India beats Japan in small cars

Hyderabad, Dec. 23: It is official now. Small is beautiful for car manufacturers in India.

India will topple Japan as the largest small car market this year just like China which overtook the US as the world’s largest car market this year.

More than 8,92,000 basic cars — the smallest category of passenger vehicle — will be sold in India this year, up 14 per cent from last year and surpassing the 708,034 forecast for Japan, according to J.D. Power and Associates.

India overtook Japan as the world’s number one producer of basic cars in 2007. Globally, India ranks 10th for total car and truck sales. J.D. Power expects Indian car and truck sales to hit 1.9 million this year, a far cry from China’s 12.3 million. “India is definitely at the focal point from a small car production hub perspective,” said a spokesperson of Maruti Suzuki, the largest car manufacturer in India.

“It has been a long journey. Over the past 4-5 years, more than 70 per cent of cars sold in India belong to the small car segment.”

However, the drive has not been easy for the car companies. The person added, “It has not been as easy as it appears. The industry was hit by recession, when it was at its peak last year. The government support has been a great help. Moreover, we tried to penetrate through rural markets, where growth has been tremendous.”

Owing to a jump in compact car sales, the car companies posted record sales even post-Diwali, normally considered a dull period.