Automakers to launch new models, spend more in India


Global automakers in India are planning to launch new models and boost investment in the country, executives said at a conference, signalling brisk demand in one of the fastest growing car markets in the world.

French car maker Renault's Indian unit will launch five cars between mid-2011 and mid-2013, including small cars in 2012, its India head said at an industry conference on Thursday.

Toyota's India unit expects to sell 63,000-64,000 Etios compact cars in 2011, Deputy Managing Director Sandeep Singh said. The Etios has been designed specifically for the Indian market and will be launched towards the end of 2010.

The compact car segment in India, with cars measuring between 3.4 to 4 metres in length, is rapidly expanding and accounts for more than 70 per cent of the total car market.

Narrow roads, heavy traffic and lower prices make compact cars attractive to the country's rising middle class that is looking for ways to spend its increased disposable income amid galloping economic growth. India is seeing a near 35 per cent growth in car sales with more than half a million cars already sold in the first four months of 2010-11.   Renault's small cars will be built on alliance partner Nissan's platform, Country General Manager Marc Nassif said. The cars produced at its manufacturing unit in the southern Indian city of Chennai, built jointly with Nissan, will be Renault-branded, and would be competitively priced, he said.

Though top carmaker Maruti Suzuki still holds sway, global majors such as Toyota, Honda, General Motors, Volkswagen and Ford are eyeing the lucrative small-car sector.

Maruti Suzuki, in which Japan's Suzuki Motor Corp holds a 54.2 per cent stake, is seeing strong sales in August, its marketing and sales chief Mayank Pareek said.

General Motors' Chevrolet Beat and Ford's Figo compact cars have already seen runaway sales so far this year.

Nissan, which is 44 per cent owned by Renault, has started selling its compact Micra cars since June.Separately, Renault-Nissan is working with Indian two-wheeler maker Bajaj Auto to make a low-cost car, which would be designed by Bajaj and launched by end-2012.   INCREASED SPENDING

Joe Hinrichs, Ford's president for the Asia Pacific region and Africa, said the company expects an opportunity to expand capacity in India as the market grows.

Ford, which had earlier announced a $500 million investment for India, will need fresh investments if it expands capacity.

The company is planning to introduce eight new vehicles in India by the middle of the decade and will start exporting its best-selling compact Figo cars from India to 50 new markets next year, including Mexico, north African countries and the United Arab Emirates.

"We are making a bigger bet in India," Hinrichs said.

The Indian car unit of Honda will launch a compact car in the second half of 2011 and will initially roll it out of its facility near New Delhi.

Honda Siel, which makes and sells cars such as the Jazz hatchback and Honda City sedan, is expecting double-digit sales growth this month, marketing head Jnaneswar Sen said.