Friday, January 1, 2010

Big plans for the small car

From the time when the Maruti 800 put Indian women in the driver's seat, to the more recent Nano, which put the car within common man's reach, the Indian small car segment has seen a lot of action. But nothing can hold a candle to what 2010 has in store.

To begin with, the segment is heading for a complete makeover. It's time to start thinking international as several global auto giants are planning to launch their small cars in the country next year. Japanese car maker Nissan is way ahead in the race and is reportedly planning to start trial production of its small car as early as this November. Ford Motors' Figo is slated to be launched next year. Toyota is busy setting up a small car plant for its offering that is targeted to hit the showrooms by the end of 2010. And the German Volkswagen is making India-specific alterations to its small car, Polo.

The reason all these automakers are queuing up is the potential of the Indian auto market. A little over 88,000 passenger cars were sold in September 2009 alone. "It is an untapped market. Automobile markets in the US, Europe and Japan are near stagnation. On the other hand, in India, the car and two-wheeler penetration level is at its lowest. This will result in a shift of new capacities and flow of capital to the cost-competitive Indian car market, states research firm Kredent.

Also, considering that 73% of the cars sold in India are small cars, driven by price sensitivity, Justify Fullpundits expect most of the new launches to be competitively priced, at around Rs 3 lakh for the base model. For instance, Ford is expected to price the Figo just below the Rs 4 lakh and Nissan's car is expected to follow suit.

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