Munich-based global consultancy Roland Berger Strategy Consultants said in a recent report that the passenger vehicle and two wheeler segment in India is headed towards a double digit growth.
As per the report, the passenger vehicle market is expected to grow at a Compound Annual Growth Rate (CAGR) of 12 percent, that is, 5 million units by 2020.
The two-wheeler market is expected to grow at the same pace as well to 29.5 million units, whereas the commercial vehicle segment in India will grow at 7 percent, to 1.1 million units.
At this growth, the auto component sector will become a USD 100 billion industry in the next ten years.
Wilfried Aulbur, managing partner at Roland Berger Strategy Consultants, said, "We have done studies across 140 countries and we have found a very strong correlation between vehicle penetration and GDP per capita."
"Our assumption is that the GDP growth will be at a CAGR of 7 percent till 2020 in India and if we grow at 7 percent, then the segment growth forecasted will be fairly evident."
As per Roland Berger's report, within the passenger vehicles, micro cars will grow by 29 percent, mini cars by 6 percent, compact cars by 6 percent, super compact cars by 10 percent, midsize cars by 15 percent, executive cars by 22 percent, premium and luxury cars by 84 percent, UV segment by 19 percent and vans by 17 percent.
By the year 2025, vehicle penetration in India is to grow the quickest at 12.5 percent to 72 vehicles per 1,000 from 12 vehicles per 1,000 in 2010. China will grow at 10.1 percent to 187 vehicles per 1,000 people, Brazil at 3.8 percent to 221 per 1,000 and Russia at 4 percent to 388 vehicles per 1,000 people.