India’s car market is on target to become the world’s third largest by the middle of the next decade with annual sales around 8m a year, according to Mahindra MD and head of automotive operations Dr Pawan Goenka.
Speaking to just-auto in Seoul, Dr Goenka maintained that India is unlikely to experience rapid China-style growth of its automotive market due to infrastructure constraints.
“Will India’s car market get to 17m in a hurry? The answer is no,” he said. “I don’t think India could afford a market of that size in terms of infrastructure.”
However, he also believes that India has very good market demand growth potential, given the size of the population and economic growth trends, with market growth set to outpace that of China.
“In the medium-term, and the percentage growth from the base that we have, I think the Indian car market will grow a little faster – around 10-12% a year – than China’s in the next few years,” Goenka says. “China’s growth rate will be more like 8% or 9%. But that doesn’t mean we will catch up with China anytime soon.”
In the longer term, Goenka says the Indian car market will become the world’s third largest.
“By 2025 we think India will be the third largest world car market – behind China and US,” he says. “Right now, India is number 6, behind Japan, Germany, UK as well as US and China. We think we will overtake Japan, Germany and UK over the next eight years or so. We are about 4m a year vehicles now and will probably move to somewhere around 8m a year over that time frame.”