India is poised to become the second-biggest consumer economy in the world by 2020, and has the world’s second-highest car-buying demand, a report said on Wednesday.
According to the report by Indian Automobile Manufacturers Association, India is set to overtake China as the world leader in car buying in 2020, with a global average of 1.4 million vehicles being sold in the country each day.
India’s total vehicle market has grown by 20 per cent from 1.2 million vehicles in 2015 to 1.5 million vehicles last year, it said.
The association’s annual survey of global car buyers shows that the average price of a car in India is currently Rs 7,000 ($1,622), up 9.5 per cent on the previous year, while the average value of a vehicle is Rs 6,700 ($1.077).
The report said that, as of July, Indian consumers were spending on average 3.6 times more on cars than Chinese consumers.
The report comes after a similar survey from Indian auto industry trade body, Indian Automotive Manufacturers and Exporters Association, in July said that consumers in India are spending more on automobiles than Chinese people.
The survey was conducted by the association between January to June, with 1,600 respondents.
The group said that over the last four years, India’s automotive market has witnessed a surge in the number of luxury brands like Mercedes-Benz, Jaguar Land Rover and BMW, among others, that have come to dominate Indian consumers’ minds and preferences.
While India has a long way to go to catch up to China, it is a major growth market for automakers, especially those that offer luxury models.
India is the second largest automobile market in the US, and China is third.
According the report, Indian car-buyers are more likely to choose cars from luxury brands than from the smaller brands, which is a trend that is expected to continue.
The average car in the India market is priced at Rs 9,700 (Rs 7,200 for the smaller brand), while the luxury brand average is Rs 7 (Rs 6,600 for the luxury brands).