Auto News

Car makers head to Indian expo seeking growth

By Motortrend India Staff   |   04 January,2012

The world’s leading car makers jostled for space at the start of India’s Auto Expo on Thursday, eyeing a market that has slowed sharply but remains a hotspot compared with depressed Western economies.

The exhibition, which takes place every two years, has grown in stature in line with interest in the Indian economy, which is expected by economists to expand by 7.0 percent this financial year despite a recent slowdown.

"We now see this as one of the most important shows on the calendar," Ford’s Asia-Pacific president Joe Hinrichs said on Wednesday, adding that the group expected India’s vastly under-penetrated market to be the world’s third-biggest by 2020.

In a sign of the changing priorities of car makers, Jaguar Land Rover, the British brands bought by India’s Tata conglomerate in 2008, decided to skip the overlapping Detroit Motor Show to focus on the New Delhi expo.

Car ownership remains low in India, a country of 1.2 billion people where two-thirds live below the poverty line but an expanding economy is minting millions of new middle-class families and millionaires each year. Growth of the passenger car market hit 31 percent in 2010, but has since dropped off sharply due to rising interest rates, higher commodity prices and economic uncertainty. Auto industry group the Society of Indian Automobile Manufacturers (SIAM) said last month sales in the fiscal year to March would rise between two and four percent, far from the 16-18 percent forecast last year.

Far from discouraged by what analysts see as a temporary blip, French auto giant PSA Peugeot Citroen is to announce its return to India after an unhappy and ultimately aborted alliance with a local partner in the 1990s. Fellow French manufacturer Renault re-launched itself in India last year amid a big marketing push and will unveil its new Pulse model and an SUV at the Delhi Expo, which ends on January 11.

Peugeot, Renault and BMW, the German manufacturer that dominates in the luxury segment of the Indian car market, face dire market conditions in their home markets as the European debt crisis dampens consumer spending.

India remains a market dominated by small cars as consumers follow the familiar path of upgrading from push-bikes, to motorbikes to cars, with most new buyers opting for affordable models at the bottom of the market.

Besides luxury and small cars, there will be new electric vehicles from Indian manufacturer Mahindra & Mahindra which will also launch the South Korean brand Ssangyong which it acquired in 2010.

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