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Car Market In India
Not very long ago, the
only cars that were available in India were the Ambassador and the Premier
Padmini. The Ambassador is a replica of the Morris Oxford – an old British
car, while the Premier Padmini was a Fiat 1100 assembled in India.
All that was in pre-liberalisation India, which existed before 1991, when
the first liberalization measures were announced. Earlier, the production
of the Maruti Suzuki 800 hatchback car in 1983 – a joint venture between
Government of India and Suzuki Motors of Japan, paved the way for a
renaissance in the Indian automobile sector.
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Post liberalization, India is on every car manufacturer’s map. The reasons
are not hard to notice. Currently, India is the second largest two-wheeler
market and the fourth largest commercial vehicle market in the world. Not
only it is the eleventh largest passenger car market globally, but it is
also expected to be the seventh largest by 2016. Post liberalization, many
foreign manufacturers have lined up and have setup base in India. Other
domestic manufacturers have also improved production levels and are in the
race for producing better models as well.
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Some of the car
manufacturers who have set up base in India are Audi, BMW,
Chevrolet Fiat, Ford, Honda, Hyundai, Mahindra, Maruti, Mercedes,
Mitsubishi, Skoda, Suzuki, Tata, Toyota, Volkswagen, and Volvo.
India’s economic growth is booming currently. These manufacturers have
set up manufacturing facilities in India, or are importing cars and
spares to meet the demands of this growing market.
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For example, companies
like Ford are planning to make India a regional hub for exports of both
small cars as well as engines. According to Mr. Michael Boneham, President
Designate for Ford India, the company plans to export the small car and
the engine for markets abroad. He indicated that one of the markets would
be chiefly Ford Asia Pacific Region while other markets are under
consideration presently. |
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There are many reasons for the impressive growth of the Indian car
industry. Some of these are comparatively easy availability of vehicle
finance, attractive rates of interest, and convenient installments.
Competition has forced manufacturers to be innovative and responsive to
customer demands and needs. Now that India is not alien to quality and
perfection, customer expectations have soared to higher levels. Depending
upon customers needs, four segments - small, midsize, premium and sports
utility vehicles currently represent the car market in the country.
A niche concept cars segment is also emerging wherein reputed re-modelers
like DC Chhabria cater to individuals who wish to remodel their vehicles
to create concept cars for their use. Contrarily, a segment is also
emerging comprising of people who wish to upgrade to cars from two
wheelers. Tata already is in the process of launching the small car Nano
to suit this segment’s needs. Many other car manufacturers such as Bajaj
Auto are also following suit and are in the process of coming up with
their specific versions to cater to this segment.
Currently, there is high demand for cars across all these segments.
With the growing economy, people left with a lot of disposable income
spend it towards meeting their mobility needs such as cars. Banks
and other financial institutions have an assortment of vehicle loan
schemes with attractive rates of interest and convenient installments.
These schemes encourage people to go in for loans to purchase cars
of their choice. Additionally, a convenient union budget in the
current financial year (2008-09) has worked in favour of the automobile
sector, which has seen an uptrend in sales across various segments.
The latest trend of new cars on Indian road has led to the emergence of an
entirely new market in second hand cars too. Many entrepreneurial and
professional dealerships have sprung up in many cities in India dealing in
second hand cars.
The growth of the second hand market is not surprising. The new
car market has grown at an incredible pace in India. As mentioned,
loans are easily available in the country for purchase of new cars.
Moreover, many people are now upwardly mobile. Therefore, people
who were earlier part of the small car segment now have moved over
to the premium car segment, and those in this segment have moved
over to the luxury car segment. Therefore, the trend is to get rid
of the cars that defined them as part of the earlier segments and
buy cars that identify them with the newer segments. Apparently,
the desire for newer cars and models is yet another reason. People
get attracted by newer models, which prompt them to acquire them.
This makes them sell their current cars for reasonable resale values.
This phenomenon benefits those who want to buy cars, but are not able to
afford new ones. Many companies like Maruti Suzuki (Maruti True Value)
have also established resale showrooms where people can purchase genuine,
good condition, second hand cars at reasonable prices.
With the emergence of favorable trends in the automobile sector in India,
what remains to be seen is how these developments will go a long way to
transform the mobility needs of the ordinary Indian.
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dipali.parikh@infibeam.net |
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