India is one of the world's fast-growing automotive markets. Its domestic car sales touched a historical high of 14.82 million units, representing a YoY increase of 30.9 percent in 2010. Growth in 2011 is projected to reach 15-18 percent. Two wheelers and three wheelers hold the highest market share in India where small passenger cars are now gaining greater popularity thanks to energy-saving technology and a narrower gap between the prices of small passenger cars and their two-wheeled counterparts. Small ‘green' vehicles have lately received higher demand in light of the Indian government's cancellation of oil price subsidies.
Our exports of vehicles and parts to India in 2010 were worth a total of USD523 million, growing 58.8 percent over 2009. Thailand was India's sixth largest exporter of this product category. Thai OEM products with high potential in India's market include propulsion system components, engines, transmission shafts and crankshafts, as well as other high-tech parts. For OEM manufacturers, shipment of OEM parts may be subject to market plan of their parent companies. However, replacement equipment manufacturers (REM) are quite independent in their production plan and policies. Auto spare parts with promising trends include metal parts formed by casting and forging, as well as other parts/accessories, e.g., mirrors, electrical equipment for ignitions system, lighting or signaling, car keys, etc.
In addition, bright prospects seem to lie ahead for investments into the Indian auto part industry, especially with India's liberalization of their automotive industry. However, attention should be paid to intense competition from Indian SMEs, which are numerous and larger than Thai counterparts. Businesspersons should also take note of high quality standards of Indian auto production, operating costs which may vary in different regions, as well as other restrictions related to operational and financial procedures.