‘Global launches’ The expo is witnessing one of the biggest global participation with automobile manufacturers and ancillaries from the U.S., Japan, China, Germany, France and Italy among others exhibiting their products. The current ‘car fair’ assumes great significance as it will be for the first time that the world’s leading automobile companies would unleash ‘global launches’ of their exciting new products. Interestingly, many companies plan to launch their products first in India and then scout for the global markets. The biggest driver of this growth has been the passenger vehicle segment and two-wheelers — while sales figure of cars went up from 6.75 lakh units in 2001-02 to 13.79 lakh units in 2006-07, in the case of two-wheelers, it skyrocketed from 42 lakh units to 78 lakh units, making India one of the hot markets not only in Asia but also across the globe, says SIAM.

Small and big India, which is the third largest car market in Asia, is no longer a market for smaller cars. Sales in all segments — be it an entry level car, a luxury hatchback, a sedan, a sports utility vehicle, a multi-utility vehicle or the branded products — are posting impressive growth. Interestingly, India will soon be the only market in the world to have both — world’s cheapest car, the Rs. 1 lakh ‘Nano’, and the costliest ones like the Maybach, Bentley, Phantom and Lamborghini having made their debut in India. When the entire country waited with bated breath in anticipation of ‘Nano’ being unveiled at the opening day of Asia’s largest automotive show — Auto Expo — in Delhi recently, it was hardly surprising to see a large number of people seeking trade inquiries with the executives of European luxury carmakers — BMW, Volkswagen, Renault and Audi — asking about availability of their cars in India that are priced between Rs. 30 lakh and Rs. 1.25 crore.

Mass potential It is this mass potential of the Indian automobile sector that is attracting all top car makers to India, forcing them to set up their production facilities in the country, not just to tap the domestic market but to source in overseas market, thanks to cheap Indian labour and low production cost. Similarly, commercial vehicles and two-wheeler market is also following the growth path. While Indian automobile manufacturers are exploring foreign markets, global players are entering the Indian market, either on their own or in collaboration with domestic players. The commercial vehicle segment, which off late has also come in the priority list of global players, has been growing steadily, from 1.46 lakh units sold in 2001-02 to 4.61 lakh vehicles in 2006-07. The impressive story continues on the exports front. While exports of two-wheelers have gone up from one lakh units in 2001-02 to six lakh units in 2006-07, in the case of passenger vehicles it has grown from 53,000 units to almost two lakh units, and in commercial vehicles from 11,000 to 50,000. Indian three-wheelers are also selling like hot cakes in the overseas market with exports rising from mere 15,000 in 2001-02 to 1.43 lakh in 2006-07.

Auto components Also cruising along smoothly with the automobile manufacturers is the auto component industry that recorded a growth rate of 25 per cent last fiscal, while exports of auto-components continued to soar touching the $3 billion-mark. “New investments continued unabated with many OEMs (original equipment manufacturers) and component manufacturers establishing new greenfield plants as well as enhancing capacities in their existing locations. The trend of Indian companies acquiring overseas companies gained further momentum with many Indian companies establishing global footprints through the mergers and acquisitions route. According to quick estimates, the component industry has already put in additional capacity worth $1 billion during the year. And this investment is all set to touch the $1.5 billion-mark,” says the annual report of Automotive Component Manufacturers Association of India (ACMA).