TAKE A LOOK-What's happening in emerging car markets

India expects the automobile sector to double its share of gross domestic product to 10 percent and contribute $25 billion in export earnings in a decade, the trade minister said on Thursday.

Kamal Nath also said the government would consider incentives for exporters of cars and auto-part makers and keep policy favourable to help auto makers sustain high growth in output.

"We believe that the sector's contribution to GDP will double from its current 5 percent to 10 percent .... and exports should go up nine times," Nath told a business conference.

"By the middle of next decade, India should be the destination of choice for design and manufacture of automotive components and vehicles in the world."

India's booming auto sector has lured major companies to tap the domestic market, and many of them plan to make it an export hub to take advantage of low-cost labour and components.

Nath said Maruti Suzuki, India's biggest car maker, was planning to scale up its capacity to 1 million cars by 2010, Hyundai was looking at capacity of 600,000 cars by 2009 in the country and Toyota plans to scale up output to 200,000 units.

Demand for cars has been hit by rising interest rates, with the central bank raising its key lending rate to a seven-year high of 9 percent in July, and rising input costs have squeezed profit margins of auto makers.

"I believe this is a passing phase," Nath said.