Auto industry India
The Indian economy is booming by all standards and as revealed by the sundry economic surveys conducted by several think tanks. People are splurging money on the good things of life. Luxury and indulgence are no longer dirty words, a hangover of our socialist past.
On the contrary people are living life to the fullest and pampering themselves with the best things that money can buy. The magic mantra is if you have it, flaunt it. A report by NCAER predicts that there will be about 50,000 Indians with incomes of Rs 1 crore by 2005 and this number will more than 140,000 by 2010.BY 2030 India will be the third largest car market in the world after China and Japan. This coupled by the purchasing power of the ultra rich makes India a top destination for manufacturers of luxury cars. Cars are the latest symbol of wealth, a statement of the fact that you have arrived. By all industry predictions there is a huge demand in India for luxury cars. The Indian car industry is the third largest in the world. Going by this demand many luxury car makers like Audi, Bugatti with its sport scar Veyron are all set to enter the market in 2006.The past year has already witnessed the launch of the Rolls Royce Phantom, Bentley Motors' Continental Flying Spur, Audi's A6 version, and the convertible sports car Carrera Cabriolet from Porsche AG's. Honda is set to launch Civic at a price tag of Rs. 10 lakh. BMW has commissioned a plant near Chennai that will be operational from 2007. Other companies keen to set shop are Nissan, Citroen and Renault.
Investment by foreign companies in automobiles implies a bright future for the auto industry India. This will lead to the creation of jobs, and a wider range for consumers to choose from. It will also give Indian companies a chance to compete globally for clients. This will greatly benefit the auto component and ancillary industry that will get access to the latest technology and manufacturing practices.
In fact some of these companies have already started acquiring small companies abroad. Bharat Forge acquired Sweden?s Imatra Forging Group while Continental Engines bought over Vege Motors of Netherlands. With the trend in global outsourcing to low cost countries, companies like Sundaram Fasteners are the sole worldwide manufacturers of radiator caps for General Motors. Sundaram Fasteners has in fact won the Deming Award for quality and the best supplier award from General Motors for a number of years continuously. This implies that Indian auto manufacturing has come of age and regularly maintained high standards of quality required for competing in the global arena. Exports have increased by over 40 % in the past year and the auto component industry has increased its output by 30 % to almost $1.4 billion, as per industry estimates. The industry also hopes to get tax sops for its sector in the coming budget. This will result in reduced duties and greater affordability. Reduced customs duties will definitely encourage the import of luxury cars through the proper channels.
Size of the luxury car market
As per industry estimates the luxury car market stood at a puny 2500 units with a projected growth rate of 15% a year. This is less than two percent of the over one million Indian car market. This is tiny as compared to the mid size segment and makes one wonder what the fuss is all about. However a large demand for luxury cars comes from rich farmers of the hinterland, who do not figure in any surveys and hence reflect a latent demand for luxury cars.
Price of luxury
Audi with its A4, A6 and TT coupe models starts at Rs. 40lakhs. BMW costs Rs.60 lakh. The Mercedes C class is the cheapest car in this segment at Rs. 24 lakh with the Maybach costing a whopping Rs. 5.5 crore. Bentley costs Rs. 41 lakhs upwards with the top end model costing 2.5 crores. Rolls Royce costs about Rs. 3 crores, a Porsche costs Rs. 45 lakhs, while a Jaguar costs Rs. 80 lakhs.
Range of luxury cars
Opel Vectra- This is a petrol car with security features like air bags and a 2198 cc petrol engine. This is in addition to the mandatory features like defogger, adjustable steering wheel, alloy wheels and fog lamps.
Skoda Superb has a 2771 cc petrol engine with electrically adjustable driver and passenger seats, electric sunroof and electronic parking distance control. These are additional features besides the usual central locking and air bags present in most cars nowadays. Other cars from the Skoda stable are the Skoda RS and the Skoda Octavia. Both are petrol variants with good ground clearance and customized interiors. The Skoda Rider is a diesel car with similar features and available in five colors and four variants.
Toyota ? The Camry has a 2995 cc petrol engine with leather upholstery and spacious interiors. It has security features like air bags; brake assist and door open warning light. It is available in two variants. Toyota Corolla has a 1794 cc petrol engine and comes in five colors. It is available in five variants with all the security features and standard accessories.
Mercedes- The C class has a 1796cc petrol engine and is available in four colors and about ten variants across different price ranges. The E class has the same engine but other electronic sensing features for braking, and road stability, available as four variants. The S class has a more powerful engine of 3724 cc and is supreme in luxury with a multifunction steering wheel, integrated seat ventilation and security features for braking. It is available in four variants.
Pitfalls of the luxury market.
Manufacturers of luxury cars are fully aware that the picture is not as rosy as it is painted out to be. They are prepared to wait for the long haul since the Indian market is small and people test the waters before putting so much money in a car. The Indian consumer is like his Western counterparts, very well informed and extremely demanding. So these manufacturers have to provide the best service to customers who may be in far-flung areas but expect best value for money. Hence they have to keep in mind that service and accessibility play an important role in building long-term relationship with a high value customer. They have to give latest models of cars to customers who won?t be satisfied with a hand me down, since they are paying so much money for a car.
Therefore the luxury auto industry India market in India is booming but comes with its own set of problems and issues that have to be addressed from time to time.
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