The growing popularity of cars in India coupled with higher disposable income of the middle and upper-middle classes has made the country the largest market for some of the cars available globally. With new models hitting the market frequently and the fact that major automakers are keen to make India their hub for small cars, the phenomenon is expected to last for a while.

While Honda?s flagship model in India, the third-generation City, sells the highest here, Hyundai?s i10 has emerged the highest-selling model in the compact car category for the company in the very first year of its launch. Hyundai Motor India launched i10 in December 2008.

Although General Motors? hatchback, Spark, currently sells the most in China and India, constitutes the second-largest market for the vehicle, the company hopes that India will soon overtake China for sales of Spark. Maruti Suzuki India, which currently has three global models in its portfolio in India?Swift, SX4 and Ritz?may also join the bandwagon of these global auto majors soon as it gears up to expand capacity.

While Honda Siel Cars India sold 54,634 units of Honda City between November 2008 and December 2009, when the third-generation of the vehicle was launched in the country, vis-?-vis 40,903 units sold in the corresponding period in Thailand, Hyundai Motor India, which is country?s largest passenger car exporter and second largest car manufacturer, sold 1,37,564 units of i10 in the domestic market in 2009, against 1,35,000 units that were exported from India to Europe.

?Traditionally, Thailand has been the largest selling market for Honda City. In fact for the development of previous generations of Honda City, Thailand has been the lead country. But ever since we launched the third-generation Honda City, India has surpassed the sales in Thailand,? Jnaneswar Sen, senior general manager (marketing), Honda Siel Cars India, said.

Maruti Suzuki India has already overtaken its parent company, Suzuki Motor Corporation, in total production and sales last year. While Maruti manufactured a total of 9,66,399 units, Suzuki produced 9,08,302 units in 2009. Even Maruti?s total sales in 2009 were higher than the parent company at 967581 units.

?I won?t rule out the possibility of Spark and Beat becoming the highest-selling models in India very shortly, primarily because of low penetration levels and higher disposable income which means that more and more people are buying second cars for their family which in majority of cases is a small car,? Ankush Arora, vice-president (sales and marketing), GM India, said. GM?s average monthly sales of Spark have been 3,600 units in 2009.

Analysts believe the phenomenon can be more predominant if the Indian government continues to stimulate the demand by incentives like reduced excise duty. ?Indian automobile market is one of the fastest growing markets and since compact cars offer value for money proposition, there is a huge reservoir of demand in months to come if the government continues with the stimulus measures for some more time,? a Mumbai-based analyst added.