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Dreams off the assembly line

The interest in India's car market has been obsessive. The latest Auto-Expo in New Delhi, Asia's largest exposition and a trendsetting event, proves the point. By the time it ends, more than a million visitors would have visited the auto show. That is one explanation why the auto market has grown by 26.35 per cent in the first nine months of the current fiscal, with sales touching 6,26,510 units.

india Updated: Jan 18, 2004 22:01 IST

The interest in India's car market has been obsessive. The latest Auto-Expo in New Delhi, Asia's largest exposition and a trendsetting event, proves the point. By the time it ends, more than a million visitors would have visited the auto show.

That is one explanation why the auto market has grown by 26.35 per cent in the first nine months of the current fiscal, with sales touching 6,26,510 units. The figures may overwhelm you but they also capture the mood of the market. As many as 89,687 ‘Made in India’ cars made their presence felt in global markets. Commercial vehicle sales rose by over 40 per cent, and the scooter industry, that saw negative growth in the last four years, was positive.

Riding on the wave is the automotive components industry that could post $1 billion in expports this year. “We will be able to export components worth $2.5 billion in the next few years," says Automotive Components Manufacturers Association (ACMA) trade fairs chairman D.K. Jain.

With such a confident market scenario, Bentley, the UK-based niche car manufacturer, unveiled its Rs. 1.67 crore Continental last fortnight. The car is expected to hit the Indian roads by the middle of the year. Says Ian Gorsuch, Bentley's regional director: “We have confirmed bookings already for 15 Continental cars.” In fact, Bentley was encouraged to launch another vehicle, its Rs. 3 crore Arrange R.

But most launches have been in the upper segments. Many believe that the economic boom has encouraged new players to enter the premium segment. And there is proof of success. DaimlerChrysler, for instance, is happy the way things are turning out. It is already getting serious enquiries for its recently launched Maybach.

“The Indian market has changed dramatically in the past five years with buyers looking for technologically superior products,” says Suhas Kadlaskar, the company’s director. “We couldn’t imagine selling S class cars in India a few years ago. We sold 1,581 Mercedes cars in 2003, an increase of 30 per cent compared to 1,208 units in 2002.”

The company has made profits for the past four years. It realises that those who buy Mercedes Benz are international travellers and are aware of the latest models. Kadlaskar says DaimlerChrysler brings its models into India in less than a year after launch.

There is another reason why, save for a few, auto majors are bringing in high-end brands to India. Says Bipin Datar, Skoda’s general manager: “If we have to give something at the price of a hatchback, we won’t be able to do that.” Skoda prides itself for creating a separate segment at Rs 11 lakh. But now, with the Octavia Superb which is expected to be launched in March at a price of Rs 24 lakh, Skoda is also pitching itself against the Mercedes Benz.

Even Hyundai Motor India, a major player in the compact car segment, is planning to launch the Elantra that has a price tag of over Rs 9 lakh. Hyundai sees India emerging as a major facility for exporting small cars. “We are already exporting Santro Xing to Europe from India. We exported 30,000 completely built units in 2003 and hope to sell 70,000 units in 2004,” says Hyundai president B.V. R. Subbu.

The question is: Is the Indian market big enough to accommodate expensive cars? “It is not a question of market share, but mindshare,” says Rahul Bajaj, chairman, Bajaj Auto Ltd. “Exponential growth in the automobile industry over the next five years would be in scooters and cars with price tags of about Rs. 3 lakh,” he adds.

Maruti Udyog’s managing director Jagdish Khattar remains buoyant on the future of the Indian car industry. “The Indian car industry is looking to export one lakh cars this year. The potential is far greater and if we can increase volumes to global scales,” he says.

In overall terms, the industry believes that the luxury products unveiled recently will remains a low volume game. These cars are more important in building the brand image of the manufacturers.

(With Kuber Sharma)

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Concept Cars

Among the concept cars at this year’s auto show were Skoda’s Tudor Coupe, Hyundai’s HCD-6 and Maruti’s Concept S.

These cars are known crowd-pullers. They showcase future technologies of a company, says V. Sumantran of Tata Motors.

Maruti’s Jagdish Khattar believes that concept cars raise the aspirations of customers.

First Published: Jan 18, 2004 00:32 IST