The Indian Car Promise

India is no China when it comes to cars, but then again, it's almost time for the $2,000 Nano.

What's the potential car market in India? Many of us were tied to the past. We thought of India, and we saw sacred cows, elephants, jammed streets, slums, beggars and millions of people dressed like Gunga Din. Then we saw Slumdog Millionaire, and we saw skyscrapers and luxury homes and cars. So what's the story? Is India another China when it comes to cars?

In fact, the car market in India is still largely a promise. Car sales have grown, yes, but they are still a fraction of China's vigorous market. This year's sales may push past 1.6 million cars and light commercial trucks. That's double the 800,000 of 2002--but it still isn't that many. And Western companies are extremely small in India, unlike in China, which might be the world's No. 1 vehicle manufacturer this year.

To make this clear, look at four-month sales through April: 649,000 cars and light trucks in India compared with 3.7 million in China. And China's sales are still climbing, while India is flat. Mind you, flat isn't bad this year, unless compared with China.

Who sells there? A Suzuki ( SZKMF.PK - news - people ) partnership called Marudi Suzuki is the dominant player, with 43% of the market. Next is the Korean Hyundai Group with 14%. But our big players are minor actors in India. Honda ( HMC - news - people ) accounted for only 22,000 car sales in the first quarter, General Motors' ( GMGMQ.PK - news - people ) Chevrolet (also from Korea) 19,000, Toyota ( TM - news - people ) 13,000 and Ford Motor ( F - news - people ) 10,000.

Check the first four months' car production. These production figures come from J.D. Power, which does a thorough job of collecting numbers from India and China.
http://www.forbes.com/2009/06/30/flint-india-cars-business-autos-backseat-driver.html