BOMBAY, 24 November 2003 — The Indian passenger car market seems to be on a highway, speeding without brakes on a fast track. India has indeed come a long way from its days of Ambassador and Fiats. Today, the customer has a far wider choice and from a sellers market, it has turned into a buyers market.

Carmakers from all over the world are setting shop here and more are planning to come. The Indian car manufacturers like Maruti and Tata Motors are developing newer versions in their indigeniuosly manufactured cars. Today, we have reached a stage where India is able to export cars to even the discerning markets of Europe.

The competition is heating up in the car market and all the existing carmakers are planning new launches or are upgrading their existing versions in a bid to collide with competition head-on.

Undoubtedly, the market leader in passenger cars, the small car segments, is Maruti. It is now planning to launch a brand new Zen in the domestic market in the current financial year to consolidate itself in the small car segment. Analysts say the new look is intended to help MUL boost Zen sales, which was being cannibalized by its other B segment models (Wagon R and Alto) and competition from Hyundai Santro and Tata Indica, the other B segment models.

In the C segment, there is fierce battle royale between Hyundai Motor India and Honda. The former’s mid sized sedan Accent clashes head-on with the recently launched New Honda City. Accent comes with 1,599 cc engine (New City displacement is 1,497 cc) while the maximum horsepower is 101BHP/5800 RPM (77 BHP/5000 RPM). The important thing is the price. Accent GLS is Rs.6.22 lakh while New City is 6.67 lakh.

Hyundai has also launched the Accent CRDi which is for those looking for fuel and cost efficiency. It is a diesel car but the company claims that the performance is as superior as a petrol one, while the fuel cost per kilometer is roughly half of Honda City.

Hyundai’s offerings in India include the Santro Xing in the B segment, Accent in the C segment, besides Sonata in the E segment and the sports utility vehicle Terracan.

Notwithstanding competition from Honda, Hyundai is all set to launch the Getz on the Indian roads. Currently, the company is road testing the car for durability and is expected to be on the roads officially by mid-2004. Getz will be sporting a 1.3-liter petrol engine to fill the gap between the B and the C segments.

In the C segment apart from these two, there is now a choice galore for the discerning buyer. There is Maruti’s Esteem, Fiat’s Siena, Ford’s Ikon and GM’s Optra. And to win customers, all these carmakers are using a lot of tactics. Hyundai Motor and Ford India are offering free insurance and CD/music system for the Accent and the Ikon to woo customers.

Despite this, finance companies insist that both these companies are facing order cancellations/delayed payments. And this, they say, is mainly due to the arrival of the Honda City model.

Europe ‘s largest vehicle manufacturer Volkswagen (VW) is betting big time on its Czech subsidiary Skoda for its India plans. VW, like BMW has not made an independent entry into the Indian market, it is now evaluating the possibilities to build on the presence of Skoda India which is a part of VW group. Also, Skoda India’s manufacturing facility at Aurangabad is being positioned as a key constituent of the group’s future plans globally. The plant, with an annual capacity of 15,000 units initially, is scheduled for a formal launch in February next year. Importantly, it will be Skoda’s first manufacturing base outside Europe and might be used as a sourcing hub for global exports in future.

Infact, Skoda already sells Octavia in the lower end of the premium segment in India. It is now planning to introduce Superb in super luxury car segment, alongwith L&K and Octavia Automatic in the first quarter of next year. Though, the company is planning to launch its 1.4 liter Fabia with 110 BHP in the next calendar year, it is yet to decide on its categorization.

Apart from small cars and utility vehicles manufactured in India, there is now a growing market for imported SUVs. Over 900 SUVs were sold in India this year.