The number of new cars in India is growing at a fast pace. It is due to the fast growing auto market of the country as well as due to the growing income of young urban Indians.
India as a country used to be under-developed till 1990. In the beginning of the 1990s the Indian government had to open the doors of the economy under the pressure of the International Monetary Fund.At that time the country had less than $1b foreign exchange reserve. When the doors of the economy were opened for foreign companies to come and do business in India, lots of economic activities began to take place. All major auto companies entered India with theope of catering to the huge under-exploited market for cars.
Soon, we saw car makers like Honda, Toyota, General Motors, Ford, BMW and Mercedes all starting to sell their cars in the country. Many companies also began to establish their manufacturing plants by investing heavily in the country. They were taking benefit of the cheap labor cost available here. Tax benefits of manufacturing cars locally also helped the auto companies.
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The economic activities had a very positive impact on the overall economy of the country. Soon, we had a strong middle class young Indians having lots of well-paid jobs available to them easily. These young people suddenly had lots of cash in their hands. So, they started to spend the money on expensive buys like cars and houses. These activities helped in the boom in both the auto industry and the real estate industry.
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Cars are still a luxury item for most people of the country. Only a small percentage of Indians own them. People traditionally associate ownership of cars with the social status of persons. It resulted in young executives working in cities buying cars in great numbers. Soon, roads of Indian cities were flooded with cars, resulting in frequent traffic jams.
Now all major car companies have presence and keep launching new cars in India. Both as the second fastest growing car market and as a big market for small cars, India has become a key market for auto firms.
Cars in India 