India (Part 1): Extension of reform measures drives sales growth
OEMs striving to launch midsize passenger cars in market where small cars prevail
This report contains an overview of the automotive market in India. India's domestic sales in the fiscal year (FY) 2013-14 (April 2013 to March 2014) declined by 9.3% year-over-year (y/y). It was the first decline in five years. With the election victory by Prime Minister Narendra Modi in May 2014, India's vehicle sales started to increase y/y in May in the passenger car market and in June in the overall automobile market. The former administration had decided on a temporary excise tax cut through June. The tax cut measure was extended to the end of December under the new administration.
More than 60% of the present passenger vehicle market in India is occupied by compact and smaller vehicles with the overall length below 4 meters. Vehicles in the midsize segment sell well too. For instance, Honda saw a boost in its City sale while Maruti Suzuki launched the CIAZ midsize sedan. Maruti Suzuki has plans to launch three more midsize models. Toyota reportedly is developing midsize sedans for India. The present market situation and plans among OEMs in India will be summarized in the upcoming India report (Part 2).
Related Reports: Suzuki: Plans to sell 3 million units in India and increase local ASEAN production (Oct. 2014)