Auto boom in India

India remains one of the few markets in the world experiencing double digit growth as was seen in calendar 2007. What was heartening is that despite the dollar plummeting, prices virtually doubling for barrel of crude and interest rates trying to do their best to persuade punters to hold on to their cash, the automotive purchase put-off didn’t happen in as strong a force as many expected.

Much of this can be laid down to the robust economy and the fact that Maruti Udyog really stepped on the gas with strong, focused offerings for the largest selling segments. The large hatchback class in which the Suzuki Swift reigns supreme is poised for an exponential growth. 2007 was the year large hatchbacks were seen to try and grab a foothold with the Chevrolet UVA and the Hyundai Getz 1.1 adding critical mass to the Swift. The budget stalwart like the Tata Indica experienced a bit of a slowdown coming close as it is the end of its product cycle and a new model sorely needed to Jazz things up, both visually and dynamically.

2008 will be remembered for the number of large hatchbacks we can expect from our car makers – this sort of a car will proliferate considering the issues of road space, parking and median speeds. The Skoda Fabia, the new Tata Indica X1, the Fiat Grabde Punto, the Suzuki A-star and possibly the Mazda2 (from Ford) could truly spark off major interest and growth in this segment. When one factors in the possible move of Toyota and Honda in this category, one suddenly finds major action unwinding in this segment.

Diesel made bold strides in 2007 and will continue to do so in 2008, that is both good and bad news depending on which side of the informed fence one sits on. The zeal with which a few agencies have been mauling the compression ignition engine is uncalled for and purely based on the “old” tech-diesels we had in our trucks, buses and few cars and jeeps. The old style diesel has been vanquished and with common rail direct injection systems becoming prevalent, the diesel has set the pace for automotive propulsion in India, just as it has in Europe, the most mature automotive market in the world.

The issues which really clouds things, rests solely with the government and its inaction. The authorities haven’t kept pace on the technological front where refineries are concerned (low sulphur content diesel is the need of the hour) and secondly, on the final end-point delivery system. Policing the quality and quantum of diesel dispensation is sadly inadequate and we have experts suggesting quite emphatically that if the diesel (and petrol) dispensed is of the grade it leaves the refineries, the quality of air in our cities would be of a high order. The car (and bike) makers are saddled with the inefficiencies of a system yet groping for answers.

The high-end sector of the car business is in top gear and not withstanding high interest rates or the burgeoning Euro, the likes of Mercedes Benz, BMW, Audio, Rolls-Royce, Bentley, Lamborghini, Porsche and others had mile wide smiles as they fed on pent up demand and ushered in a plethora of models as well as attained respectable volumes.

It is the Rs-one-lakh car which in six to seven years has gone from plain ridicule to guarded optimism to the fact that it could be absolutely do-able! The world will get to see Tata’s baby at Auto Expo in Delhi in January but even before it would be unveiled none other than the great exponent of value engineering, Renault’s Carlos Ghosn has paid Tata and his team the ultimate accolade by stating that innovative design could help achieve a $3,000 car after all! While MUL and Suzuki remain guarded, expect the Tata one-lakh car to shake things up mightily.

The great thing about all this activity is that will see great value deals emerge from all car makers. While quality will have to be manifest the entire package of product, customer handling, service and the overall ownership experience will determine who comes out on top.