Saturday, June 14, 2014
By Kamal Swami
German car makers emerging as threat for Japanese car makers in Indian car market
For Japanese auto makers that sell some of India's most popular cars, the luxury market has been a challenge they couldn't master. Pushed to the edge by the big three Germans, some of them are quietly leaving the space. Suzuki Motor's local unit Maruti Suzuki, which sells nearly one in every two cars in India, withdrew its top-end Kizashi sedan from the market. Late last year, Honda Motor dropped the Accord from its product portfolio here — just 272 Accords were sold in the fiscal year through March 2014, less than half the number the previous year.
A year earlier, the company stopped producing the Civic sedan in India. Nissan Motor has withdrawn its flagship Teana sedan to concentrate on mass-car models, after selling just 47 units last fiscal year. Toyota Motors, the world's largest carmaker, has put its plan to bring the marquee Lexus brand to India on the backburner.
Small cars — hatchbacks and compact sedans — account for about 70% of India's passenger vehicle market, where just over 25 lakh vehicles were sold last year. Because of India's preference for fuel-efficient vehicles that are cheap to own and easy to maneuver in congested cities and narrow village roads, most auto makers here have been focusing on the small-car segment. But luxury vehicles offer higher margins, and launching of highend vehicles helps companies showcase their latest technologies and boost brand image.
Read complete story on Economic Times.