NEW DELHI: A resurgent and confident economy saw Indian car sales beat the developing market tag in 2010 to emerge as the 'market to be in' as sales exploded to record levels, which paled the subdued performance in erstwhile heavyweight markets of the West. The icing on the celebratory cake was that the outlook remained even more bullish.
The festivities, though, were dimmed somewhat as the industry's showcase product, the Tata Nano, failed to have a roaring start, bogged down by repeated incidents of fire that raised questions over the car's safety . Adding further to the unease was the split of Hero Honda, the 26-year-old venture of the Munjals and Japan's Honda, as both partners decided to go separate ambitious ways to end growing differences.
Isolated cases apart, 2010 proved to be a bumper year for the industry as newer models and favourable interest rates gelled well with the economic surge to push numbers to record levels, making India one of the fastest-growing market for cars globally and raising hopes that it may be headed for a boom similar to that witnessed in China, which rode past a struggling US to become the world's biggest car market. Experts suggest that low penetration of cars is a factor that pushed things in India's favour.
Barring the Nano, which failed to deliver despite the exit of Maruti800 from the top metros due to new emission norms, the majority of models did well, leading to neverseen-before waiting lists on many models. The sudden push even took the industry by surprise, something that explains the shortage faced by car and component makers in meeting the huge rush.
And the high action, especially in the heart of the car market, even threatened the dominance of established players like Maruti Suzuki that saw its market share fall below 50% for the first time in its history. Volkswagen, Ford, General Motors, Nissan—all had new models ready for the small car segment, most of which helped them corner crucial market shares.
To the surprise of many, models like Ford Figo, VW Polo , Nissan Micra and GM's Beat enjoyed a good run. The Indian customer, earlier believed to be loyal to established and trusted brands, was not averse to a shift to newer models, provided they appealed to them and came loaded with features. "The Indian customer is getting younger and more aware, and he loves to flaunt," says Neeraj Garg, director at Volkswagen India. "If I am to describe the profile of these customers, they are young entrepreneurs or those who are earning well quite early in life. They are more aware than the earlier buyers and want something beyond an ordinary car that provides them with requisite safety features and is also something that they can flaunt. It's their way of saying that they have arrived in society at a young age," Garg adds.
But the unprecedented boom was a huge surprise since it came just when the Indian economy was coming out of the global economic slump that had dampened sentiments following the collapse of Lehman Brothers in late 2008. "The phenomenal growth was unexpected and a surprise," saysArvind Saxenaof Hyundai India.
Read more: Indian auto market stepped on the gas in 2010 - The Times of India http://timesofindia.indiatimes.com/business/india-business/Indian-auto-market-stepped-on-the-gas-in-2010/articleshow/7154554.cms#ixzz18zyvCj4y
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