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Carmakers Bet on India Despite Sluggish Sales Growth
Car sales are growing slowly in India, and current capacity is being used at only about 50%. Yet carmakers continue to invest to prepare for an expected surge in demand over the next several years, The Economic Times reports.
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Car sales are growing slowly in India, and current capacity is being used at only about 50%. Yet carmakers continue to invest to prepare for an expected surge in demand over the next several years, The Economic Times reports.
Market researchers IHS Automotive expect India to become the world's third-largest auto market with annual local production growing to 6 million units by 2020.
The ET says 10 carmakers have invested 316 billion rupees ($4.9 billion) within the past 12 months to boost capacity in India. Several are planning new investments in the next year or two.
The newspaper figures India's car market must grow at least 10% annually to absorb already-committed new production capacity. The risk for carmakers is continued overcapacity. But the ET says manufacturers clearly are eager to avoid being caught short as they were in 2009-2010, when surging demand overwhelmed them.
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