Auto News

Demand for Small Cars Soars High

By Motortrend India Staff   |   10 May,2009

Many countries like Germany, France, UK, Italy, and South Korea have decided to give tax benefits and fiscal incentives to the small cars buyers. No doubt, India, the world’s largest small car manufacturer is sure to benefit from the policy. Around 15 lakh small cars are produced in India every year.

Maruti Suzuki India managing director S. Nakanishi said that demand for low emission compact cars are on the rise globally. And they have managed to bag large orders from Germany, France, Italy, and UK. Maruti's export order for the current fiscal is 1.5 lakh cars which is 100 % jump from the previous fiscal. This is mainly due to the demand from Europe for its hatchback Alto (which in domestic market named as A-star).

These countries have also devised many methods to prompt people to scrap their old cars for the new fuel efficient cars. One of such initiative from Germany would be their decision to pay €2,500 for people exchanging their old cars for the new ones. Nearly 80% of the new purchases out of 2 lakh cars swapped under this scheme were compact cars.

In UK, the government offers a rebate of ₤2,000 to the buyers for replacing old cars. Moreover, in order to achieve the mark of 1 lakh electric cars in London in next few years, the government is also planning to offer a discount of ₤5,000 on small electric vehicles.

As many countries across the globe are realising the need of fuel efficient cars, car manufacturers back home in India is preparing to excel in the small car business.

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