Booming is a small word for the Indian auto sector today. The pace at which it is growing, it seems that it would soon surpass the IT / ITes sector as the most prominent sector of our economy. The Indian auto sector has grown by leaps and bounds over the past decade. But with new product launches, entering of newer players like Kia Motors, Ssang Yong and also strengthening of players like Volkswagen, BMW, Mercedes etc, 2010 has turned out to be a coming of age year for the Indian automotive industry.
So what special has happened in the auto sector of this country this year?
The biggest event of the year was obviously the arrival of Tata Nano on Road. It finally hit the roads this year and also went into commercial production at Sanand. After the initial euphoria died down, issues related to quality, manufacturing issues, financial troubles etc. brought down its sales to a dismal 500 units in November. Even Maruti and Honda had to recall their A–Star and City models respectively but neither of them had to face scrutiny like Nano.
But then as Nano was going down, Mercedes and BMW’s were selling in the country like hot cakes. The rise of the executive class was displayed when in two days more than 150 BMWs and Mercedes each were sold. When the number of Mercedes sales surpasses Nano for a month, then some serious changes are happening around.
Our very old Ambassador, the symbol of Indian cars went for strong investment in innovation and R & D due to falling sales and revenue. But for a car which is slowly but surely reaching its decline stage, is investing on innovation for such a product useful? I doubt it! Even Maruti 800 had to withdraw itself from 13 cities due to strict Bharat Stage IV emission norms. Now this did make many of us nostalgic.
There were also breakups like the Hero–Honda group as well as marriages like the Mahindra–sang Yong one. The Hero Honda breakup was like a shock to an entire population because it has really been the true “Desh Ki Dhadkan”. Mahindra’s acquisition after Tata’s acquisition of JLR and Land Rover shows Indian automotive industry’s true international reach today.
What prompted this strong development?
With the economy coming back to the old levels of around 9%, there were many new car launches this year which included Maruti Suzuki Eeco, Ford Figo, Volkswagen Polo and Vento, Tata Aria, and Nissan Micra to name a few. More and more people are keeping more than a car.
The launch of Bugatti Veyron at 16 crore, plans of Aston Martin and Spyker to enter India as well as setting up of a manufacturing facility by Harley Davidson in Haryana shows that the premium market for cars in India is developing FAST REALLY FAST!
With increasing focus on acquisitions, mergers and take overs, the Indian auto industry has shown that it too has the POWER to be regarded in the top league.
And above all on the other end of the spectrum with Nano’s launch as well as Kia and other players entering the market for small cars and setting up manufacturing facilities for the same, India looks set to become the leader in manufacturing small cars.
The road ahead looks even better !