Car sales in India are expected to pass the 2.6million unit mark by the end of 2010 according to a Business Monitor International (BMI) report.
The surge has been prompted by an increasing number of affordable small cars and demand from less penetrated segments, including rural areas. The Diwali celebrations in particular prompted record sales in October 2010 with a 38 per cent increase in car sales and 18 per cent growth in commercial vehicle sales. This means that four-wheel vehicle sales for the first seven months of the financial year are up 35 per cent compared to the same period in 2009-2010.
Even though rising raw material costs have lead many carmakers to hike prices, the number of months’ salary required to buy a car is falling with BMI suggesting this will provide some insulation against rising costs.
There are now reports that Hyundai will enter India’s commercial vehicle market in what would be the latest in a growing tend of carmakers moving into a large growth segment. BMI expects growth in the region of 17.4 per cent for the whole commercial vehicle market in India in the current financial year ending March, 2011, with light commercial vehicles likely to outperform the wider segment with sales up 29.7 per cent.
