China buying Altis, we're buying Alto: Market expert on India's purchase woes

Manish Chokhani says from selling 2 million cars in 2010, India should have reached 12 million cars. He adds from 10 million bikes, India should have been selling 35 million bikes.He says India's scale-up was not on the lines of China because of depressed income levels and high interest rates.
| Updated on: 09 May 2020, 10:27 AM
Image used for representational purpose only. (AFP)
Image used for representational purpose only. (AFP)
Image used for representational purpose only. (AFP)
Image used for representational purpose only.

The Indian consumer has disappointed over the last 10 years as most segments should have grown 3-7 times but income levels have remained depressed.

This was stated by market expert Manish Chokhani at a webinar hosted by Axis Capital.

He said the Indian consumer has disappointed over the last 10 years, as India's purchasing power was destroyed due to high interest rates and low currency.

(Also read: Zero sales: Indian car makers have a month like never before)

Similar Cars

Find More Cars
Maruti Suzuki Alto (HT Auto photo)
Maruti Suzuki Alto
796 cc | Petrol | Manual | 22.05 kmpl
₹3.15 - 4.84 Lakhs**Ex-showroom price
Maruti Suzuki Alto K10 (HT Auto photo)
Maruti Suzuki Alto K10
998 cc | Petrol | Manual | 24.39 kmpl | 66 bhp
₹3.99 - 5.83 Lakhs**Ex-showroom price
Datsun Redi-go (HT Auto photo)
Datsun Redi-go
799 cc | Petrol | Manual | 20.71 kmpl
₹3.58 - 4.99 Lakhs**Ex-showroom price
Datsun Go (HT Auto photo)
Datsun Go
1198 cc | Petrol | Manual | 19.02 kmpl
₹3.99 - 6.56 Lakhs**Ex-showroom price
Hyundai Casper (HT Auto photo)
Hyundai Casper
999 cc | Petrol | Manual
₹4 - 7 Lakhs* *Expected Price

While the bull market of the last 10 years was broadly in consumer facing stocks, which saw significant multiple expansion, underlying consumption never really exploded, he added.

"Most segments should have grown 3-7x, but due to inadequacy of key enablers, income levels have remained depressed and narrow.

FOLLOW US:Stay Updated with latest content - Subscribe us on
FOLLOW US:Stay Updated with latest content - Subscribe us on

"From selling 2 million cars in 2010, we should have reached 12 million cars; from 10 million bikes, we should have been 35 million bikes; from a mortgage market of $ 88 billion, we should have reached to a market of $ 650 billion; and from selling 2.5 million aircons, we should have reached 18 million aircons," Chokhani said.

He said India should have achieved this if one goes by what happened in other markets during their scale-up, including China.

China went from the same car market size as India to 27 million cars and their average price per car bought is three times the India's price per car bought. "So they are buying Toyota Altis, while we are buying Maruti Alto. It became a 30x larger market than India," Chokhani said.

He added that the era of globalisation has peaked. "Post Covid, the world isn't going to live in an optimised global supply chain with China being the world's factory churning out everything. These chains will move and will get a lot more near shore. The era of globalisation, supply chain optimisation, financial optimisation seems to have peaked for now.

"The labour intensive type of jobs which China took away from the world and the scale at which countries would need that labor, potentially it is India which could benefit."

He added that India needs to move away from focusing mainly on what happens to those in the bottom of the pyramid to thinking about the entire stack as to what happens to the entire country. The fundamental thought has to be to reflate balance sheets which are wiped out by either bringing in fresh equity or allowing businesses to make more profit. Healthy businesses can ensure healthy job creation, Chokhani said.

"Going forward, India is on the way to be a lower levered country and lower levered entrepreneurial class. We are in a position where both banks and businesses are turning risk averse with low tolerance for credit risk. The government needs to plan and allow the profit cycle to come back magnificently," he added.

First Published Date: 08 May 2020, 08:59 AM IST
Recommended For You
View All

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city