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The Indian market, gearing up for growth in the automotive sector

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The Indian market, gearing up for growth in the automotive sector

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With GDP growth in Europe struggling to reach 1% the Indian economy is storming ahead and gearing up for GDP growth of between 6 – 7% in 2013/14. This is attracting strong levels of Foreign Direct Investment (FDI) and India is now the second most preferred FDI destination in the World, competing closely with China.

Indians consumers were one of the most confident consumers globally in the fourth quarter of 2012 ( Nielsen study )driven by higher disposable incomes, a rising middle class, government support and a reduced Govt. fiscal deficit.

The automotive sector is now regarded as one of the key sunrise sectors in the market having grown to be the 2nd fastest growing automotive sector in the world. The market has the largest 3 wheeler market in the world, the second largest two wheeler market and the fourth largest passenger vehicle market in Asia.

The current market growth is leading to rising demand for automotive components and services and also an increased mix of vehicles including high end luxury vehicles. The market is keen to embrace new technology and many of the Indian automotive companies are actively looking for global partners for business development. Witness the example set by TATA and their global growth plans with Jaguar LandRover.

To gain access to the Indian market requires a clear understanding of the market potential and also a clear strategy to move this forward. High import duties do exist on many products and this can prove to be a barrier to some direct imports, however there are many routes to market with one of them being the formation of a partnership or JV with an Indian company. This move can minimise the problems significantly and open up channels into this growing market, especially for high tech/luxury products which are driven by strong market demand.

TMG Advisory are an Indian market entry specialist company and can provide you with detailed market support, strategy and assistance to help you enter the rapidly growing Indian market. For further details contact Les Parfitt on email, lparfitt@tmgadvisory.com or mobile 07989 973284.

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