Indian passenger car sales are likely to touch 5.1 million units per year by 2030, at a compound annual growth rate (CAGR) of 3.5 percent, the highest in Asia, Moody’s Ratings said in a report on Wednesday, May 28.
The rating agency said that India’s conventional or internal combustion engine (ICE) car segment will remain lucrative for global automobile companies even as they pursue electric vehicle (EV) opportunities in other markets.
India will continue to be a key market for these global automobile companies owing to its growing working age population, increasing income and the country’s positioning as an export base, Moody’s Ratings said.
The Indian car market, however, is characterised by stiff competition, with multinationals, including Japanese, South Korean and Chinese automakers, making up over 70 percent of the market through joint ventures (JVs) and subsidiaries, while homegrown companies account for only about a quarter of sales, it said.
India’s fledgling car market has been traditionally protected by high import tariffs, but the recent trade negotiations, particularly the free trade agreement (FTA) pact with the UK, indicate that the government is under pressure to open up the domestic market.
