India : The world export hub for small cars

Which is most popular car in India ?
It is Maruti Alto, earlier called Maruti 800.

The small cars always have been very popular in India thanks to their low cost, higher fuel efficiency and versatality. The small car market share stands at whopping 70% of all cars sold in India. As previously mentioned on this blog the global automakers are in a rush to enter India with their small cars. However, it is just not for launching their cars, but automakers across the globe are looking at India as Asia’s Small car export Hub.

Hyundai is one of the prime examples of this. They have moved their entire production of Atos Prime, their very popular compact car to India. These cars are exported to more than 67 countries across the globe through their hub in India.

Other car makers like, Nissan, Renault, Suzuki, Honda, General Motors and homegrown automakers like Tata, Mahindra either already have or are aggressively making plans to setup India as their export hub. This is a exciting news for India. The amount of foreign exchange coming in through this ventures will make significant contributions to the growth of Indian economy.

Analysts say India’s manufacturing could meet the global demand for compacts anticipated as Asia’s middle class grows and consumers worry about higher fuel costs.

This surge in growth has come about thanks to the easing of policies by Indian government. The global automakers are very well aware of the rising middle class in India and want to ensure that they are part of this prasperity boom. However, automakers are still fighting out higher tax structures on imported auto parts and foreign pre-assembled cars. The question of Infrastructure also remains to be resolved.

One of the positives though is that foreign automakers are allowed to set up fully-owned subsidiaries, which could give India an edge over China, where local partners are mandatory.

The Society of Indian Automobile Manufacturers predicts car exports from India to rise more than five times to 1 million units by 2010, said Dilip Chenoy, director general at the trade body. In the fiscal year ended March 2007, India exported 193,000 cars.