Owning a car is aspired by every Indian household and with low penetration, increasing income levels and resumption of buoyancy in the economy, the opportunity in the passenger vehicle market is humungous.

At present, around 30 out of every 1,000 households in India own a car. Even if the households that can afford owning a car are considered, the penetration is as low as 45 per cent. Having said this, of the households affording a car, around 70 per cent fall at the bottom of the income distribution pyramid and can afford owning a small car only. Furthermore, the excise duty on small car is lower at 8 per cent as against 20 per cent on big cars. This would translate into strong growth in the small car segment. The factors like households affording big cars but opting for small cars on account of their easier maneuverability given the traffic chaos and parking constraints in metros and poor infrastructure and congested agglomerations in smaller towns would help pushing the small car sales growth. Furthermore, rich households opting for small cars as their additional cars either for female or young members in the family or for smaller trips would also push small car sales.

Nano is foreseen to give a supply-side push to the small car sales, as its first year cost of ownership, which typically determines the threshold income levels for buying the vehicle, is around 25 per cent lower than Maruti’s 800, the next cheapest available car. This has added 1 million households that can afford buying a car by 2013-14.

The Original Equipment Manufacturers (OEMs) have taken into cognizance the humungous opportunity in small car sub-segment. Four out of the six launches till date in calendar 2009 fall in small car sub-segment, which includes Tata Nano, Maruti Ritz, Fiat Punto and Honda Jazz. Only Tata Manza and Chevrolet Cruze (General Motors) fall in mid-size sub-segment. Eight more launches are expected in the small car sub-segment in the next 15-18 months.

CARE Research has developed a detailed statistical model that attempts to forecast the domestic passenger vehicle sales. The sales are segregated between personal use and commercial use on the basis of interaction with the industry and analytical acumen. Vehicle sales for commercial sales are forecasted on the basis of service sector GDP growth, while the vehicle sales for personal use are forecasted on the basis of ownership cost and the target household that can afford to own a car.

Other qualitative factors like macro-economic outlook, consumer confidence, willingness of vehicle financers to finance purchases, actions of OEMs like launches, aggressiveness, sales push techniques, delaer network etc have also been quantitatively built in the demand forecasting model.

CARE Research foresees healthy growth of passenger vehicles in the next 4-5 years, with small car sales growth outpacing the growth in sales of big cars or sedans, as around 70 per cent of the households affording a car can buy a small car only.

Abundant and low-cost labour coupled with local availability of raw materials like steel, aluminium and natural rubber, coupled with healthy demand outlook and 100 per cent FDI has made India an attractive destination for foreign players that are eyeing our country as the hub for small car production.

In the light of low penetration, burgeoning mid-income populace and economy resuming its buoyancy, CARE Research expects domestic passenger vehicle sales growth to accelerate at a healthy pace in the next 4 – 5 years. Additionally, the launch of Nano has significantly reduced the cost of ownership and has thereby added 1 million households that can afford buying a passenger vehicle by 2013-14. This would give a supply side push to the growth of domestic passenger vehicle sales.

The advantages of abundant low cost labour, local availability of steel, aluminium and natural rubber as well as strong ancillary industry in addition to the 100 per cent FDI allowed in the sector has attracted global auto majors to set up significant capacities in India (which itself provides humungous domestic sales growth opportunity). The auto majors are envisaging India as the epicentre of small cars, which would drive exports of cars out of India.

The report is divided into four sections. Section I presents CARE Research’s viewpoint on the industry that covers domestic and export sales forecasts for the next five years and outlook on the profitability for next 15 – 18 months. Section II provides an in-depth study of the Indian passenger vehicle industry encompassing its evolution and the trends in the last five year. Section III provides profile of key players in the industry, while Section IV contains technical aspects and various key data tables as an Annexure to the report.

I. Outlook Section

* An executive summary is provided that briefly provides CARE Research’s viewpoint on the industry
* Outlook on domestic market provides five year forecasted domestic sales volumes of various segments and subsegments of the passenger vehicles. It also presents the trends going forward, the demand drivers and factors contributing to the forecasted growth.
* Outlook on exports provides five year forecasted export volumes of various segments and sub-segments of the
passenger vehicles. It also presents the trends going forward and the factors contributing to the forecasted growth.
* Description of CARE Research’s demand forecasting methodology
* Outlook on profitability and input costs.

II. Industry Section

* Introduction to the industry, including the industry evolution, classification, major clusters, Government policies
and Porter’s seven force analysis
* Detailed analysis of historical trends for each vehicle segment (namely, passenger cars, utility vehicles and multipurpose vans) and sub-segments is also presented in this section for both domestic as well as export market.
*  Analysis of the players and competition in the industry, their respective products/brands and how each of the players fared in the industry.
*  Description and analysis of the pre-owned car market.
*  The trends in imports, key sources and types of vehicles imported
*  Overview of the global scenario
*  Analysis of the cost structure, profitability and credit profile of the industry.

III. Company Section

*  This section provides the in-depth profiles of the key players, namely Maruti Suzuki, Hyundai Motors, Tata Motors, Mahindra and Mahindra and Honda Siel.
*  Snapshot of financials, segmental sales volumes and domestic market share, capacities and production for the last two years.
* Year of incorporation, promoter group, their share-holding pattern, joint-ventures and financing arm, plant locations, outstanding credit ratings, products on offer, description of competitive position, strategy and expansions, recent launches and CARE Research’s comments.
*  Segmental Break-up of domestic sales volume in 2008-09
*  Product portfolio

IV. Annexure

* This section provides technical aspects of the industry that details the key parts of a passenger vehicle,
manufacturing process and fuel technologies.
*  This section also provides various key data tables as under:

* Sales Volumes by segment and sub-segments for last five years: Domestic and Exports
* Player-wise Domestic Sales Volumes by segment and sub-segments for last five years
*  Player-wise Export Volumes by segment and sub-segments for last five years
*Player-wise Total Sales Volumes by segment and sub-segments for last five years
* Global Manufacturer-wise Production Volume for last five years
* Latest available sales volumes data
* Latest available financials of various players

For more information you can kindly go through the following url
http://www.bharatbook.com/detail.asp?id=129357&rt=Indian-Passenger-Vehicle-Industry.html