MUMBAI/NEW DELHI: India’s automobile industry is set to follow the nation’s economy this year, in outpacing the entire world in growth.In an otherwise gloomy global automotive spectrum, brokerage firms Nomura, Credit Suisse and automotive forecasting firm IHS Automotive see India as a bright spot.They predict growth in the nation’s passenger vehicle market, which expanded 7.7% in 2015, to break into double digits in 2016.In 2015, India outgrew Brazil to become the fifth-largest auto market. Japan-based broker Nomura, in a report on the auto industry, projected India’s market to expand 15.6% in 2016, far swifter than the estimated global growth of 3.2% and emerging market growth of 4.5%.Credit Suisse expects the car market in India to expand as much as 20%, outpacing China, where growth is expected to improve to 15% this year because of new tax incentives.According to IHS Automotive, production of light vehicles both passenger and commercial vehicles — is set to increase 9% in 2016 and domestic sales by 11%, which will be the fastest among the top seven passenger vehicle markets in the world.Automakers sold 2.77 million passenger vehicles in the domestic market last year. While the growth was driven by a small bunch of companies such as Maruti Suzuki and Hyundai Motor, experts predict a more inclusive growth this year, helped by new models, attractive discounts, cuts in interest rates and falling fuel prices.Improved consumer sentiment in an economy growing at the fastest pace globally and the upcoming salary hikes to government employees as recommended by the 7th Pay Commission, too, are favourable factors.“The GDP growth of 7.5% in India is among the fastest in the world and it is clearly reflecting in the (auto industry) numbers,” Young Key Koo, chief executive of Hyundai Motor India, told ET.“At 15.5% growth, for Hyundai, India was the fastest growing market in the world on a decent base, helping us (Indian unit) break into the top three overseas bases ahead of Europe. I expect India to keep pace and grow at 7-8% minimum in 2016, and stay ahead of the EU this year too.”In the coming years, implementation of the goods and services tax could be another growth trigger for the passenger car industry.The standard revenue neutral rate (RNR) recommended under GST is 17-18%, while total taxation on a small car now works out to nearly 29%. Hence, at the suggested standard RNR, there could be an over 10% reduction in taxes, with it reflecting on the prices.Cost of vehicle ownership is a culmination of factors such as fuel cost, ex-showroom price (where excise duty is the key determinant) and prevailing interest rates.If all these factors are favourable, it usually leads to a perk up in demand. Historically, it has been witnessed – in fiscal years 2004, 2007 and 2010 – that when the cost of ownership declined, the growth in car sales jump to over 20%.While industry experts like IHS Automotive senior analyst Gaurav Vangaal expect the Indian market to continue posting double-digit growth in the short term, a potential damper could be a clampdown on diesel vehicles, along with ad hoc change in regulations, over air pollution.Meanwhile, given the volume and operating margin growth poised to be best in the world, brokerages are recommending bets on carmakers with Asian market exposure.