Features

In the fast lane

16 Nov 2017 by Akanksha Maker
Maruti Suzuki Vitara Brezza

Akanksha Maker reports on the latest in India’s automobile industry

India averaged an annual production of 24 million cars last year, making it the sixth largest producer of vehicles in the world. The automobile industry contributes more than seven per cent to the country’s GDP (Gross Domestic Product) by volume. To quote our Union Minister of Heavy Industries Anant Geete at the inauguration of a test track facility by Global Automotive Research Centre (GARC), “Indian automotive sector plays a very important role in the country’s manufacturing sector and is likely to contribute 12 per cent to the country’s GDP over the next decade.” (GARC is a unit under National Automotive Testing and R&D Infrastructure Project (NATRiP) that houses facilities for comprehensive testing services for cars.) He further stressed on how the Indian government is constantly making efforts to modernise production and encourage clean, safe and economical mobility services. By 2026, India is estimated to be the third largest automotive market by volume in the world. An industry that’s experiencing an accelerated upward trend, it is constantly attracting foreign direct investment by global manufacturers. (FDI of 100 per cent is allowed under the automatic route in the auto sector, subject to all the applicable regulations and laws.) In fact, the country’s burgeoning automobile industry is one of the key drivers of the government’s ambitious “Make in India” initiative that aims to fivefold the export of vehicles by 2026.

The magnitude and potential of India’s automobile industry has tempted global players to expand their operations here. This includes Suzuki (Japan), Nissan (Japan), Volkswagen (Germany), Hyundai (South Korea), BMW (Germany), Ford (USA), Toyota (Japan), Mercedes (Germany) and Honda (Japan). Then there are the homegrown biggies: Tata Motors and Mahindra & Mahindra, that make commercial vehicles along with passenger cars. Known for its acquisition of Jaguar Land Rover from Ford Motor Company at US$2.3 billion in 2008, Tata Motors is one of India’s oldest automotive companies with a rich history that dates back to 1945. It has recently signed a partnership with Volkswagen to develop vehicles for the domestic car market here.

However, the country’s largest passenger company is Maruti Suzuki India that accounts for 51 per cent of the Indian car market. A subsidiary of Japan’s Suzuki Motor Corporation, it’s safe to say most Indian families’ first cars were Marutis. Its latest launches — compact utility vehicle Vitara Brezza and the hybrid version of the multi-purpose vehicle Ertiga, helped it surpass Mahindra & Mahindra as India’s largest utility vehicle maker. Known for its utility cars, Mahindra & Mahindra’s Bolero and Scorpio have been its showstoppers for over a decade now. The evident shift towards petrol engines by Indian buyers in the last few years and the lack of petrol engine options by Mahindra & Mahindra are contributing factors for Maruti’s sweeping success in this segment. Its attractive price points and upped features across utility vehicles are further reasons. Following this positive response, the Indian-Japanese carmaker has a pipeline of SUVs that will be launched over the next few years. One of them is codenamed Y1K, an SUV that will make its entry in 2019 and take on the Renault Kwid — another vehicle that’s widely seen on Indian roads these days.

Renault India, the subsidiary of France-based Renault S.A is a fast growing automobile company that’s made its presence felt since its arrival in 2005. The Chennai-headquartered carmaker’s SUV Duster and aforementioned budget vehicle Kwid have helped it gain a solid five per cent market share in the Indian market. Recently launched here is its five-seater crossover Captur that was revealed earlier this year in Russia. Renault’s latest product brings it in the league of Hyundai Creta and the Honda BR-V.

Hyundai Verna

Hyundai’s Creta has been the brand’s third best-selling car in India for over a year now. It’s commendable to see the South Korean-Indian car company secure a close second position in the Indian market behind Maruti Suzuki. A relatively unknown brand when it ventured into India in 1996, it swept away the country with its Hyundai Santro. Its achievements may be attributed to its manufacturing prowess here as well. Hyundai is the largest exporter from India, shipping models built here to its markets overseas. For this carmaker, India accounts for a staggering 13 per cent of its global sales. It’s understandable why Hyundai has an impressive line-up for the country — this includes the all-new Verna, and the face-lifted Eon and Creta.

Honda WR-V

Hyundai closely competes with Honda Cars India, a subsidiary of Japan-based Honda that entered India in 1995. Its products City, Accord and Jazz have been hugely popular in the mid-segment. The brand new City and WR-V have contributed to its recent success — an 18 per cent growth in sales volume in 2016-17. The company has been receiving a lot of inquiries for its topmost brands such as HR-V and Civic (it was discontinued in 2012), which will be introduced in India soon. The next generation Amaze will be unveiled to the world at the 2018 Auto Expo that will be held in New Delhi — exemplifying the importance of the Indian market to Honda.

Nissan Micra

Another brand that’s been making waves in the industry is Nissan Motor India. Its global strategic partnership with Renault has been extended to India as well; the two share their manufacturing plant in Chennai. This alliance, along with Hyundai Motors India, Tata Motors and Maruti Suzuki India have been deemed as the primary challengers of the Indian market by Credit Suisse, Zurich-headquartered global financial services company. Nissan arrived in India only seven years ago with the launch of its compact vehicle Micra. Sunny followed in 2011 and its mid-sized SUV Terrano was introduced in the Indian market in 2013. The company recently launched its 2017 face-lifted Micra, that is the only hatchback in the company’s Indian portfolio. Nissan X-Trail Hybrid, Nissan Qashqai (SUV) and the high-end Nissan Kicks (SUV) are in the pipeline for the country.

With SUVs getting increasingly popular in the Indian market, another name that’s managed to carve its own niche is Ford India’s EcoSport. Thanks to this striking product, Ford rose to become the fifth largest player in this segment. This year, Ford is gearing up to launch some of its new-generation offerings from its global portfolio in India. This will begin with the new EcoSport that will be introduced shortly. Its new generation Figo and Aspire models are also rumoured to be displayed at the 2018 Auto Expo. Ford launched its premium offering — Ford Mustang — earlier this year. Its latest version that will be unveiled globally this year, will reach Indian shores by 2018. Another popular offering by Ford is its Endeavour, which also has an update in store.

Volvo XC60

Owned by Ford Motor Company under its Premier Automotive Group is Volvo Cars, that has big plans for the Indian market. The company is considering assembling its cars here, with the aim of grabbing ten per cent of market share in the high-end segment by 2020. It sells a range of premium vehicles and SUVs including Volvo S90, Volvo XC90 and Volvo V40. The carmaker’s lowest priced model is at 26 lakh, positioning it alongside the rest of the luxe automotive brands in the country. The all-new second-generation Volvo XC60 premium compact SUV will be launching in India next year.

Speaking of luxury carmakers, it’s unfair not to mention the German heavyweights that have conquered India’s premium market with panache. Catch hold of Business Traveller India’s June-July issue to read a detailed story featuring the contribution of AudiBMWMercedes-Benz and Volkswagen to the Indian automotive industry or visit businesstraveller.com.

The government of India is also giving prominence to electric vehicles under FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) scheme. And if you think this is just an aspiration, the following is for the cynics: Nagpur recently became the first Indian city to have an all-electric cab fleet. Ola Cabs, India’s homegrown taxi aggregator, deployed about 100 electric vehicles from Mahindra & Mahindra and 100 e-rickshaws from Kinetic in the Maharashtra city. National Thermal Power Corporation, the state-run power giant, has also set up India’s first electric vehicle charging stations in Delhi and Noida.

This policy shift is also evident by the statements made by power minister Piyush Goyal that soon all government officials and agencies will be using electric vehicles only. According to him, the goal of the government is “to have no diesel or petrol car sales in the country by 2030”. According to National Institution for Transforming India, also called NITI Aayog’s road-map, our mobility industry will be driven by three pillars — “shared, connected and electric”. Not only will this reduce our dependency on oil imports, it will also lead to savings of almost US$60 billion in energy costs until the estimated period.

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