It's destination Delhi for global automakers as the 10th edition of the Auto Expo begins on Tuesday. From the Germans to the Japanese, all leading car makers are vying for their share in one of the fastest growing four-wheeler markets in the world.
It's the small car that will make big waves at the Auto Expo this year and it’s not surprising in the current global environment and definitely not in India, where even today almost 3/4th of the market belongs to small cars.
At least six new small cars are set for debut.
- The Chevrolet Beat is the first in a series of small cars to be unveiled in this edition of the Auto Expo. The company General Motors is betting big on this car with a sales target of over 50,000 vehicles for this calendar year.
- Besides, Toyota will launch two cars at the Expo on Tuesday, a global compact car and its hybrid champ, the Prius.
- Honda will also showcase its compact car for India, which will debut later in the year.
- German auto giant Volkswagen will launch its Polo hatch while its sister brand Skoda will debut the compact SUV, the Yeti, for the Indian market.
- Big guns here, Maruti, Tata and Hyundai are not behind, Maruti will kickstart the expo by showing a global concept called the R3, as well as launching a Versa-like van called Eeco. Experts say Maruti may import the Kizashi, its luxury sedan and showcase in Auto Expo.
- Hyundai will show the electric i10 and Tata Motors will finally debut the much touted Innova-like MUV, likely to be called Aria.
Significance of the Auto Expo, Delhi:-
India has become a important destination for the whole world and this is becoming like an export hub for small cars globally. Before Auto majors never launched India specific cars but now they seem to be giving huge importance to market here. India has become a very large market so every one wants to be in India. The stimulus pack last year has done wonders to car sales as Maruti sold 1 lakh cars in a single month in Dec'09. But depth of the market is still not big - owning a car is aspired by every Indian household and with low penetration, increasing income levels and resumption of buoyancy in the economy, the opportunity in the passenger vehicle market is humungous. At present, around 30 out of every 1,000 households in India own a car. Even if the households that can afford owning a car are considered, the penetration is quite low.
Case for Small Cars:-
- Most of the households affording a car fall at the bottom of the income distribution pyramid and can afford owning a small car only.
- Furthermore, the excise duty on small car is lower at 8% as against 20% on big cars. This would translate into strong growth in the small car segment.
- The factors like households affording big cars but opting for small cars on account of their easier maneuverability given the traffic chaos and parking constraints in metros and poor infrastructure and congested agglomerations in smaller towns would help pushing the small car sales growth.
- Furthermore, rich households opting for small cars as their additional cars either for female or young members in the family or for smaller trips would also push small car sales.
Destination India:- Global auto majors want to have this local market and use this as an export base also. After current Delhi Auto show, even Detroit show will be an opportunity for them but this has become more important and prestigious. Volkswagen has gone ahead and said they want nearly 10% of market share in India in next 2-3 years, currently Maruti is market leader with more than 50% market share followed by Hyundai and Tata Motors.
India is on every major global automobile player's roadmap, and it isn't hard to see why :
- India is the second largest two-wheeler market in the world
- Fourth largest commercial vehicle market in the world
- 11th largest passenger car market in the world
- Expected to be the seventh largest by 2016
- Robust production
Growth in other companies:-
Auto stocks have already risen into stratosphere in the last 12months owing to buoyancy in sales of all car-makers in India and now auto-related stocks would show the mettle.
- Established in 1976, Apollo Tyres Ltd is India’s leading tyre manufacturer, with operations in three continents, and headquartered in Gurgaon, outside India’s capital city of New Delhi
- Market Share of more nearly 20% across categories - Truck & Bus, Light Truck, Farm and Passenger
- Growing with the vehicle makers – Apollo Tyres has tie-ups with auto makers such as TATA MOTORS, ASHOK LEYLAND, MARUTI SUZUKI, M&M, GM, SKODA, VOLKSWAGEN, HYUNDAI, NEW HOLLAND.
- Turnover: FY09 Rs 49.8 billion / US$ 1.1 billion / Euro 754 million (March 31, 2009, exchange rates)
- Product portfolio: The entire range of passenger car, SUV, MUV, light truck, truck-bus, agriculture, industrial and off-the-road tyres; retreading material, retreaded tyres and alloy wheels
- Brands: Apollo, Vredestein and Dunlop (in 30 countries in the African continent) are the three key brands. Others are Regal and Kaizen (truck-bus tyres), Maloya (passenger car) DuraTyres (retreaded tyres), DuraTread (retreading material) and Acelere Wheelz (alloy wheels for passenger cars)
- Key markets of operation: India is the largest market accounting for nearly 70% of revenues.
- Exports reach 70+ countries from the three domestic markets of India, Europe and South Africa
- Mission:- A journey called “Passion in Motion” to be a US$ 2 billion company by the year 2010-11
