Car retail has really picked up well in India in the recent years. Maruti Suzuki, the largest small car retailer recorded an increased growth of 36 per cent whereas, its immediate competitor Hyundai recorded a 43 per cent increase in sales in December, 2009. Mahindra & Mahindra (M&M) and General Motors recorded a 100 per cent growth in the month of December last year. M&M’s sports utility vehicles like Scorpio, XYLO and Bolero recorded a growth of nearly 120 per cent last December. Skoda Auto a luxury car-maker reported a growth of 52 per cent during December last year. All this increase in car sales is the outcome of year-end discounts and the overall improvement in the economy with salary hikes for Government employees and a healthy stock market. Despite sustainable growth rate, Indians seem to prefer small cars. For example, Indians still swear by the Maruti 800 name, giving it the tag of India’s first people’s small car.  

Small is big

Indians have always preferred small cars and the trend seems to remain the same for the coming year as well. To keep the popularity of small cars alive, the year 2010 will witness the launch of many new small cars like Ford Figo, Chevrolet Beat, Hyundai i30, Volkswagen Polo, Nissan Micra, Fiat Bravo, Mahindra Renault Sandero. The ever increasing craze for small cars in India is the outcome of factors like:

Fuel efficiency:  Small cars are more fuel efficient in comparison to big cars.

Affordable:  An affordable price range is another factor that goes in the favour of Indians preferring to drive small cars.

Road and traffic conditions:  The congested roads and heavy traffic is another prominent factor that has led to the popularity of small cars in India.  

Luxury car market

No doubt, small cars are preferred by Indians but this trend has not restricted the international car manufacturers to launch their new luxury car models in India. The luxury car market in India is still at a nascent stage. But, growing at a fast pace and with multi-million dollar investments from international luxury car brands, car retailers in India are talking long-term. It is incorrect to believe that the recently concluded tenth Auto Expo witnessed the display of only affordable small cars, because some of the leading global luxury carmakers like BMW, BMW Z4 Sportscar, Porsche Panamera, Mercedes E-Class, exhibited their cars and are planning to launch new models and attract interests from prospective consumers.

Growing competition

With the luxury car market growing at an exponential rate in India, the entry of new players in India, leading car manufacturers like Maruti Suzuki India Limited (MSIL) and Hyundai Motor India Limited (HMIL) are expected to face tough competition. This competition will be fuelled by the increasing penetration of global Original Equipment Manufacturers (OEM). Many international OEMs are coming in either independently or in collaboration with existing players aiming at reducing the time to market and to avail the benefits of an established distribution network.

Third party car centres

Third-party chains in India such as Reliance AutoZone, Carnation, and MyTVS have also started gaining popularity and acceptance among Indians as they give consumers a credible alternative to dealer workshops that are not licensed or run by auto makers. Recently, Carnation Auto, the multi-brand car sales and service network, announced its plans to open its first automobile solutions hub for premium cars in tie-up with Fiat group company Magneti Marelli. The announcement is made at a time when luxury carmakers like BMW, Audi, Land Rover and Volkswagen have either launched or lined up high-end sedans and sports utility vehicles in the country.

So, by now you would probably like to re-consider your decision of buying a particular car as this piece of information must have added to your knowledge. Here is hoping that the road ahead in choosing your favourite be smooth. All the best and happy driving!