Driving Through Bric Markets

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Submitted By ravigandhi1987
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Driving Through BRIC Markets Lessons for Indian Car Manufacturers
December 2011 www.deloitte.com\in

ons for Indian Car Manufacturers

Executive Summary Introduction Overview Brazil Russia India China Conclusion Appendix Sources Contacts 4 6 7 10 15 19 24 29 31 33 34

Executive Summary
The BRIC block has emerged as the economic power house of growth for the automotive industry through the last decade. What started as an exploration of new/extra markets for car sales in the early 90s has gone on to become the mainstream market of the new millennium. Supported by attractive macro-economic factors such as growing economic activity, urbanization, rising household incomes, developing credit markets and very low car density, the BRIC countries currently make up for the top 7 automotive markets globally. The BRIC block has been strongly growing for over 10 years; with 3 of 4 BRIC economies surging ahead even during the 2008 economic crisis. So that prompts us to ask how the dynamics have transformed over the years. What were the major drivers of growth in car sales in the last decade and into the future? Is the current slowdown a blip or is it here to stay? More importantly, what does the growth dynamics in China, Brazil and Russia mean to the Indian automotive market? We offer our perspective on the impact of macroeconomic factors on car sales in the BRIC block between 2001 and 2011. Below are the key findings of our analysis: 1. Car sales in Brazil, Russia, India and China grew at a CAGR of 8.8%, 5.7%, 14.5% and 34.3% respectively as against a globalcar sales average of 4.0% between 2001 and 2010. 2. In 2011, weak macro-economic conditions in Brazil and India resulted in the slowdown of car sales. On the other hand, China continued to exhibit attractive macro-economic conditions but sales were impacted by government measures. Russia sustained its…...

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