India registered fastest growth in the auto market with production growth of 8% at a time when the automobile production in the global level has declined for the first time in a decade by close to 1.1% to touch 95.6 million units.
A data from the international organization of automobile manufacturers OICA, notes that the automobile production (passenger and commercial vehicles) in India has risen up by 8% to touch 5.17 million units last year. Brazil expanded growth by registering 5.2% growth to 2.87 million units, albeit on a smaller base.
In China, the automobile production declined by 4.2% to (27.80 million units), the production in the US and Japan improved by 1.1% to settle at (11.31 million units) and at 0.4% to touch (9.72 million units), respectively.
The production of passenger vehicles shot up by 2.8% to touch 4.1 million units. Output in case of commercial vehicles improved by 34% to 1.1 million units.
Mr V G Ramakrishnan, Managing Partner at Avanteum Partners LLP stated that "This growth in production has largely come on the back of strong sales, particularly of commercial vehicles, in the first 8-9 months of the year...Several economies the world over are in a recession. India is the only major country with solid growth behind it. If not for the global slowdown, which has hit exports, the growth rate of production in the country would have been even higher."
A rise in insurance expenses added with fuel prices and liquidity tightening after the IL&FS crisis affected the local demand during the second half of the year. The growth is likely to be revived in fiscal 2020, believes industry insiders with customers advancing their purchases ahead of the anticipated price rise on account of implementation of BS VI emission standards with effect from April 1, 2020.
Toyota Kirloskar Motor's Deputy Managing Director (Sales & Marketing), N Raja, said that "Unlike in developed economies, where new car sales are largely driven by replacement demand, a major portion of purchases in India happen on account of first-time buyers. They contribute 35-40% to new car sales, unlike in Japan where this customer set chips in with less than 10%. Given the demographics, growth potential in India should remain strong in the long term."