The rear mirror view is not flattering. Did automotive companies get it all wrong in India? Was their India entry strategy right? Did they err in not attacking the small car market earlier? They have taken 5 to 10 years to discover a gaping hole in their portfolio. Is it too late now to explore the small car market when every other company is looking at the small car to push their volumes and sustain growth in the Indian market? Ford has unveiled the Figo. General Motors has a small car and has also tied up with Reva for the small electric car. Toyota Motor Co, Honda has started work on their small car. Work is on for Bajaj?s small car. Volkswagen is racing ahead, so is Nissan. Not having a small car in the portfolio now looks suicidal.

It is the Nano Effect. Ever since Ratan Tata delivered the Nano, automotive makers have scratched their head and scurried back to their drawing boards to work out their small car strategy. They may not acknowledge it but it was a wake-up call for them. It only highlighted the fact that the Indian market was and will continue to be a small car market, with a 70% of the market share currently.

Passenger vehicle sales have grown from 7,07,198 units in 2002-03 to 15,51,880 in 2008-09 but if these carmakers had a small car strategy these numbers could have looked different. Considering the kind of volumes most of the players have in India, it may not be wrong to say that their choice of vehicles for the Indian market was not the best. They chose to focus on low hanging fruits and play it safe. Whatever was there in their portfolio was tweaked and launched in India.

Why did they fear to take this route? An explanation could be that they were totally intimidated by the volumes clocked by Maruti Suzuki when they entered India and thought is safe to be in segments where Maruti Suzuki did not have leadership.

Globally there is a now a shift expected towards the smaller car. Had these companies made efforts to have a small car for India, they would have been in a better position to grab this opportunity and ramp up. They could have benefited from this global shift in consumer preferences from fuel guzzlers to small cars.

?geeta.nair@expressindia.com