My Big India My small Car
The rupee one lakh car is now very much on the streets and as well as in the garage of many thousand Indians. The small car market was discovered by TATA motors. It was discovered by Maruti. Yes that company made the first mark on the Indian consumer mind that one can be an owner of a small car. The Indian stock market took the hit that Volkswagen AG’s Polo and Ford Motor Co.’s Figo — the new kids on the block — have found more buyers than both companies initially expected. Nissan Motor Co. and Toyota Motor Corp. have also lined up their own small car markets. This will reduce or eradicate maruti from the market. Sorry to say and disappoint all my speculator friends that still now maruti holds 50% of the small car market .

The following crunching of numbers will make it more clearly about the Maruti small car market position currently held by it:

• The Delhi-based automaker’s bestselling model Alto clocks sales of 17,000 to 18,000 units per month on average.

• Compare those five-digit figures with Ford’s April sales of 7,509 vehicles, a record monthly figure boosted nearly threefold by strong sales of the Figo, its maiden small car in India. Volkswagen is not far behind with its Polo model receiving bookings of 7,300 units in the two months after its launch. Both are still a good way below Maruti’s numbers.

The Indian automobile market is now the most favored detonation of doing sales as well establishing manufacturing house in India. Every company wants to take advantage of the Idnian consumer market.

Indian Consumer mind have taken major changes in making India to dream the GDP growth of 10%.The urban population in India is India is currently 30% urbanised, while 70% of consumers are still in rural India. As far as consumption goes, 404 Million are either consuming or are aspiring consumers. One of the prime reasons for a one way growth in consumer product market is higher percentage of savings. Indian currently have savings a rate of 36.8% as compared to 28.4%.This high savings rate is making the one way growth of consumer product market. Higher per capita income, radical changes in the salary and business income growth opportunities are making the Indian consumer market to propel like mango groove.

So its well clear than India will be a pool of funds in the automobile sector and the competition in the coming days will not bring smile on the face of the companies. Domestic companies have to find and compete with innovative ideas and concept to deal with the overseas competition.

One thing is granted that Indian consumers will have new tastes and new demands as they have an never ending income generating force. In other words India possess the highest number of young generation of income holders whose taste and preference are enough to be tempted. What the automobile companies needs to understand is the way of luring that temptation. Just imagine Maruti the company which enjoyed the premium by simply changing the mindset of the consumers and asking them to dream and convert the dream of having a Car in front of their house.

Today the competition is fierce and in the coming days it will be very hard to say by gazing at the crystal ball about the future of the domestic car companies in India. Small is the only concept being produced in factories and companies are just feeling impossible to increase their market share at a rocket speed. But all these will be sound of good music till the crude price remains under the mark of $100.Once this start climbing along with the India petroleum prices the sales of automobiles will take a major hit. This sector growth will increase the demand of steel and auto ancillaries market. But one should be very careful taking a short term outlook of growth for this sector.
2011 Investments Strategies.
According to the Investment Commission of India, India is among the most competitive manufacturers of auto components in the world. India is turning into a global hub for research and development (R&D). Companies like Daimler Chrysler, Bosch, Suzuki and Johnson Controls have set up development centres in India. Many international auto-component majors including Delphi, Visteon, Bosch and Meritor have set up operations in India. Auto manufacturers including GM, Ford, Toyota, etc. as well as auto component manufacturers have set up International Purchasing Offices (IPOs) in India to source their global operations. Apart from all these there are number of new plans of investments standing at the door. A few glimpses of all those are here given below:

• German automotive components company, Wallstabe & Schneider, has established its Indian presence by signing a joint venture (JV) agreement with Thane-based Mecnam Products and Mumbai-based Deshmukh Rubber Works Pvt Ltd.

• The world's largest automotive component manufacturer, Bosch, plans to invest US$ 433.5 million in India over the next three years. "India will be an important market for the company in the immediate future," said Bernd Bohr, Chairman of the Stuttgart-based Bosch Automative Group.

• Tyre manufacturer, Apollo Tyres Ltd, is set to make Chennai its manufacturing and research and development (R&D) hub and is establishing a US$ 433.6 million manufacturing facility, which is likely to see an additional investment of US$ 130.09 million.

• Now one might say that these investments might take some time as global liquidity and other factors might be a cause. I would like to clear one thing Indian market consumer resources are now the life Blood of the Entire Global Consumer and corporate market. So even if there is a short term hiccup the long rider is very sweet and will be memorable for the Indian automobile market History.

Policy Initiatives

The government has taken many initiatives to promote foreign direct investment (FDI) in the industry.

• Automatic approval for foreign equity investment up to 100% of manufacture of automobiles and components is permitted

• The automobile industry is delicensed

• Import of components is freely allowed

The Ministry of Heavy Industries and Public Enterprises has envisaged the Automotive Mission Plan 2006-2016 to promote growth in the sector. It targets to:

• Increase turnover to US$ 122 billion – US$ 159 billion by 2016 from US$ 34 billion in 2006

• Increase export revenue to US$ 35 billion by 2016

• Provide employment to additional 25 million people by 2016

• The automotive sector is expected to contribute 10 per cent of the country's GDP by 2016

According to ACMA,

• Overseas auto-component manufacturers, especially small and medium enterprises (SMEs) should invest more in capacity enhancements and Greenfield manufacturing in India to meet growing domestic demand for auto-components

• Investments in Auto-IT sector is a high potential area

• To encourage new wave of partnerships at the Tier 2/3 level covering the entire automotive supply chain to address not only product technology, but also "Process Technology"

The introduction of new taxation laws like GST and DTC will spur the market growth of these sectors. Automobile will find growth equivalent to other sectors but with little hiccups in between. A higher margin of disposal surplus due to New Direct Tax code will enable consumption demand of Indian economy to take new shape and size. GST will add up in bringing in better pricing and margins to the automobile industry. GST is expected to bring down cost for the industry, which is currently marred by endless taxes charged at different state levels. If experts are to be believed, the cost savings will run into double-digits for the sector. GST will eradicate those small tax windows and lead to seamless travel of products from one state to the other. It would remove multiple taxes and bring forth the right value of the products. This will also increase the growth of the sector in the coming quarters and specially after April 2011.

The international crude price affect on the Indian consumer minds remain on high alert. Investors across all corners will find growth form the industrial investments as well as stock market. Small car market companies along with new diversified products and new market products will be flavor of Indian automobile company.Crude prices are to be taken as short term hiccups and there is no sign of immediate reach of it to the mark of 100 dollar/barell. So plan your car and your investments and ride it for long.