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India to become global hub for developing small cars
By siliconindia
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Wednesday, 11 July 2007, 19:30 IST
Pune: IBM in collaboration with the University of Michigan released the findings of their study titled "Inside India - Indians view their automotive future".
While releasing the findings of the study, Rajesh Nambiar, Vice-President and General Manager, Global Delivery, IBM India, and Sanjay Rishi, Global Business Services, IBM, said that it must have better transportation infrastructure, improved product quality, more skilled workers, changes in labour and tax regulations and an increase in the scale of exports of automotive companies, if India is to meet the demands of the global automotive industry and evolve into a destination for automotive production and sales.
Mature vehicle financing system was one of the key observations in the study. It provides support for the industry and 40 percent of executives interviewed for the study said that financing played a major role in vehicle sales and would change only marginally in future.
The inability of the financial institutions to assess risk of potential countryside buyers and lowering interest rates to match the Western countries were the two areas that could affect growth. The study revealed that the main purchasing factor over the next five to ten years would be the brand image and status as well as the increased buyer sophistication in evaluating what the vehicle has to offer even though the existing purchasing priorities revolved around factors such as price and fuel economy.
According to respondents, consumers would strike a balance in terms of performance, features and safety while at the same time they consider price and fuel efficiency of the vehicle. The study noted that India could become the global hub for the development of small and inexpensive cars.
By 2010 and 2015, the industry estimates a doubling and tripling of four- wheeler sales. The number of four-wheelers sold in 2006-07 was about 1.4 million and a doubling (2.8 million) and tripling (4.2 million) would make India one of the top ten countries in terms of vehicles sales.