The Indian car industry, which had been cooling its wheels in recession for the past three years, is on full throttle with sales approaching the million milestone.
Spurred by falling rates in auto finance, and duty cuts which have dented prices, the industry is expected to touch the magic figure by the end of this fiscal year on March 31.
India rolled out more than 8.2 lakh passenger vehicles between April 2003 and January 2004. And for the first time, the industry crossed the one-lakh mark in exports.
Which is why carmakers like B.V.R. Subbu, president of Hyundai Motor India Ltd, are buoyant about prospects. “The industry may well crack the million mark. With the overall economic upturn, passenger cars can hope for a 20 per cent growth. In January, 93,010 cars were sold, which translates into 3,000 vehicles a day. This is an all-time record,” says Subbu.
Maruti Udyog managing director Jagdish Khattar says, “The Indian small-car market is today the second largest, next only to Japan’s. But we have only scratched the surface, India has the potential to be the manufacturing hub for small cars.”
Khattar has reason to be optimistic. His company has topped the charts in India with the bread-and-butter Maruti 800 registering sales of 138,507 units.
However, a million may still not be enough. Says Khattar, “Our auto industry lacks volumes. We are limited by the size of the domestic market. Unless we attain (economies of) scale, it will be difficult for us to achieve global standards of cost and quality.”