Bangalore: The Indian car market will see a bright future in 2012, according to a Deloitte report. This Deloitte research report ‘Driving through BRIC Markets – Lessons for Indian Car Manufacturers.' says despite the sluggish car sales this year, the coming year will see more car buyers and shows an optimistic graph.

According to Business Standard, Kumar Kandaswami, Sn.Director at Deloitte Touche Tohmatsu India, said, “The current slowdown is not here to stay as the fundamentals of car sales growth namely, urbanization and car density are still very attractive.” Kandaswami also added increasing Per Capita Disposable Income (PCDI) to the driving forces of increasing car sales in India. Kandaswami also quoted, “While the latter two have remained attractive, ‘real’ PCDI growth has slowed down in 2011 in context of persistently high inflation. If inflation were to be curbed or disposable income were to grow faster, India holds a higher chance than most of its BRIC counterparts to witness accelerated growth in car sale.” Despite a good hike in car sales in the past decade, it was only about 3.5 percent in 2011 because of moderate rise in real disposable income, increased rates of interest and prices of fuel.

According to MoneyControl.Com, 2011 has reported a marked reduction in car sales due to the prices of petrol being escalated by 34 percent since June, 2010. Also, car loans are currently available at an interest rate of 13 to 14 percent. The report also states that other BRIC (Brazil, Russia, India, China) Nations are also suffering with their car sales due to sluggish PCDI, resulting from high levels of inflation. 

Reserve Bank of India (RBI) intends to keep the inflation rate at 7 percent in 2012, which in turn will make car manufactures invest more in this sector. The Top 4 organizations, which make up about 80 percent of the sales of passenger cars were – Maruti Suzuki, Hyundai Motors, Tata Motors and Mahindra & Mahindra. Kandaswami added, “Increasing competition across vehicle segment is expected to lower the concentration levels. New players are quickly gaining market share and it is expected that the passenger car market will have five or more players making up for 80 per cent of the market in the upcoming years,” as quoted by ET.