automotive sector was approximately $3.95 billion in 2004-05. Further, according to the study, while Maruti's market share will decline 15 per cent to 33 per cent in 2010, Hyundai will maintain it at 25 per cent. Again, Tata Motors is likely to a fall in market share to 5 per cent from 7 per cent now, while Honda Siel will retain its share of 4 per cent.