India is poised to become the new global manufacturing hub for small cars with BRIC countries accounting for more than 40 per cent of the forecast growth in the global light vehicle assembly industry, according to PricewaterhouseCoopers.
PricewaterhouseCoopers (PwC) in its annual 'Global Automotive Financial Review,' has said the Indian automotive manufacturing sector is poised to grow with all major global vehicle manufacturers either having established or are in the process of establishing their presence in India
"Almost every major global vehicle manufacturer is establishing assembly facilities there and companies are increasingly establishing design and research centres in India, in addition to its more established role as a low cost global sourcing destination," the report has said.
With a reduction in the rate of excise duty on the manufacture of small cars, (engines with a maximum displacement of 1,200 cc and an overall length under four metres) India is seen as a new global manufacturing hub for small cars, it said.
The global consultancy firm has further said that BRIC (Brazil, Russia, India, China) will represent 52 per cent of the industry's forecast global capacity expansion.
"These factors are reflected in the fact that nearly all major global automakers are pursuing a BRIC strategy in some form as they attempt to gain competitive advantage by tapping the potential of these emerging markets," the global consultancy firm said.
It said that massive structural changes will only heat up as the entire automotive value chain struggles to adapt to new market realities.
These include high raw material prices and razor-thin profit margins, which are emerging against a backdrop of intense increases in the level of global competition.
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