Friday, January 08, 2010

India as small car hub


Glitz , glamour and sleek metal are de rigueur at automobile exhibitions. This year’s Delhi auto show has all these, and a surprise something

The frisson that the Nano created at the last edition of the Delhi Auto Expo is absent this year, but there is a closer focus on business, with auto part makers from China, besides the global auto majors, eager to strike new deals, new alliances. This is all to the good. Auto majors such as Toyota and Honda are making small cars specifically targeted at the Indian market. India’s preference for small cars might be a function of constrained budgets. But small cars are likely to be the world’s choice as well, given the new realities of rising oil prices, greater awareness on climate change and growing personal commitment on the part of individual citizens around the world towards minimising their carbon footprint .

So, if small cars that are frugal in fuel consumption and still deliver on performance — that’s how small cars have to be, to sell in India — get built for India, in India, they’d eventually end up getting exported to the world. Already , Suzuki and Hyundai use their Indian facilities to produce small cars for export. So, the feasibility of producing quality automobiles in India for the world market is not in question anymore. But achieving scale is yet to be fully demonstrated. This is where all the component manufacturers come in.

Component manufacture is no longer a low-tech business, but remains preponderantly a small-tomedium enterprise activity. There is enormous scope for auto components for India-based production of small cars to absorb both entrepreneurship and manpower. Competition from abroad, including from China, should be welcomed , to realise quality and scale.

Source : http://economictimes.indiatimes.com/Editorial/India-as-small-car-hub/articleshow/5418592.cms


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