Carmakers enjoy a jolly ride despite cost worries

Surging sales forced major carmakers to raise capacity. Suzuki's planned to set up a new Rs 6,000 crore plant in India.

Low interest rates and higher income shrugged off rise in input costs, helping carmakers to sell a record one million cars while Maruti engaged itself in a war of words over arch-rival Tata Motors' plan to develop a Rs 1 lakh people's car.

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Surging sales forced almost all major carmakers to augment capacity and the Indian automobile industry had the distinction of attracting a whopping Rs 6,000 crore investment by Suzuki Motor Corp Of Japan to set up a new car manufacturing plant for its Indian arm Maruti Udyog Ltd.

Circa 2004 will remain deeply entrenched in the memory of Hyundai Motor India Ltd, India's second-biggest carmaker, as its compact car 'Santro' became the largest selling model at the fag end of the year, displacing Maruti's bread-and-butter model 'Maruti800' from its numero uno position.

The advent of the year revived hopes of re-launch of Daewoo Motors India's compact car 'Matiz' in a new avatar as the Indian arm of the world's biggest carmaker General Motors India began the due-diligence process to acquire the car assembly unit of the failed South Korean automaker.

Maruti was dogged by the speculation of phasing out 'Maruti800' as sales of the country's cheapest car started sliding after the Indian car market leader narrowed down the price gap between its compact car 'Alto' and 'Maruti800' to just Rs 24,000 but Maruti put the record straight by saying it would continue with car, which has "motorised" India.