New Delhi: Global auto makers will showcase a slew of small cars at the New Delhi Auto Expo that starts on Tuesday as they seek to attract consumers in an expanding market where sales are forecast to double by 2015.
Now, in its 10th edition, the expo held every two years has grown to rival the Shanghai and Frankfurt auto shows—two premier events where participation and attendance felt the impact of the downturn in the global automotive industry.
India focus: The Figo is Ford Motor’s designed-for-India small car. Ford, however, is not participating in the expo starting tomorrow. Rajkumar/Mint
India, where the auto industry has been a star performer in the manufacturing sector, has been spared the worst effects of the global downturn. Passenger car sales increased 21.1% to 1.2 million units in the first eight months of this fiscal.
“The Detroit Auto Show follows the Delhi expo but still there is a lot of enthusiasm and full participation from international companies,” said Pawan Goenka, head of the automotive sector at Mahindra and Mahindra Ltd, who is also president of the Society of Indian Automobile Manufacturers, or Siam.
Spread over 125,000 sq. m —equivalent to the size of 16 soccer fields—the expo space has been completely sold out with organizers scrambling to accommodate last-minute requests for participation.
Topping the industry’s agenda is a plan to unveil a range of cost competitive small cars to take on current market leaders Maruti Suzuki India Ltd, Hyundai Motor Co. and Tata Motors Ltd.
“Everyone believes that significant volume growth is going to come only from small cars for the next five to ten years,” said R. Venkatraman, a partner in the automotive practice at AT Kearney.
Ford Motor Co. fired the first salvo in September when chief executive Alan Mulally flew down to India to unveil the Figo, its designed-for-India small car. Ford is not participating at the expo.
General Motors Co. plans to unveil the Beat on Monday, while Volkswagen AG, which has already commenced the production of the Polo in December, shows the car on Tuesday—though sales will begin only from March. Honda Motor Co. and Toyota Motor Corp. also plan to showcase their small cars for the Indian market.
India’s 1.4 million strong car market is dominated by the small car—generally defined as cars with an engine capacity of less than 1,200cc and shorter than 4m—that accounts for 70% of total sales.
Sales are expected to rise to three million units by 2015 resulting in the market having the scale to support platforms and models engineered specifically for India. As a result, global auto makers are scrambling to plug the small car gap in their portfolios.
New arrival: A file photo of a man looking at a Volkswagen AG Polo car model at the company’s India plant in Chakan, Maharashtra. Volkswagen AG commenced production of the Polo in December. Adeel Halim/Bloomberg
Equally significant is a spurt in worldwide demand for small cars after the spike in fuel prices in 2008 that has resulted in many manufacturers looking at India as a production base.
Among them is Ford, which is looking to source exports of its small car from India, according to John Parker, Ford’s recently retired executive vice-president for Asia-Pacific and Africa who had disclosed this during an earlier interview to Mint. Parker retired on 1 January.
Nissan Motor Co., too, plans to shift production of its small car, Micra, from the UK to India, The Times of India reported in August.
Hyundai and Maruti plan to unveil electric versions of the i10 model and an R3 multi-purpose vehicle concept car, respectively, to draw visitors to their pavilions. Both companies have cemented their offerings in the small car segment in the past year.
Keeping with its chief executive, Carlos Ghosn’s push for electric cars Renault SA of France plans to showcase a production-ready electric car.
With India’s trucking industry slated for a significant overhaul in the next five years truck makers also plan to get in on the action.
On Saturday, Ashok Leyland Ltd unveiled its U-truck platform, which it plans to launch in end-March. The company plans to shift all its existing trucks to this platform by March 2013.
Mahindra and Mahindra plans to launch its range of trucks in partnership with Navistar International Corp. as does Eicher Ltd in collaboration with Volvo AB.