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Carmakers gun for mass market

24-May-2005
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Carmakers gun for mass market

Global automobile majors General Motors, Toyota and Ford are now eyeing the big-volume compact segment for volumes in the one-million-unit plus Indian passenger car market.

All three entered the market with C segment (Rs 500,000-Rs 700,000) offerings about six to eight years back, but are now looking at volume-generating models in the compact segment, despite the formidable presence of Maruti Udyog, Tata Motors and Hyundai Motor India in this segment.

General Motors India (GMI) is planning two launches in the B segment (Rs 250,000-Rs 500,000) over the next one year.

In fact, GMI had been eyeing the facilities of the ailing Daewoo at Surajpur in Uttar Pradesh to produce its Spark (earlier seen on Indian roads as Matiz) in the country. GMI wants a 10 per cent share in the overall market in the next two to three years, up from less than two per cent.

Toyota Kirloskar, too, is targeting to double its share to 10 per cent of the two-million unit market by 2010. It is also understood that Toyota may enter the volume segment in India through its small-car subsidiary Daihatsu.

Ford, say company executives, will continue to pin its strategy on the mid-size segment, expecting volumes to grow manifold in the coming year.

The three entered the Indian market with premium offerings that fell in the C-segment (loosely defined as the Rs 5-lakh-plus segment) - Ford Escort, Toyota Corolla (though the imported D-segment Camry made the debut) and GM's Opel Astra.

All three claim this to be their well thought-out strategy -- establish the brand name first by offering mid-size or premium cars and later gun for the volumes with compact or some volume-generating models. Today, the compact/mini segment accounts for over 60 per cent of the total market in India, and is showing no signs of weaning.

Analysts say this is a sound game-plan that will stand all three in good stead. Says a Delhi-based analyst, “Compact car players today like Maruti, Hyundai and Tata may face some hurdles in selling the C or D segment offerings as consumers perceive these as small car companies. But for the three global biggies, it will be a much easier task to sell their compact offerings that are in the pipeline.”

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