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Small cars make a big deal of India

Ford Motor Company, the iconic American carmaker, is on its way back from the brink of bankruptcy. Faced with such critical times, it decided to launch what many call its most eagerly awaited product in years, the small car Figo, at this year’s Delhi Auto Expo, which happens every other year in India, reports Suprotip Ghosh.

autos Updated: Dec 06, 2009 23:43 IST
Suprotip Ghosh

Ford Motor Company, the iconic American carmaker, is on its way back from the brink of bankruptcy. Faced with such critical times, it decided to launch what many call its most eagerly awaited product in years, the small car Figo, at this year’s Delhi Auto Expo, which happens every other year in India.

The same happened with A-Star. Maruti unveiled the concept version of what is now its hot product in Europe at the 2007 Delhi Auto Expo. That expo saw an even bigger launch, the Tata Nano. Skoda Auto India, a Volkswagen Group company, is working on a small car that it said will launch in India before most other countries, effectively making it a planned India launch.

More small cars will be launched either from India, or the India launch will be close to the global launch. Gone are the days when we would wistfully flip through foreign magazines and wait interminably for that cool car that was already being driven in the US or as close as Thailand.

“Our new Ford Figo shows how serious we are about India,” said Alan Mulally, global chief executive of Ford Motor Company, at the launch in New Delhi. “It reflects our commitment to compete with great products in all segments of this market.”

The Figo’s global launch in India is significant in many ways. First, the ‘small car’ used to be anathema for US carmakers. America was a country of big cars, selling up to half a lakh each a month of giant sports utility vehicles and pickup trucks like the Chevrolet Silverado. Those days are gone. In September 2008, the Silverado sold over 50,000 units. In September 2009, it sold below 20,000, a drop of more than 60 per cent.

Compare that to the A2 segment in India, which includes most small hatchbacks. In September 2008, India produced 96,485 of these. In September 2009, it produced 1,29,410, a growth of 34.12 per cent. In the same period, the top 10 pickup trucks in the US showed an opposite trend. In September 2008, they sold 1,51,263 units. In 2009, the figure was 96,005, a drop of 36 per cent, according to Autodata.

People who build brand images for cars, the ad agencies, feel that the trend of launching cars in India is gaining traction. “Where would you typically launch a product? In its largest market! And India is a really large market for small cars,” says Ayan Chakraborty, executive vice-president, Saatchi & Saatchi.

Nissan Motor Co, Japan’s third largest maker of cars and buses, has been open about its India plans with a new, low-cost platform targeted at the small-car market. However, Kiminobu Tokuyama, CEO, Nissan Motors India, says it will be a few years before global car models are regularly launched from India. “Our new small car will probably be launched from Thailand. But its India launch will be not too far behind,” Tokuyama says.

Luxury carmakers too feel India launches of global cars are subject to market conditions. “Our city car, the A1, is not slated for India at this moment. We are evaluating the market. However, the Audi Q7 SUV was launched with a facelift in India around the same time as in other markets,” says Benoit Tiers, MD, Audi India.