India zooms past Korea in Asian car sales; Chinese carmakers drive into US
31 August 2006
The Indian car market is speeding ahead. It has overtaken Korea to become the number three market in the Asia-Pacific. That''s because more people are buying cars in India.
Between April and June 2.43 lakh cars were sold in India against 2.25 lakh in Korea. Two years earlier, Korea led India by about 36,000 cars. Carmaker General Motors believe low penetration of 8 cars per thousand people and a strong economy offers potential.
"It''s still not a huge market compared to Europe or North America. But I believe with economic growth, which we think will stay robust and with more and more Indians buying cars, this is going to be one of the fastest growing markets in the world," said Nick Reilly, Group VP at GM.
Tax sops in China and India and attractive and finance options have also encouraged many first-time buyers. China sold 1.1 million cars between April and June. It has now displaced Japan as Asia''s premier market. Two years earlier, China trailed Japan by 4.48 lakh units.
"In the Indian market, in 2005 and I believe in 2006 also, companies will actually make money. India is growing and profitable. That''s not necessarily the message from China, where the intensity of competition is reaching feverish levels," said Kavan Mukhtyar, director, APAC at Frost & Sullivan.
The Indian market is expected to grow 10 per cent to 15 per cent a year. And it will get a boost as a small car hub if excise duty on them falls further.