Indian super-compact car market overtakes Japan

by Dave

If there are stringent local emission mandates, this could encourage manufacture of sub-compact hybrids. Hyundai and Suzuki have already made India their global hub for small cars.
The Associated Press

Less noticed is the fact that India will top Japan for the first time in sales of super-compact cars. It overtook Japan as the world’s number one producer of basic cars in 2007.

Automakers like Ford, Nissan, Volkswagen, General Motors, and China’s Shanghai Automotive Industries Corp. are pouring hundreds of millions of dollars into the country, hoping to capture a piece of the growing market for tiny, inexpensive passenger vehicles. As they do so, they are quietly transforming India into an export hub for small car manufacturing. More than 892,000 basic cars — the smallest category of passenger vehicle — will be sold in India this year, up 14 percent from last year and surpassing the 708,034 forecast for Japan, according to J.D. Power and Associates.

Unlike China, Russia and Brazil, where consumers buy a range of cars, from basic to luxury, Indians overwhelmingly prefer small, affordable cars.

Drive down the streets of a typical Indian megacity, where the bulk of car buyers live, and it’s easy to see why. Millimeters count. Drivers squeeze through any remotely plausible opening on the clogged streets, grazing handcarts, bicycles, cars, pedestrians and livestock in the process. And price matters. Executives say most Indians won’t spend more than $8,000 on a car.

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