Saturday, September 09, 2006

Small Is Beautiful

Some say small is beautiful. Talking about small cars, nothing can be more correct. Small cars are cheap, generally consume less fuel than big cars, go well with the lifestyle of middleclass people and are easily manoeuverable in Indian cities having narrow roads. The limousines and big cars are beyond the reach of Indian customers and those are better seen in films, TV shows as well as glossy magazines rather than owned.
Tatas - the oldest corporate house in India knows the mind of Indians. They have already embarked on a small car project to be located in Singur, West Bengal. Initially it would produce 2,00,000 cars but by the year 2012, the capacity will go up to 5,00,000 cars.
The Japanese and South Korean auto giants having joint ventures in India have realised, albeit, belatedly that small cars are the In-Thing in India.Toyota Kirloskar will bring out a small car within next 2-3 years which will expand their capacity to 2,50,000 cars and a market share of 10%. Its plant location has not yet been finalised. Not to miss the boat (or car?), Hyandai will bring a compact car by the year 2008 for both domestic as well as export markets. Honda Siel is also planning to invest $200 million in a new plant with a capacity of 1,00,000 cars for the Indian market. The location is yet to be fianalised.Suzuki is holding talks with its alliance partner Nissan for another small car plant which may require investment of Rs2,500 crores ($550 million). It will have export thrust. If Nissan's plant comes up, the total exports from Suzuki-Maruti and Nissan plants will cross 4,00,000 cars. The diesel versions may also get a further boost because of frequent fuel price hikes.When it happens, small car exports from India will turn the table on foreign big car makers.
Take a big bet on the 'small'.

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