Changing phases of Indian car market

The transformation of the Indian market for passenger cars is remarkable. A few years ago you had a choice between three cars. Now the Indian car market has more than fifteen cars for the consumers. From a stage where the consumer had to wait for months to get a car, the market has turned in favor of the buyer. With new models and recession in the economy, manufacturers are doing everything to attract the consumers.

Earlier, the choice was between three cars. The Ambassador from Hindustan Motors was phased out from the European market before 1960. This car is still used by all the government agencies and you still find that most taxis are of this make. For the urban employed class it was Premier Padmini, a Fiat version of the same vintage. Then came Maruti a 798 cc from Maruti Suzuki, which became the most popular car in the country.

The opening up of the economy and liberalization attracted investments form different parts of the globe. The result was wide range of cars in the Indian market. The joint venture between Government of India and Susuki Motors of Japans produced Maruti 800 (798 cc), Omni E (796 cc), Maruti Zen (993 cc), Maruti 1000 (970 cc) and Maruti Esteem (1298 cc). Hindustan Motors offer Ambassador ISZ (1817 cc), Contessa GLX (1817 cc). Other than the older models like Premier Padmini (1366 cc) and Premier 118 NE, the market now has new cars, including Fiat Uno (999 cc (1171 cc), Daewoo Cielo (1498 cc), Peugeot 309 (1360 cc), Opel Astra (1597 cc), Ford Escort (1299 cc), Honda City (1343 cc), and Mercedes E220 (2199 cc).

New models scheduled to hit the Indian roads include Daewoo M100 (800 cc), Hyundai Atos (1000 cc), Mitsubishi Lancer (1468 cc), Daewoo Lanos (1349- 1598 cc), Daewoo Nubira (1598 cc-1998 cc). Daewoo Laganza (2000 cc - 2200 cc) and Hyundai Accent (1341 cc). The telco part of the Tata group of companies is introducing a 1400-cc car acclaimed as India's first indigenously-developed passenger vehicle.

Though the consumer are happy about the variety of cars available, the manufacturers are worried. The drop in the demand and the inventory pile-up in most of the production units are hitting the bottom line. Though all players claim that they are not in the market for short term gains, they admit that the present condition is far from attractive.

The country is showing signs of a recession and sales of all types of vehicles have come down. According to Economists Intelligence Unit (EIU) affiliated with The Economist, auto sales in India and seven other Asian economies are expected to drop 29.2 per cent to 3.83 million vehicles in 1998 - a decline expected to bring to naught the sales growth of the past six years. The EIU also predicts that the auto sales in the region will not recover to the 1996 level until 2001.

Go To Page: 1 2

Articles in this Topic    Discussions in this Topic