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: The year 2008 was indeed a spectacular year, in more ways than one, in the history of Indian automobile industry. Whereas new car launches, not to mention the buzz around Nano, kept the industry and car enthusiasts in high spirits, high interest rates, pull out of some financial institutions from vehicle loans, and the consequent shortage of funds, spoiled the party and restricted the industry’s growth.
According to the Society of Indian Automobile Manufacturers, the industry registe-red a cumulative growth of 2.47% for April-November at 66,25,988 units against 64,66,010 units a year ago. November saw the biggest decline of 19.4% in passenger car sales at 83,059 units compared to 1,03,031 units in the same month last year. This is indeed dismal when compared to the earlier growth projections of 8-10% for the industry.
While Nano, the world’s cheapest car unveiled by its visionary patron Ratan Tata at the auto expo in January, took the world by surprise, the Honda Civic hybrid also created a mark by being the country’s first hybrid car. All through the year, there were new models on road like the Chevrolet Captiva, the eighth-generation Honda City, Toyota Corolla Altis, Mitsubishi Outlander and the recently launched Maruti Suzuki A-Star, apart from variants of many models. But the story does not end here. Hyundai Motor India is all set to launch i20 towards the end of this year that will replace the company’s Getz in the European market.
Both A-Star and the i20 are export-driven models, but the fact that they would be made solely in India for other countries underlines the importance of India as a hub for the export of small cars. Renault and Nissan have joined hands with Bajaj Auto to develop a small car and even General Motors India is working on a car smaller than the Spark.
All this is not without a reason. As part of the Automotive Mission plan 2006-16, the government of India has set a target of promoting India as the hub of small car. Towards that, there has been series of reduction in excise duty on small cars. While in 2006 the Centre reduced the excise duty on smaller cars from 24% to 16%, in February 2008 this was further brought down to 12%, making these cars more cheap and affordable to the common man. Three weeks ago, government had reduced the excise duty on cars by 4%, prompting carmakers to bring...
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