An auto hub!
December 5, 2007
One would hardly have associated India with hot manufacturing activity, least so in the automobile sector. But in 2007, India increasingly emerged as a production and sales hub for major car manufacturers, with international giants like Honda, Toyota and Volkswagen pulling out their drawing boards for an all-new India-specific car model.
The primary reason that manufacturers have opted for a new car model for India is to make use of low cost manufacturing expertise and also to qualify for small car norms.
Globally, India is looked upon as a hub for small cars. Almost 87% of all cars owned in India are small economy cars, thanks to Maruti and Hyundai.
With Indians now flush with more disposable cash, overseas auto makers plan to introduce a host of new luxury cars into the country. This sudden spurt follows the lifting of many curbs on the auto sector by the government.
One of the first to announce plans was Honda Siel Car India, also the leading Japanese player in India. The idea of benefiting from the small car norms has attracted Toyota and Volkswagen too. Toyota, which had restricted itself to the mid-sized sedan market, has decided to foray into small cars by 2009. Sources say the company is developing a completely new car codenamed 800L at an undisclosed facility outside India and Japan.
Ford India is said to be working on a small car for the country, but its plans remain unclear. With a small car in its portfolio, it can target buyers on a much larger scale.
Volkswagen, owners of luxury brands like the Bentley, Lamborghini and Bugatti is also working on a small car for India.
The lure of emerging markets like India have forced global players to look for new models that complement market sentiment and at the same time fall within the affordable price bracket of $8,500 (about Rs 3.5 lakh).
Korean car maker Hyundai has just launched the i10 in India. The company intends to make India the production hub for the i10.
Triggered by the buoyant small car market, the companies want to increase their market share to about 10% by 2010 from the current 3 to 4%. Toyota, Honda and Volkswagen have forecasted optimistic growth post their small car launches in 2009.
Image: Tennis star Sania Mirza, Hyundai Getz's brand ambassador, poses with Hyundai India Managing Director H S Lheem, right, and Hyundai India Marketing and Sales Vice-President Arvind Saxenapose at the launch of the Hyundai Getz Prime in New Delhi. Photograph: Manpreet Romana/AFP/Getty Images