subject: Large Options for car buyers in the New Year [print this page] Large Options for car buyers in the New Year
After as many as 78 launches of compact cars, sedans and sport utility vehicles including model refreshments and variants during 2010, more new car models are set to burn the Indian roads next year. So get set to be spoiled for choice.
Automakers plan to capitalize on robust demand in the car market that helped sales grow 27 per cent this year the second fastest growth pace globally after China. Factors such as easy rates on car loan, availability of technologically advanced new cars and robust economic growth close to nine per cent ensuring enhanced incomes, will continue driving customers to showrooms to buy their favorite car.
Overall, relatively low car penetration in the country is set to drive growth in the next many years. Most analysts expect the industry to grow at 20 per cent in 2010 citing the above factors benefiting sales.
Though most action was seen in the small car segment, with automakers Volkswagen (Polo), Nissan (Micra), General Motors (Beat), Ford (Figo) and Maruti Suzuki (Alto K-10) launching new models in 2010, 2011 is expected to see most action in the entry-level sedan segment with Toyota, Nissan, General Motors, Renault, Honda and Skoda Auto planning entry-level sedans.
"Introduction of new models gives customers a wider choice apart from expanding the market. The fact that automakers are now focusing on the entry-level sedan segment is a very good development for the industry as it helps attract 65-70 per cent customers in the country who already own a small car and have to upgrade to a bigger car," Jagdish Khattar, industry veteran and chairman and managing director Carnation Auto said.
Though the entry-level sedan segment was dormant to an extent in the previous years with Maruti's Dzire model and Tata's Indigo apart from the decade-old Accent, Toyota's Etios sedan, priced as low as Rs 496,000, deliveries of whose will begin in the New Year, has had automakers standing up and taking notice of the segment.
New automakers too would join the party the coming year. While Peugeot is planning to re-enter the Indian market, Citroen plans to build an India factory during 2011 and South Korea's Kia plans to enter the market. After the launch of the most expensive car, the Bugatti Veyron at a tag of Rs 16 crore in 2010, Fiat's luxury car brand Alpha Romeo and world's most loved supercar Ferrari is also sure to set the roads ablaze during the early part of 2011.
"Fundamentally, the growth momentum is expected to continue as India is behind developed auto markets. The market predominantly will continue to remain a small car market but new models in the entry-level sedan segment will see customers migrating from small cars. OEMs (original equipment manufacturers) don't want to lose market share and thus competition is further set to intensify. The benchmark growth rate will definitely be around 20 per cent in 2011," Abdul Majeed, auto practice leader, PricewaterhouseCoopers said.
2011 is also set to see two new small cars from Honda and Toyota their big-ticket entry into the small car segment. Honda plans to launch Brio in Diwali next year at a price tag of under Rs 500,000 and Toyota expects to start sales of the Etios Liva small car during April this year.
"We will place Brio in the B+ (or A2+) segment, which is a rapidly growing segment that should help us get a substantial jump in volumes. We would be offering all values like the iVtec engine, quality and durability that people expect from a Honda car," vice president marketing at Honda Siel Cars India Jnaneswar Sen said.
Even in the long term, the industry is expected to record a CAGR (compounded annual growth rate) of 13-15 per cent for the next five years, according to Vaishali Jajoo, senior research analyst at Angel Broking.
