AUTOMOTIVE ASSEMBLY MARKET ANALYSIS

Market Concentration and Competitive Landscape

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Rising Demand in Developing Markets

Rising demand for vehicle from developing economies can drive the market growth. Countries like India, Brazil, Mexico, Indonesia and others are witnessing strong economic growth and improving income levels, thus, creating a burgeoning middle-class population. As disposable incomes rise, more people in these emerging markets now have the purchasing power to buy personal vehicles instead of relying on public transport.  Inadequate public infrastructure in such developing nations is also driving individual vehicle ownership. Automakers are making focused investments in these high growth regions to capitalize on the market opportunity. These are establishing local manufacturing plants as well as sourcing auto components from within the country to cater to the indigenous demand. Stringent local sourcing regulations in large developing markets like India encourage automotive assembly within the country. Moreover, automakers are rolling out more affordable entry-level models designed specifically for price-sensitive customers in emerging markets. If economic and infrastructure development continues at the current pace, rising vehicle demand from developing regions will remain a major driver propelling future growth of the global automotive assembly industry. For instance, according to the report published by Olx Crisil Mobility, following a remarkable 27% growth in FY23 with 3.9 million units sold, passenger vehicle (PV) sales in India are anticipated to increase at a more moderate pace of 6-8% in FY24,.  Growth rate of 5-7% compound annual growth rate (CAGR) is expected in 2024. India's PV sales continue to progress steadily, outpacing many other markets that are still struggling to recover to pre-pandemic levels. Car dispatches exceeded 300,000 units every month throughout the entirety of 2023, a first in the calendar year.