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Our Bureau

Global trends indicate potential for Asia

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New Delhi Feb. 19 Passenger vehicles sales in the country will reach 2.1 million units by the fiscal year ending March 31, 2010, as economic growth and rising incomes persuade more people to buy cars, research firm Frost & Sullivan Inc said.

Sales is likely to grow at 14.9 per cent each year in the five years until then, the firm said.

Global production trends show stagnation of Europe, Japan and the US markets, indicating potential for Asia, with India expected to add a million passenger vehicle production capacity by 2010.

Over capacity in China and near stagnating sales in South Korea confirm that India could see the next round of investment in capacity addition.

"India is already moving towards becoming an export hub for small cars and is the fourth largest car market in Asia. Interestingly, India has the lowest car penetration rate of 8.5 (per 1,000 population) when compared to select developing countries such as Malaysia, Mexico, Brazil, Thailand, China, Sri Lanka, Indonesia and the Philippines, demonstrating the high potential that the Indian market has to offer,'' Mr Anand Rangachary, Managing Director, South Asia and Middle East, Frost and Sullivan, said.

Frost & Sullivan analysis also indicated that if the pace of economy continues to be as robust as it is at present, the commercial vehicles market is expected to grow at a CAGR of 27 per cent with volumes expected to touch about 9-lakh units by 2010.

Two-wheelers market on the other hand is expected to record 10.1 million by 2010 with motorcycles continuing to account for 80-85 per cent of the demand.

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