adminThe exhibition, which takes place every two years, has grown in stature in line with interest in the Indian economy, which is expected by economists to expand by 7,0 percent this financial year despite a recent slowdown.
“We now see this as one of the most important shows on the calendar,” Ford’s Asia-Pacific president Joe Hinrichs said ahead of the opening, adding that the group expected India’s market to be the world’s third-biggest by 2020.
In a sign of changing priorities in the industry, Jaguar Land Rover, the British brands bought by India’s Tata conglomerate in 2008, decided to skip the overlapping Detroit motorshow to focus on the New Delhi expo. Beneath the dazzling lights, pounding music and exhibition girls accompanying the launch of up to 50 new models lies a clear commercial logic. Car ownership remains low in India, a country of 1,2 billion people where two-thirds live below the poverty line, but an expanding economy is minting millions of new middle-class families and millionaires each year. Growth of the passenger car market hit 31 percent in 2010, but has since dropped off sharply due to rising interest rates, higher commodity prices and economic uncertainty.
The Society of Indian Automobile Manufacturers expects sales in the fiscal year to March to rise between 2 and 4 percent.
Far from discouraged by what analysts say is a temporary blip, French auto giant PSA Peugeot Citroen is to announce its return to India after an unhappy and ultimately aborted alliance with a local partner in the 1990s.
Fellow French manufacturer Renault re-launched itself in India last year amid a big marketing push and will unveil its new
Pulse model and an SUV at the Delhi Expo, which ends on January 11.
Peugeot, Renault and BMW, the German manufacturer that dominates in the luxury segment of the Indian market, face dire market conditions at home as the European debt crisis dampens consumer spending.
“The current slowdown (in India) is not here to stay as the fundamentals of car sales growth, namely urbanisation and car density, are still very attractive,” said the consultancy Deloitte in a recent study.
Indo-Japanese alliance Maruti Suzuki, the market leader with about 40 percent of car sales, said the current slowdown was
“short-term and temporary” as it unveiled a concept SUV yesterday.
India remains a country dominated by small cars as consumers follow the familiar path of upgrading from push-bikes, to motorbikes to cars, with most new buyers opting for affordable models at the bottom of the market.
But Maruti Suzuki chief executive Shinzo Nakanishi told AFP that the industry’s focus was shifting from the low end of the market as buyers become more sophisticated and less price-sensitive.
“Pricing is important, but people are also thinking differently from five to 10 years ago,” he told AFP.
“People want more luxury and well-equipped models.”
Proof of this, he said, was that 70 percent of customers for the company’s cheapest model, the Alto, opted for the “super deluxe” model with extra trimmings rather than the standard version.
Tata Motors has found this out with its Nano, the world’s cheapest car sold at about US$2 650, which was marketed as an affordable vehicle but has failed to excite the aspirational new middle classes.
Ford is using the Delhi expo to showcase a remodelled version of its small EcoSport SUV, which will be pitched at richer buyers looking for more comfort on India’s congested and often poorly maintained roads.
A 2011 report on the wealthy in India by Merrill Lynch Capgemini found there were 153 000 Indians who have financial assets of over US$1 million, excluding the value of their main residences.
This flush of new cash has also attracted the world’s luxury brands. Ferrari opened its first showroom in May last year, while Maserati and Aston Martin have followed suit. Besides luxury and small cars, there will be new electric vehicles from Indian manufacturer Mahindra & Mahindra which will also launch the South Korean brand SsangYong which it acquired in 2010. – AFP.
Online Reporter