Monday, January 4, 2010

10 cars set for global launch at India's biggest car expo

NEW DELHI - Small will be big at an Indian auto show when the world's leading manufacturers unveil a slew of compact cars designed for one of the world's fastest growing markets.

AutoExpo 2010, which begins on Tuesday and runs until January 11, is expected to be the biggest ever, featuring global releases of new models from the most famous names in the industry.

Recent months have seen foreign giants like Ford, General Motors, Hyundai and Renault join a stampede to India, where each has promised a small, cheap model designed for what Ford boss Alan Mulally termed the "sweet spot" of the market.

Many of these will be on display during the week, including the Figo from Ford, concept small cars from Japan's Honda and Toyota as well as the India-made Polo by Germany's Volkswagen.

"India is developing as a small-car hub," senior director at the Society of Indian Automobile Manufacturers (SIAM), Sugato Sen, told AFP.

He pointed to government policies that have promoted the production of small cars domestically, while rising incomes have driven demand for basic, no-frills vehicles.

"India ultimately is a developing country where the average annual income is below 1,000 dollars a year, so this is reflected in the vehicles we use," he said. "They're not sophisticated, but the market is growing double-digit."

Third largest car market

India is Asia's third-largest car market after China and Japan, but what has manufacturers excited is the potential explosive growth in a country with a billion-plus population.

"Growth in developed counties is almost saturated so they are looking for where they can sell, especially in the low-end, entry-level segment," said analyst Vaishali Jajoo from Angel Broking.

She said sales of passenger vehicles have been growing at above 10% a year for the last 5 years and will carry on at "12 to 13% for the next 4 to 5 years."

Incomes are rising steadily, meaning Indians are following the familiar pattern of upgrading their personal transport from push bikes, to motorbikes, then to cars.

The market is forecast to triple to 6 million car sales annually in a decade -- a mouth-watering proposition for car groups, but a concern for those who drive on the already traffic-clogged streets of India's cities.

"The train is leaving the station and you want to make sure you have the products on line," Carlos Ghosn, who runs Renault and Nissan, said in November as he announced plans to produce an ultra-low-cost vehicle.

Such is the buzz around the India show this year that some insiders are beginning to speak of it in the same breath as the Detroit auto event that kicks off on the day the Delhi exhibition finishes.

Global launches

The Volvo C70 sedan showcased at the 2008 India AutoExpo. Ten global launches of new vehicles are expected to be made at this year's car expo.

Ten global launches of vehicles from heavy trucks to two-wheelers are planned at the Delhi event, which will see an expected 1.8 million visitors pass through the doors.

This year's Delhi is the 10th, but it first caught the world's attention in 2008 when Indian manufacturer Tata Motors unveiled its Nano, the world's cheapest car that has since hit the roads, though production remains restricted.

Ranojoy Mukerji, an auto sector analyst and adviser on a government car certification project, underlines that the range of new vehicles set to hit the market is good news for consumers.

But it means manufacturers will face a highly competitive market that is currently dominated by Indo-Japanese group Maruti Suzuki, which has about 55% market share and a strong track-record in the small-car segment.

"It will become a very tough market because the consumer will have a lot of choice," Mukerji told AFP. "Before (consumers) had five cars to choose from, suddenly they will be looking at 20."

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