New Datamonitor report stresses growth opportunities for India
The Recovery from Recession survey conducted by Datamonitor shows a clear increase in the percentage of Indian consumers maintaining or increasing their level of expenditure while purchasing cars. According to the survey, in June 2009, 26% of Indian consumers were ready to extend their budgets and maintain or increase their expenditure in the following three to six months for car purchases. This went up to 26% in December 2009 and 33% in March this year. This shows planning on the part of consumers towards budget flexibility.
According to the figures recently released by the Society of Indian Automobile Manufacturers (SIAM), domestic car sales stood at 143,976 units in April 2010, against 103,227 units in the same month last year, up 39%. A total of 14 out of the 16 car makers in the market have witnessed healthy growth in demand during the beginning of this year. The majority of growth came from the small-car segment which continued to account for more than 70% of the total sales.
Datamonitor says that growth in the market has been triggered by the availability of new models as well as cheap loans and lower interest rates. It adds that the recovering economy and monetary easing aimed at beating the effects of the global downturn have also helped the industry to a great extent.
However, the shift in consumers’ mindsets also plays an important role. As comfort, luxury and a hint of class dominate buyer’s tastes, more and more Indians are willing to stretch their budgets while purchasing cars.
The report adds: 'Cars are no longer a luxury. The entry of the middle class in the consumer circuit has changed the automobile landscape. With a wide range available in the market and external factors which influence purchase decisions improving, consumers have a lot more options to explore and they are willing to invest, highlighting the fact that this upward trend is predicted to continue.'