• 70% of sales were motorbikes (light blue), versus 66% in 2010-11
• Car sales (purple) were steady at 14%
• Overall, bike sales jumped 14% to 13.4m
• Car sales were up just 4% to 2.6m
The reason for the gain in bike sales is India’s slowing economy, coupled with the high price of gasoline. It is a very poor country, ranking 140th in the world in terms of GDP/capita at just $1389/year last year. Car sales in August were down 4% at 185k as a result.
This is why Nissan’s move to develop a car that sells for $3k is potentially so important. Indians do not like riding around with the whole family sitting on a motor-bike. It is dangerous, uncomfortable and can often mean they get both dirty and wet.
The company that creates a car they can afford will do very well indeed. After all, if 10% of bike owners were to swtich from a bike, then the car market would expand by 50%. That is the size of the opportunity.