Ever since the invention of wheel, man has endeavoured to create different modes of transport to suit his needs. But, automobile takes perhaps pride of place amongst all his contraptions. Merely because it has evolved over the years from an article of extravagance to the one of necessity. And, nowhere has this evolution been more visible than in our very own backyard. Remember the days of the ubiquitous Ambassador and the Fiat, which dominated the country’s roads, at a time when the Indian consumer had little option. However, since then, liberalisation and the entry of competition, have brought about a sea change in the Indian automotive sector, which has evolved as a major player in the Asian context. A fact reflected in the emergence of India as the 18th largest global car market with a share of a mere 0.80 per cent. Hence, imagine the underlying potential that India possesses.

Keeping this in mind, it becomes imperative for the Indian players to try and understand what they are up against on a global platform, as exports could well hold the proverbial -- key -- in terms of survival. With this objective in mind, the following is a preliminary analysis of the global vehicle car park.

Starting from the time when Henry Ford rolled out his first vehicle to now, the world passenger car park has grown to accommodate an estimated 524 million vehicles. This figure, although a ballpark estimate, is undoubtedly growing every single day. What with automotive plants the world over spewing out mutants of a particular design almost on a minute-to-minute basis. Accuracy in such an exercise is just not possible, as new cars are registered globally everyday, while some are abandoned and others are scrapped due to old age and accidents.

All these problems mean that putting a number to the global car park is a complex issue. Even more difficult is perhaps understanding the dynamics of change in the global automobile industry. But despite the rapid pace of change and the inherent problems of statistics, it is very important for Indian auto manufacturers to understand the dynamics of the global marketplace and the competition therein.

A dozen companies dominate worldwide. Roughly, one car in seven on the world’s roads is currently produced on a General Motors (GM) platform. Putting GM’s Indian operations in perspective is the fact that this car maker manufactures a mere 60,000 vehicles in India, which is just a minuscule 0.075 per cent. There are estimated to be around 80 million such vehicles, including the Opel, Vauxhall and Saab variants from the GM stable.

Around one in eight cars is produced on the Ford/Mazda platform, which amounts to 67.1 million vehicles worldwide. Of this, Ford’s Indian operations are capable of producing mere 100,000 vehicles annually. One in 12 vehicles share a Toyota or Lexus label. While almost 41 million vehicles come from the Volkswagen, Skoda and Audi combine. Then, there are 30 to 33 million each of Nissan, Fiat and Peugeot-Citroen’s cars on global roads, as well as 25-26 million, respectively, of Honda and Renault models. So, in effect, the top eight automotive brands account for almost three in every four cars on world roads, with companies like Mitsubishi, Chrysler and Hyundai adding another seven per cent, leaving 20 per cent of world car park in the hands of miscellaneous car makers like Daewoo, Suzuki, Isuzu, Lotus and Maruti.

Having roughly understood the players that dominate the global passenger car market, it is now imperative that we define the largest car parks in the world and also understand their operational dynamics.

United States
The US is the largest passenger car market in the world and is said to contain almost 150 million cars. Historically, car sales in this market have been controlled by the Big Two, namely General Motors and Ford (excluding Mazda).

However, statistics now show that the share of other marques in the US market is on the rise. The fastest growth is in the Japanese brands, notably those of Toyota, Nissan and Honda, whose combined share on American roads was estimated to have increased to over 28 per cent in 1998. Most other brands surprisingly have smaller market shares in the US. A prime example of which is Volkswagen, which despite being the fourth largest manufacturer in the world, accounts for less than one vehicle in every 60 cars on American roads. Traditionally, upmarket brands like BMW and Mercedes Benz also account for less than a minuscule 1.3 per cent combined.

Western Europe
The so-called Big Six dominate the car park in Western Europe, accounting for almost three in every four cars on the region’s roads. Interestingly, Volkswagen and its affiliates, which control a huge 15.6 per cent of the European car park, have dominated this region over the last decade. Now, compare this 15.6 per cent of Volkswagen, which is the market leader, and the 80 per cent share of Maruti Udyog in India and what have you?

Coming back to Western Europe, Fiat is the second largest player there with 13.3 per cent of the total car pie. But analysts state that its share will fall as older Fiats are scrapped.

This aside, perhaps the other aspect that is truly interesting and specific to Europe, is the long “tail” of other carmakers. After the Big Six, BMW, the top three Japanese firms and Mercedes Benz account for a huge chunk of cars on European roads. Then, there are firms like Volvo, Mitsubishi, Mazda, Suzuki, Lada, Proton, Rover, Maruti and Tata, all vying for a piece of the action. For these companies, supplying dedicated parts and maintaining a regional service network is unlikely to be economically viable in the medium term.

Japan
The profile of the Japanese car park is very distinct from that of the US or Europe for several reasons. First, there are fewer imports due to policy restrictions, a la India! Secondly, there are very few older vehicles, mainly because of the draconian vehicle-testing regime, which results in many cars being replaced after a five-year period.

Furthermore, because of support to domestic industry, Toyota together with Daihatsu dominates the Japanese car park, accounting for almost 40 per cent of the market share. The other large manufacturers include Nissan and Honda, which together account for almost one third of the cars in use. Other manufacturers with a growing presence are Subaru and Suzuki, which have increased their sales significantly in the last few years, thanks to a number of innovative models and a growing popularity of mini cars. Does this trend resemble some other car markets?

Asia
Toyota, Nissan, Honda and Mitsubishi have dominated the markets of the ASEAN region for more than a decade now. In India, however, Suzuki, through Maruti Udyog completely dominated the car park with a solid 80 per cent market share until recently. Interestingly, the ASEAN and Indian markets are quite diverse compared to Japan, despite the similarity in vehicles. In India and Southeast Asia, vehicles have much longer lives (often more than 20 years) due to the testing regimes which are absolutely rudimentary, to say the least.

In China, commercial vehicles and not passenger cars surprisingly dominate the park and new vehicular sales. The market for passenger cars until now has been very small with a mere 3.5 million vehicles, and Volkswagen and Daihatsu dominate it.

The South Korean market with around 7.5 million vehicles is also unusual. Almost every car on Korean roads is designed and built locally and will perhaps spend its entire life on Korean roads due to policy restraints. Even more interesting is the fact that this scenario looks set to continue. This is despite the pressure to increase exports to South Korea, which is being resisted vehemently by local carmakers, despite the collapse of the local currency and the economic problems that plague the region.

Rest of the world
Finally, the statistics for the rest of the world are very varied. In Eastern Europe, there are still many old cars from the erstwhile Soviet era, even though most of the auto-manufacturers have been driven out of business. There is also a large number of cars imported and often stolen from Western Europe that find their way into east European markets.

Elsewhere, Africa has a small market that is dominated mainly by French and Japanese, and in some cases Italian made cars. However, the trend here is changing with players like Daewoo and Hyundai finding it easier to penetrate.

Lastly, there is the South American market that has been controlled by European and US producers. There are an estimated 23 million vehicles in this region, most of which have been manufactured in Brazil or Argentina.

This completes the list of the main passenger car markets of the world. But, with the economic uncertainties that plague some of the regions above, a fall in demand is the most likely scenario that will slow down the pace of growth in the interim. There are some interesting trends that have surfaced, which also need a mention, as these will play a big role in augmenting or decelerating demand.

International automotive trends