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13 Jan, 2010 03:31

‘Small and cheap’ are the buzzwords at Auto Expo in India

Glitz and hype is everywhere at Indian Auto Expo, as car makers try to woo the auto-buying market. But the stars of the show are the small cars, with both global and local players launching a wide range of hatchbacks.

"The strength of this market is small cars, I think international players have realized that and have come here to exploit the small car potential," says Hormazd Sorbajee, editor with Autocar India.com. "Also it’s not just a market here, but its also using India as a global base for exports and global production of small cars. And given the intrinsic strength Indian companies have in small cars, in making them low-cost, quite robust and fuel-efficient, I think the small car action in the world is now in India."

General Motors is betting on it. It has launched its latest small car, called the Beat, which will be manufactured for the global market in India and Korea. Priced at $7000, it is targeted at India’s middle-class, for whom price is key.

"It’s a perfect vehicle for a girl actually, it’s a female car. To park it, take it around, it’s easy to maneuver. Also it fits into the budget of people like us," says Shailaja Rao, a potential car buyer.

"That segment is expected to continue to grow – the average age in India is 25, more and more youthful people are looking to get into vehicles. So really the Beat suits that," says Karl Slym, Managing Director at General Motors India. "We’ve put infrastructure in to suit volume as well. We have an engineering centre of 1,500 people. So we’ve set ourselves up to be a long-term major volume player in India."

At the other end of the spectrum, several luxury carmakers are eyeing the Indian market, but demand for expensive cars is still small because of the 100 percent import duty slapped on cars built overseas. The three top German carmakers together sold only 9,000 cars in India last year.

If it’s cheap you want then the Tata Nano, priced at a mere $2500, remains a mix of quality and low-cost engineering that many global carmakers would love to replicate. It was launched at the last Auto Expo.

After all, 80 % of the cars sold in India are small cars. With poor roads, heavy traffic and high fuel costs, it’s no wonder why.