|Soviet Car Mod, englishrussia.com|
Selling and rate of manufacturing of car and auto parts are often related to the country's economy along with steel and electricity production. Asian countries has been creative with car manufacturing by rolling out eco-friendly cars as well embedding smart electronics. Indian and Russian companies on the other hand have not explored the Automobile R&D and manufacturing to the fullest yet.
Biggest auto companies from America, Europe and Asia have their manufacturing plants in India, signalling a great potential and skills that Indians carry in this industry, more and more luxury brands which are entering India are positive with the response they got from the consumers of the country, signalling that so called financially tight Indians are now willing to spend if they get the best, which gives a good hope about the future of auto industry in India.
India and Russia both have recorded a huge growth in the car market this financial year due to growing middle class, support from banks, loan schemes and car finance deals. Russia's car market continued its momentum in June with 272,125 sales, up 10.2% from last year. The Year to Date June sales were 1.4 million, up 14.6% from last year. Among the gainers there are mostly Chinese companies, Russian company Autovaz (Known for Lada) share at 16.5% was the worst ever. This was the 27th consecutive year on year gain in Russia.
Chinese companies have really well targeted Russian car market by rolling low cost products that suits most of the Russian consumers, however in terms of quality, Russian consumers agree that Chinese cars are not that good and they would prefer other brands. In the first half of this year, Chinese companies have doubled their sales in Russia, whereas the Soviet Era Lada (Autovaz) is having a bad time having worst ever share of 16.5%
In India, on the other hand, there is an expected growth of 10%-11% in used car market compared to the 3%-4% last year. Auto market in India has been hit, with the rise in inflation and fuel price, affecting the sales of new cars. However, used car sales are typically less affected and are subjected to a slower fall in growth than new cars in a market which is hit by slowdown. In the developed market like the US and Europe for every one new car sold, the industry sells around 2.8 used cars. In India, that ratio is still 1:1. As the market grows and people are introduced to new car models, consumers will change cars frequently, that will in turn help the growth of used car sales.
Meanwhile, the New Delhi based car maker, Maruti is aiming to sell Petrol cars abroad. The company has identified Africa and South East Asia as the potential market for them, the step was taken due to the declining popularity of petrol vehicles in the domestic market as diesel is highly subsidised in India. Exporting of vehicle will also help the company offset the costs of importing auto components as the rupee has declined by 19 percent against the US dollar in the past year causing the cost of import to double.
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