Changing trends in the Indian Automobile Industry

Automotive updates | Admin | December 16, 2011 at 11:48 am

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Indian’s Automobile market, particulars the Passenger cars market has witnessed huge growth especially in the last two-three years. The change of the game was a joint effort by the domestic car makers, increasing competition from the foreign car makers, growth of overall economy and support from the government. Though, the initiatives till now have laid a foundation to the growth of the auto market but there is yet a lot to be explored to enable Indian story of being third auto market globally by 2015 and the numero uno by 2025, to be a complete success.

In view of the above mentioned targets, for which hardly any time is left, the Industry officials now need to gear up immediately, brainstorming needs to be done and final implementation approvals should be given with no time lag from now onwards. The various trend changes that have taken place/needs to take place in support of above mentioned targets are mentioned below.

1.Reducing the overall weight of vehicle: In a market, where sales are driven by the fuel efficiency that a car delivers, the weight reduction plays an important role in driving the growth of the market and thus enabling the targets to be met. The automobile industry has made it mandatory for the car makers to mention the fuel efficiency sticker on the car, so that the customer is in no dilemma which making a purchase decision. The reduction in weight of several parts will reduce the Kerb weight of the vehicle. This reduction in weight will enable in improving the fuel efficiency of vehicle. To illustrate, Maruti Suzuki has now replaced the earlier metal fuel tank with a plastic one. This initiative has helped Maruti Suzuki reduce the weight of New Swift by almost 15 Kilograms. And hence contributed to the efficiency. Similarly, BMW & VW has recently acquired substantial stake in SGL – The Carbon Company, which will now onwards collaborate to make lighter yet stronger components and thus enabling the improved fuel efficiency.

2. Take the Rural market route : The rural market in India is now playing an important part in driving the sales of the auto makers. However, a major pie luxurious car Sales are taking place in rural areas. Maruti Suzuki first adopted the rural market route, followed by General Motors and Mahindra. The trend change first came when Maruti Suzuki analyzed that the market in cities is nearing saturation however, scope still lies in rural market, as the increase in land cost has made the rural people earn huge bucks by various MNC’s purchasing land from farmers at a premium rate. This made the rural people rich and thus contributing to the sales of car makers.

3. Openness to new vehicles launched : The common man in India is now more open to new models launched from various German and French auto makers. However, as per a survey done in 2005, 90% of the citizens in India said they will stick to Maruti Suzuki while making a car purchase decisions mainly due to the lower running costs and after maintenance costs. However, now even the first time buyers in India are preferring i10, i20, Swift, Figo as compared to earlier times of Maruti 800 and Maruti Suzuki. This makes us analyze the market trend is now new vehicle driven and people have now become open to the new models, which shows Looks and Comfort have replaced to be the top influential factors rather than Low maintenance costs among the Indian citizens.

4. Diesel Car Sales more than Petrol car Sales : This trend of Diesel Car Sales being more than the Petrol car sales has been the first ever seen across the globe. It is the first time in India that Diesel Vehicle Sales have crossed the Petrol model Sales, thanks to the government’s unclear policies. The diesel petrol price difference now stands to apprx. Rs 28 per liter which has affected the consumer’s purchase decisions. Also, government’s unclear policy on deregulation of diesel has left the top officials among all auto makers in India scratching their heads to make a decision of production in diesel petrol mix. Several investments have been delayed by various car makers in lieu of no clarity on Diesel deregulation.

This is the time during which the government needs to brainstorm on all the factors that are holding back our Automobile market to reach heights. Several Immediate measure that should have been taken by now should not be delayed now and immediate actions should be taken now.

Written by Wheel-O-Mania