It’s probably little surprise given the economy and cares about gas-guzzling carbon emitting big cars, but small cars drew most of the attention Tuesday at the Indian auto show as carmakers, including those from the European Union, tried to get a foothold in the world’s largest compact-car market, where they face tough competition from Indian companies such as Tata. The weeklong AutoExpo 2010 in New Delhi showcases releases of small cars designed for the Indian market, whose sales were expected to grow 15% to 1.6 million vehicles by the end of the financial year in March. The small-car segment accounts for almost 75% of the cars sold in India, where more people are buying cars on the back of sustained economic growth.
Major global carmakers such as US giants Ford and General Motors, Germany’s Volkswagen, South Korea’s Hyundai, and France’s Renault are competing for a share of the Indian auto pie as their traditional markets in the developed world have yet to recover from the global recession. India recently overtook Japan as the largest market for compact and sub-compact cars, selling nearly 892,000 units last year, surpassing the 708,000 units forecast for Japan, according to the marketing information firm JD Power and Associates.
Most companies have lined up small, affordable cars to sell to the Indian masses and are investing hundreds of millions of dollars, which is transforming the world’s second most populous country into a hub of small-car manufacturing.
Volkswagen also introduced its Polo, saying the model’s March release would mark the company’s entry into India’s compact car segment. GM has already unveiled its $7,000 Beat, which it intends to sell worldwide. The race is on to upstage the Indian-Japanese alliance Maruti Suzuki India, which holds a 55% share in India and has a strong record in the small-car segment. Renault and its Japanese partner, Nissan, are also aiming to launch a low-cost car in 2012.
Fiat said it unveil a small car by 2012 in India, where small cars make up about 75% of all sales in the industry, a senior company official said. “There is a lot of space in that segment and the opportunity in it will be exploited,” Rajeev Kapoor, President and Chief Executive of Fiat India Automobiles, told reporters at the New Delhi auto show. Kapoor said Fiat would develop the small car overseas and position it below the Palio and Grande Punto compact cars it already sells in India, according to Reuters. Fiat said it aims to launch three variants of its existing models this year and a car that can use multiple fuels, and expects its India sales to double in 2010 from 23,000 units sold in 2009, he said.