Consumers in the world’s fastest-growing major economy are kicking into gear, buying more cars and helping India’s auto industry shatter sales records.
More than three million cars were sold last year in India, a 6.4% increase over 2014, according to Euromonitor. Sales are expected to grow by 4.7% in 2016 as buyers are encouraged by lower fuel prices and reduced interest rates.
“There is ample headroom for growth,” said Anil Sharma, principal analyst at IHS Automotive. “Automakers that invested five years ago are reaping the benefits now.”
The rampant optimism is a marked departure from just a few years ago, when a weaker economy put the auto industry into a tailspin. Sales declined in 2013, and were flat in 2014.
But India’s economy is now in a sweet spot. China is slowing, and other major emerging markets such as Brazil and Russia have slumped. Prime Minister Narendra Modi, meanwhile, has made the economy a top priority, and India is pegged to grow by more than 7% this year.