While Maruti Suzuki India, countrys largest passenger car manufacturer with over 50% market share, has taken a lead in terms of new cars with A-Star launched in November last year followed by Ritz in May and Estilo in August, entry of new players into the compact car category with an eye on both domestic and overseas markets is a sign of an emergence of a trend that is here to stay for long. The demand for small cars is a long-term sustainable phenomenon, which will only grow in the foreseeable future due to the increasing fuel cost and emergence of large number of new customers in BRICs, Stephen RDArcy, Global Head, Automotive Practices, PricewaterhouseCoopers shares.
DArcy points out how the growing concerns over green house gases and consequently new government policies like the scrappage scheme in Europe will further boost the demand for compact cars across the globe. Nearly 75% of the total vehicles sold in the US earlier were bigger cars and trucks, now 40% of the US population is moving towards more fuel efficient cars and this has forced players like Ford Motors to think of introducing its small car Fiesta into the US market for the first time, he adds.
Honda Siel Cars India forayed into the compact car segment in India for the first time with its premium high-end compact car, the Jazz which will be complimented by another new small car from Honda in two years time from the companys upcoming plant in Rajasthan.
The launch of Tata Nano in July created an all new segment priced lower than the earstwhile cheapest car, the Maruti 800. On the other hand, the launch of Fiat 500 has created the priciest segment in the compact car category with the car being priced at around Rs 15 lakh.
And this is just the beginning. Other new launches in the category include i20 from Hyundai Motor India and the Grande Punto from Fiat India. Last month, Ford India unveiled its all new small car, Figo, which would be launched in the first quarter of 2010 and General Motors India is already doing trials on its mini car, which is scheduled for a launch towards the end of this year.
Joining the party will be Toyotas small car, scheduled for launch towards the end of next year and the ultra low cost car, being developed by Bajaj Auto in association with Renault and Nissan, which will surely spoil the Indian car buyers who were never offered with so many choices in one category, be it in terms of new models or the price range of the vehicles available in the compact car segment.
With small cars driving the growth of Indian car industry, the company hopes to triple its sales in India in the next three years on the back of our upcoming small car for the domestic market,says Hiroshi Nakagawa, Managing Director, Toyota Kirloskar Motors.
This entire buzz is not without a reason. After all, the compact car segment is the largest selling segment inIndiacontributing nearly 80% to the total passenger cars sold in the country. According to the Society of Indian Automobile Manufacturers (Siam), 96,774 units of small