India’s motor industry focuses on ‘Nano’ cars

India autos May10.pngIndia was the only major country to see auto production growing last year. With the Asian Petchem Industry meeting opening in Mumbai, it seems timely to look at the progress of the Indian motor industry in recent years. As the chart shows (data from the Society of Indian Auto Manufacturers) , the sector has been growing at 12% since 2003/4:

• Two-wheelers (blue column) dominate sales, with 9.4m sold last year
• Auto sales (dark blue) were 1.95m last year, 14% of total output
• Exports (purple) were in 3rd place, and have grown 25% pa since 2003
• Motor bikes are 63% of exports: autos are 25%

Encouragingly for the Indian chemical sector, the government provides strong support for the motor industry. As summarised in its ‘Automotive Mission Plan, 2006-2016′, the aim is to generate 25m additional jobs by 2016, when the industry should account for 10% of GDP.

The key focus is on smaller cars, such as the Tata Nano. It sells for $2k, with fuel efficiency of 26 kpl (73 mpg). As described by Ratan Tata at its 2008 launch, the concept is to provide an alternative for “families riding on two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby“.

This growth should provide major support for polymer sales, as manufacturers look for new ways of improving fuel efficiency whilst keeping costs down.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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