White Paper

7 May 2009 Media 21

“The web delivers the best ROI for marketers seeking travel customers”

G Travel marketing and the internet, page 24

ANALYSIS 5

Top brands by sales

February 2009 Growth %

Small cars drive India’s motor industry growth

With one of the lowest car-ownership rates in the developing world, the market is there for the taking, reports Glenn Smith

SECTOR INSIGHT

ndia is a land of automotive portent. Last year, Tata Motors bought glamour icons Jaguar and Land Rover. Now, in a coup de grace allowing it to span the extreme high and low ends of the market,the company has delivered the Nano, which, priced at Rs123,000 (US$2,400), is the world’s cheapest car. On 9 April, the day that Indians lined up to fill out applications for the first batch of Nanos, due for shipment on 1 July, the Bank of India was softening loan terms to encourage buyers. India is a nation where car sales are financed and credit has been tight.In February, to reverse a sales decline that began last October, the Government announced cheaper financing, and that same month sales of light vehicles jumped 24 per cent. “Growth in February was due to banks providing more credit and lowering interest rates for vehicle buyers,” says Ammar Master, senior market analyst for India and Korea, JD Power & Associates. “This is why Tata Motors, MarutiSuzuki and Hyundai have tied up with banks for vehicle financing.” India has one of the lowest car ownership rates in the developing world. Ownership is 9.5 per 1,000, according to TNS India. Most new car buyers are making the shift to four wheels, from two- or threewheelers.Automobiles account for only 16 per cent of vehicle sales, with the dominant means of transport being the motorcycle, which last year accounted for 75 per cent of market volume. The official outlook is upbeat. While other car markets sink into oblivion, Society of Indian Automobile Manufacturers’ directorgeneral Dilip Chenoy predicts growth of three to five per cent for passenger...