Not very long ago, the only cars that were available in India were the Ambassador and the Premier Padmini. The Ambassador is a replica of the Morris Oxford – an old British car, while the Premier Padmini was a Fiat 1100 assembled in India.
All that was in pre-liberalisation India, which existed before 1991, when the first liberalization measures were announced. Earlier, the production of the Maruti Suzuki 800 hatchback car in 1983 – a joint venture between Government of India and Suzuki Motors of Japan, paved the way for a renaissance in the Indian automobile sector.
Post liberalization, India is on every car manufacturer’s map. The reasons are not hard to notice. Currently, India is the second largest two-wheeler market and the fourth largest commercial vehicle market in the world. Not only it is the eleventh largest passenger car market globally, but it is also expected to be the seventh largest by 2016.
Post liberalization, many foreign manufacturers have lined up and have setup base in India. Other domestic manufacturers have also improved production levels and are in the race for producing better models as well.
Some of the car manufacturers who have set up base in India are Audi, BMW, Chevrolet Fiat, Ford, Honda, Hyundai, Mahindra, Maruti, Mercedes, Mitsubishi, Skoda, Suzuki, Tata, Toyota, Volkswagen, and Volvo. India’s economic growth is booming currently. These manufacturers have set up manufacturing facilities in India, or are importing cars and spares to meet the demands of this growing market.
For example, companies like Ford are planning to make India a regional hub for exports of both small cars as well as engines. According to Mr. Michael Boneham, President Designate for Ford India, the company plans to export the small car and the engine for markets abroad. He indicated that one of the markets would be chiefly Ford Asia Pacific Region while other markets are under consideration presently.
There are many reasons for the impressive growth of the Indian car industry. Some of these are comparatively easy availability of vehicle finance, attractive rates of interest, and convenient installments.
Competition has forced manufacturers to be innovative and responsive to customer demands and needs. Now that India is not alien to quality and perfection, customer expectations have soared to higher levels. Depending upon customers needs, four segments - small, midsize, premium and sports utility vehicles currently represent the car market in the country.
A niche concept cars segment is also emerging wherein reputed re-modellers like DC Chhabria cater to individuals who wish to remodel their vehicles to create concept cars for their use. Contrarily, a segment is also emerging comprising of people who wish to upgrade to cars from two wheelers. Tata already is in the process of launching the small car Nano to suit this segment’s needs. Many other car manufacturers such as Bajaj Auto are also following suit and are in the process of coming up with their specific versions to cater to this segment.
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