BETHESDA, Md. – With a booming middle class, a fast-growing young population, strong investment and government interest in a well-developed automotive industry, India is poised to be a very important market for U.S. automotive aftermarket suppliers. The Economic Times reports that by 2015, the India aftermarket industry could grow to around $9.4 billion. This follows a 2012 base of $3.7 billion with annual sector growth at around 10 to 12 percent. Except for China, this growth leads the world. 
Most global OEMs view India as a strategic market of the future, and their investment has followed. Ford alone has committed some $2 billion in investment, and plans to almost double their dealer network from 274 to 500 by mid-decade. In 2012, India produced 20 million vehicles, making its passenger car and commercial vehicle manufacturing industry the sixth largest in the world. Yet, the rate of motor vehicle ownership per capita is low, ranking 157th in the world. This points to the capacity for growth, particularly considering the rapid urbanization – 140 more residents in urban centers by 2020, and 700 million more by 2050. As disposable incomes rise among this base, the forecast for growth in motor vehicle ownership is optimistic. Indeed, vehicle sales are fast breaking the ‘metro’ boundary and penetrating Tier 1 and Tier 2 towns as well as rural India, according to the Confederation of Indian Industry.
The Indian auto components sector has been recording an average annual growth of more than 20 percent in the past few years. A McKinsey study reports the auto components industry sector has the potential to reach $40 billion by 2016. Technology-focused products for the OEM segment offer best prospects in the Indian auto components sector. These include gears and components, clutch components, brakes and components, valves, axles, shafts, engine parts, electrical components, suspension, and body building parts. Indian agents and distributors actively seek opportunities to market U.S. technologies in the domestic market.
The India automotive industry is going through a rapid evolution in terms of shorter product life cycles, new customer segments and greater demands from customers with greater affluence, who want more product choices. U.S. firms successfully compete in the maturing Indian automotive industry, especially in the automotive aftermarket, green technologies and automotive components and accessories space.
Distance, unclear business practices, confusion over standards or consumer preferences may deter some U.S. auto care providers intrigued by potential in the India market. Fortunately, the U.S. Commercial Service via their seven offices in India, plus a network of American Business Corners, smooth the way for market entry. They offer business matchmaking, partner due diligence and strategic counseling, among other services, to help American businesses succeed in India.
To see first-hand the potential in the India market, to meet prospective distributors, to benefit from networking activities and commercial briefings, consider joining Automotive Trade Mission to India, April 2014, organized by the U.S. Commercial Service/U.S. Department of Commerce. This mission is designed for small and medium-sized U.S. businesses, traveling to three automotive commercial hubs in India: New
Delhi, Pune, and Chennai. It will generate market exposure and provide access difficult for businesses to arrange independently. More information on the mission and the India commercial market is available at http://export.gov/india/tradeevents/eg_in_066707.asp.
Learn more at export.gov/india.
