An analysis by Canada's Bank of Nova Scotia has estimated that 24 million Indian households will be able to afford a new car by 2007.
The Indian car market will see a seven per cent growth for 2006, the analysis said.
After a whopping 29 per cent expansion in 2004, sales growth in India slowed to seven per cent in 2005 as stringent emission standards were put in place and fuel costs and interest rates rose.
Household income in India, which had only about seven million private cars in 2004, is advancing at a two-digit pace, it added.
Car sales will stall in most rich countries in 2006 while ongoing double-digit percentage growth in China will lead a surge in developing countries, according to the analysis.
Volumes will be weaker in North America and flat in Western Europe and Japan, but India, Mexico and Brazil will join China as high-performance markets, it said.
The analysis estimates that global sales growth will slow to one per cent, from an estimated two per cent in 2005.
China has been the fastest-growing vehicle market in 2005, with an estimated growth of 18 per cent to 2.7 million units, and is likely to challenge Germany as the third largest national car market.
