Apr. 9 – India is the second fastest growing vehicle market in the world. The main reasons for this are its rising levels of disposable income and the country’s growing middle class. The passenger car density in India is still very low, 11 per 1,000 people, compared to 45 per 1,000 in China. However, while growth potential is plentiful, traffic congestion and pollution could crop up as problems in the future.
In 2011, fuel prices across India rose in response to the government’s raising of interest rates. Despite these unfavorable circumstances, and the fact that car sales fell in the second half of 2011, 2012 observers are optimistic about prospects for the local Indian vehicle market. Expectations are a rise in vehicle sales by 10 percent in 2012.
This optimism is also shared by German luxury automaker BMW which made its premium small car MINI available in Mumbai last week through the first dedicated leadership in the country. The automaker plans to open four to five additional exclusive outlets in India by the end of this year. The MINI showroom in New Delhi is set to open next month, while outlets in Hyderabad, Chandigarh and Bangalore will be setup sometime after.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in India. For more information, please contact india@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.
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