There was once a time when India’s mode of transportation was referred to in German industrial circles as the ‘world’s bullock cart’. But now things have utterly changed.
At the 63rd IAA that concluded on Sunday, it has been noticed that the German car makers are very much interested to be a part of the ever growing Indian car market. One of the reasons is these car manufacturers are having a tough time in the markets of Europe, Japan and the US.
German carmakers are trying to grab the attention of the markets in the so-called BRIC (Brazil, Russia, India and China) countries. And India is the favourite destination of the global car makers as the country clearly stands out with a large cash-rich middle-class whose appetite for luxury products, including foreign brand-name cars.
Hence it was no surprise that India was the centre of attraction at the Frankfurt’s International Motor Exhibition, popularly known by its German acronym IAA. Moreover, a special India Day was organised to highlight the opportunities and challenges of the Indian market.
The ten-day Frankfurt Motor Show which ended on 27th took place under a dark and uncertain atmosphere because of the dismal economic condition as a major crisis still continues to haunt the West’s automobile industry.
Germany’s car industry continues to bleed with declining sales and revenue therefore the German carmakers feel that one “simply cannot bypass the future market India”. To highlight the market potential, it has been mentioned at the India Day that whereas one out of two Germans drives a car, in India the ratio is 11 cars to 1,000 people.
India is at present the world’s eleventh largest automobile producer and is poised to take up the seventh position by 2016.
Moreover, Management consultancy Deloitte predicts that by 2020, consumers will prefer small and energy-efficient cars and production will take place mainly in Asia, another reason to woo India. It has been predicted that turnover volume in the Indian market in the coming seven years would rise from $36 billion to $115 billion. That would account for a 10 per cent share of India’s GDP by 2016.
The number of workers directly or indirectly employed by the automobile industry would double to 25 million.
Besides, it has been revealed that Europe’s and Germany’s number one car maker Volkswagen will join hands with Japanese carmaker Suzuki which has a tie-up with India’s Maruti.
Indian carmakers at the Frankfurt event appeared confident and bullish, buoyed by the unprecedented attention they received at the exhibition. Consultancy firm Management Engineers has estimated that India’s small-car market is the world’s second fastest growing after China.
The annual growth rate, it says, is 7-8 cars per 1,000 residents in India. Small cars presently account for some 61 percent of India’s automobile market while vans and SUVs make up some 13 percent.
But German automobile experts are aware that India is not a “cakewalk” and German automakers such as Audi, BMW and Daimler have experienced that Indians wanted “the best product at the lowest possible price”.