New Delhi: Market research firm JD Power on Tuesday said the Indian passenger car segment is expected to grow by over four-fold to 93 lakh units in 2020 to become the world’s third largest car market.
“According to our projections for 2020, the passenger car segment of the Indian automobile market is likely to reach a size of 93 lakh units and it will become the third largest global car market,” JD Power Asia Pacific executive director Mohit Arora said.
The country’s car market is estimated to be 21 lakh units in this calendar year, he added.
“India will possibly cross the Japanese car market by 2014. Only China and the US will be ahead of India in 2020,” Arora said, adding China would be on the top with sales of almost 3.5 crore cars every year.
He said the growth in India will primarily be coming in from Tier II and III cities, where infrastructure at present is a big impediment compared to China.
JD Power believes that the current market leader Maruti Suzuki India will remain the numero uno in the country, but its market share will fall below 50% in the next decade.
Arora said that although there will be many new entrants till 2020, but primarily Tata Motors and Hyundai Motor India will gain significant market share.
Talking about the dealers, who are indispensable part of the automaker’s growth, Arora said dealerships need to be viable to get the return on investments, as margins are lower in India compared to that of Europe.
“While growth is there in the market, getting new dealer is a challenge, mainly because the amount of money required to set up a dealership is huge,” he added.
Usually a dealer, who wishes to have a showroom of 5,000 sq ft and a service station of 6,000 sq ft, needs to invest Rs 35-40 crore only on putting up the machineries and other infrastructure, he said.
“The auto makers should relax the norms of setting up a dealerships...If someone can give the same service with 4,000 sq ft area instead of 5,000 sq ft, then why not? Its all about optimising the resources,” Arora said.