Small Cars, Big Plans

In the next couple of years there is going to be a lot of activity in the Indian car market. Not that there hasn’t been any in the past, but next few years is going to see a renewed interest by the major automobile manufacturers of the world. And most of this is going to come in the lower end of the market.

Small cars have always been big business in the unique car bazaar that our country is. This has recently received a boost thanks to the government giving excise duty relief to the manufacturers making cars which are less than 4000mm long and are powered by engines of capacities less than 1200cc for petrol and 1500cc for diesels. That last bit I think is totally stupid.

The barrage of small cars will range from the new segment created by the Nano all the way up to the Fabia. Every car maker in the world was stunned when Ratan Tata unveiled his baby to the world. They said it couldn’t be done, and most of them have now gone back to the drawing board trying to emulate the same. Bajaj and Renault-Nissan will be the first to respond to the Tata’s challenge. The little info that is available is that it will cost a wee bit more but will be more fuel efficient.

Hyundai have confirmed that they have started work on their own version. Even GM has said that they will launch a car smaller than the Spark in a couple of year’s time. Now one wonders why so much interest in a segment which is yet to be established. You see India will become the testing ground for a whole lot of these car models competing against each other in a segment which was as yet either lying dormant or been ignored.

The ones that will be successful will not only rule the lower end of the car market (more numbers means more revenue) here in India but other markets like ours around the world. These are the developing economies of South and Central America, Africa, South and South East Asia and Eastern Europe. But to do that, they have to slug it out here.

Above this particular segment is the bread and butter segment for the likes of Maruti Suzuki, Hyundai and Tata. All have their various models ready for launch in a short while. From Maruti will come the Splash, the Wagon-R replacement around the world, will sell alongside it here in India. It will be available with a petrol initially and a diesel later. The A-Star will join in the party soon after. It is the Alto replacement, but again you shouldn’t expect Maruti to axe its largest seller.

Hyundai will be coming out with the i10 diesel by the end of this year. Also to be produced at its new plant will be the i20. Although initially for export, I would count on Hyundai to bring it to the local market soon.

Tata on the other hand have the new Indica ready. It’s slightly bigger than the current car, but it looks a lot like it. It will be a good model for Tata to launch in Europe. And since the current car is not on sale there I don’t think it will be much of a problem. But I’m still not so sure when it comes to the local market. I mean they will have to distinguish it from the current car, but it looks so much like it in profile, I don’t think its going to be an easy task. Naming it something else than an Indica would be a good start. X1??

Tata’s partner Fiat has the Punto. The car turned around the company’s fortune in Europe. Fiat engines will power both the Punto and the new Indica. Punto is bigger on the inside and the build quality is superb too. Ford too, have big plans for a small car. They are currently testing the Fiesta based hatch and it is expected to be out by 2010. That is the same time the new Fiesta platform will be ready.

Both Honda and Toyota have got their sights on the segment too. While Honda will get the Fit/Jazz here, Toyota have a new small car under development already. Volkswagen too will have something based on the Up, kind of spiritual successor to the Beetle with the rear engine rear wheel drive layout.

So all in all, a lot of excitement in store for you and me in the next few years.