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Cars vroom to million mark

23-December-2004
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Cars vroom to million mark

By the time 2004 comes to an end, Indian automobile producers will have for the first time sold over a million passenger vehicles in the domestic market in a year.

The Society of Indian Automotive Manufacturers (SIAM) estimates that sales for the year will touch 1.03 million, up 23.65 per cent from the 840,000 sold last year.

At the beginning of the year, several industry insiders had predicted sales growth would slow down, as 2003 had been a bountiful year. But the market showed no signs of a slowdown.

Car companies, on their part, kept the excitement buzzing with a record 35 launches, including new models, variants and special editions. Despite rising international steel prices, some companies, like market leader Maruti Udyog and Ford, slashed the prices of some of their models.

Special festive discounts by Hyundai (for three days) and Maruti Udyog (for a week) in November fetched the two companies around 27,000 bookings each.

"The boom in the market was mainly driven by easier and affordable financial deals. The growth was to a large extent also driven by overall economic growth," said Anang Dev Jena, the head of Synovate Motoresearch.

The year saw the advent of cross-over vehicles on Indian roads. The Indigo Marina, Ford Fusion and Hyundai Getz were launched keeping in mind the growing demand for cross-overs or fully loaded vehicles at reasonable price bands.

The star wheels in the entry level A and B segments like the Maruti 800, Alto, Santro and Indica saw brisk sales, recording 17-20 per cent growth year on year.

The mid-size segment, in the price band of Rs 4-9 lakh, grew the fastest at 25-30 per cent. "It is not about size and shape any more. Manufacturers have started giving fully loaded vehicles and reasonable prices. This trend has so far been seen in more developed markets, but India is catching up fast," said Vinay Piparsania, vice-president, marketing, sales and service, Ford India.

Thanks to the rising numbers, companies like Nissan, Audi, BMW and Porsche decided to make their vehicles available in the country through dealers.

And Suzuki Motor Corporation announced a mammoth Rs 6,000 crore investment in a diesel engine plant as well as a new assembly line in Haryana. Tata Motors, too, got into expansion mode: its annual capacity will expand to 225,000 units by March 2005 from the 150,000 per annum currently.

Towards the end of the year, Hyundai India caused the biggest upset in the automobile market when its Santro displaced the Maruti 800 as the country's largest selling car in November.

"By offering a discount on the pre-tax price, the cut in realisation was spread between excise duty, sales, dealer margin and the company margin. What is important is that we offered it in a month where sales would peak," said BVR Subbu, president, Hyundai Motor India Ltd.

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