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Two-Wheeler Segment to Grow Fastest in the Indian Automotive Industry, Says Frost & Sullivan

SAN JOSE, Calif., June 3 -- The Indian automotive industry has been in a state of transition for a few years with the entry of international companies and new technologies significantly altering market dynamics.

The increased number of market participants is giving rise to excess capacities, particularly in the passenger car segment, and forcing price competition.

New analysis from Frost & Sullivan ( ), Forecast of the Indian Automotive Industry, reveals that the two-wheeler segment will be the fastest growing segment in the industry.

"The auto industry today is a buyer's market and the general economic slowdown makes it vital for industry participants to stay ahead of demand trends," says Frost & Sullivan Industry Analyst Abhijeet Dey.

Among personal transportation vehicles, the motorcycle segment will grow the fastest followed by passenger cars. Sales will receive boosts from cuts in excise duty, new model launches, higher disposable incomes, and a changing consumer mindset.

"While urban users shift away from economy range cars to higher 'B' segment cars, the former will be pushed into semi-urban and rural markets," says Dey.

The shift toward multi-axle vehicles is another positive trend. Multi- axles offer much better operating economics than the single-axle and their higher cost means higher revenues for truck manufacturers.

"Gradually a three-tier structure like in developed countries will be established," says Dey. "This structure consists of long-haul trucks on highways, medium commercial vehicles (MCV) for rounds of cities and towns and light commercial vehicles (LCV) to deliver goods to rural areas."

Increased private participation will offer near-bankrupt state transport corporations a chance to replace their aging fleets and invigorate the mass transport system. The demand for tractors will also rise as states build their rural infrastructure.

"Industry participants, especially component manufacturers, need to plan to optimize opportunities in this transitional market," says Dey.

Frost & Sullivan is a global leader in strategic growth consulting. This ongoing growth opportunity analysis also includes strategic insights on the Malaysian Automotive Vehicles Market and the Philippines Automotive Vehicles Market. Frost & Sullivan also offers custom growth consulting to a variety of national and international companies. Executive summaries and interviews are available to the press.