Much has been made of last week’s General Motors (NYSE: GM) IPO. But while everyone has been talking about GM, there is a car company that offers absolutely explosive growth that should be on your radar screen.

The high growth segment of the auto market that gets all the attention is China, as well it should. China overtook the United States as the world’s largest automobile market in 2009, with sales of 13.6 million cars, and is expected to purchase 100 million vehicles by 2020. However, many forecast that the automobile market in India will grow even faster than China’s in the years ahead. [“Forget China — This is Where You Should Invest”]

What’s so great about the auto market in India?

India is often mentioned as one of the fastest growing and most promising emerging market economies. Like China, India has grown strongly in the past decade and created a rising middle class. This Indian middle class is, by some accounts, 300 million people strong and the fastest growing segment of the Indian population. But, car sales lag behind not only most of the world, but other emerging market countries as well.

India currently has only about 12 cars per thousand people. Not only does this number pale in comparison to 842 cars per thousand people in the United States, but India is way behind other BRIC nations. Brazil, Russia and China have per capita penetration rates of 156, 213 and 128 cars per thousand, respectively.

Obviously, there is room for growth.

In fact, October car sales increased a whopping +38% year-over-year (to about 183,000). India’s GDP grew a remarkable +8.8% in the first half of 2010, and many forecast that level of growth to not only be sustainable, but to increase in the next few years. Also, India has been building out its highway infrastructure like crazy and is poised to handle an anticipated rapid increase in traffic.

So what’s the best way for investors to play the growth in the Indian car market?

Tata Motors Ltd. (NYSE: TTM) is India’s largest auto maker, producing buses, trucks, tractor-trailers, passenger cars, light commercial vehicles and utility vehicles. Tata also owns premium brands Jaguar and Land Rover. The company has a huge 60% market share of India’s commercial vehicles sales, but also sells all over the world, with significant operations in the U.K., South Korea, Thailand and Spain. Tata is currently the world’s fourth largest truck manufacturer and its second largest bus manufacturer.

How has the market treated this fast-growing car company?

The stock returned +281% in 2009 and is up more than +90% so far in 2010, compared to +34% and +9% for the S&P 500 during those time periods.

But while things look promising, the story isn’t perfect. The promise of India’s auto market has not been lost on the competition. Just about every major international auto manufacturer has set up shop in India, including Ford (NYSE: F), Toyota (NYSE: TM), Renault-Nissan, GM, Volkswagen and Honda (NYSE: HMC).

Competition will be fierce and it is highly unlikely that Tata will be able to maintain its 60% commercial vehicle market share going forward. That said, there seems to be more than enough business to go around for the foreseeable future. Sales at Tata surged +37% in the second quarter to 286 billion rupee ($6.2 billion) and profits increased by a factor of 100 to $502 million from last year’s quarter.

The company cited higher domestic volume and a turnaround in the Jaguar Land Rover unit, which it purchased from Ford in 2008 amidst a declining car market. These luxury brands are gaining significant share in the growing luxury markets of China and Russia, where sales of the cars are up +72% and +52%, respectively, on an annualized basis.

In India, sales of trucks and buses have skyrocketed +23% in the first half of 2010, compared with last year’s first half, and car sales shot up +36% in the second quarter. In the face of the strong results, Tata increased earnings estimates for 2011 by +37% from $2.82 per share to $3.87.

Tata isn’t simply content to enjoy the ride of India’s growing auto market, either. It’s a cutting edge innovator in fuel efficient vehicles and vehicles that meet demand for the current market. The company just launched the much anticipated Nano this year, a roughly $2,300 automobile that will be affordable to many middle class consumers not only in India, but in the rest of the emerging markets as well. This car has the potential to change the market for automobiles in emerging markets and could dramatically increase Tata’s market share around the world.

Action to Take –> Despite the recent stellar performance of the stock, Tata still sells for less than 10 times anticipated 2011 earnings. Tata is truly a fast-growing international automobile giant and can still be purchased at today’s prices.