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Small cars to lead India to glory
Ever wondered that India would one day take a lead in automotive world! That is when automobiles are still considered unaffordable by many in India. But that is exactly what the world feels about Indian automobile.
At recently concluded Auto Conclave conference, organized by Society of Indian Automobile Manufacturers (SIAM), in New Delhi, many automobile leaders hailed India for its lead in manufacturing small cars. As all the participants agreed that the future of automobiles is going to be small cars, they all noted that India will take the lead in many manufacturing small cars.
The Chief Executive Officer Asia-Pacific, a global consultancy giant Booz and Co, Mr Steven Veldhoen said “India will grow as a strong player in the small car segment.” He was backed by the Executive Vice-President of German Automotive components maker Continental, Mr M Eisenhard said that India will be in the forefront of Brazil, Russia, India and China(BRIC) – nations, as India has a strong association with small car segment.
The reason-emphasis will be on fuel efficiency rather than big–bigger cars. India’s unique distinction of being a major small car consumer with high fuel efficiency ratings has made the world take it seriously. The country has successfully demonstrated the feasibility of electric cars in Revai cars.
Talking about it, the Chief Executive Officer (CEO) of luxury car manufacturer Mercedes-Benz, Mr Rainer Schmueckle, said that the automobiles will have find non-fossil sources of energy in the coming years. Finding the best sources of energy will be the biggest challenge”.
The BRIC countries have the highest growth rate in the world and automobile sector will be major gainer during this development. The conference did not miss out on Tata Motors Nano car.
The well attended conference included the who’s who of the Indian automobile world and special invitees from the world. The meet is expected to give a new direction to the passenger car market in India. The international car manufacturers are keenly watching India, which has steadfastly held on to it small car segment. It has come up with remarkable cars of small sizes like the Maruti 800, Maruti Suzuki Swift, and Chevrolet Spark, Hyundai i10, compact sedan Ford Ikon and others.
The conference is only a hint at what follows in the next couple of years. After Tata Motors rolls out wonder car Nano, other launches too are also scheduled. Mercedes is set to bring in its small car A-class, Fiat is developing a cheaper car for the Indian market, while Ford is doing the same and plans to launch in 2010. Toyota is planning to manufacturing small car in India.
Taking a cue from India, China- a big car market- is now selling more number of smaller cars thanks to lower taxes and levy of surcharge on petrol cars. China is consciously moving to small car segment.
Tata Motors, which plans to launch the world’s smallest car Nano next month, is targeting the emerging dominance of low-cost small cars in the Indian and other global markets. “The small car is here to stay. Even globally, demand for small cars would go up due to rising fuel costs. There will be growing requirement of low-cost small cars, but different geographies will have their own demand,” Tata Motors chairman Ratan Tata said.
According to President of SAIC-GM-Wuling Company in China, Mr Shen Yang said “There has been a major shift in sales towards small cars. The 1-liter cars are in huge demand and they are expected to rule the sales graphs for the next five years.”
Even US, who, is now being considered a flat market for cars, is moving towards small cars. India stands to gain as Ford, General Motors, Volkswagen, Hyundai, Nissan have all invested thousands of crore in setting up manufacturing units. More investments are likely to follow. In fact, Ford alone has invested Rs 2,000 crore in India. Most of them are scheduled to become operational in 2010 or 2011.
As pressure on manufacturers’ increases to show more profits, they are forced to show higher volumes of sales. Incidentally, the high volume is generated in small car segment, as the world loves small cars. India is huge a market in this segment as 85 percent of the cars sold are small cars. Only China is ahead of India in these terms, and the two countries are going to be decision makers in the world. But China’s reputation for pirating all foreign made goods may go against it, for big players would like to keep their exclusivity. This is where India can score above China. In fact India will have bypassed several eras’ of car manufacturing and will directly jump to the forefront of automotive world.
