Automakers Hit Pay Dirt in Rural India

Rickshaws and bullock carts may be anachronisms elsewhere, but they are the standard means of transportation in rural India. But with government incentives and aggressive salesmanship by manufacturers, cars are making inroads into these untouched markets.

India is currently the 11th-largest passenger car market, and in the next five years it will become the seventh-largest, according to Ernst & Young. By 2030, the nation is expected to be the third-biggest after China and the United States. The country adds 1.5 million cars every year to its roads, and experts say sales could explode, a move that could greatly inflate India’s greenhouse gas emissions.

“India is an underpenetrated market,” said Kapil Arora, a partner in the automotive practice at Ernst & Young. “It has nine cars per 1,000 people. In the United States, there are about 800 cars per 1,000 people.”

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