The Indian Auto market is witnessing cut throat competition in small car segment. World’s leading car makers, Toyota has launched its Toyota Etios Liva hatchback its first entry in India’s small car segment and is based in Toyota Etios sedan platform. Toyota knows that India is world’s second fastest growing auto market and is important for expanding its global footprints.

Some of the popular models of Japanese carmaker, Toyota are Toyota Corolla Altis, Toyota Innova and Toyota Fortuner. For manufacture of Toyota Liva and Toyota Etios the company has established its second plant in India. The company has scope to grow in India as Japan and U.S. auto markets are saturated.

Every leading Auto company is targeting at India for its growth and their major focus is the small car segment. Evidently, some recent launches by leading auto companies are Volkswagen Polo, Ford Figo, Chevrolet beat, Hyundai i10 and Chevrolet Spark.

India’s largest carmaker, Maruti Suzuki is also working on seven models of compact cars. Tata Motors with its smallest and cheapest car Tata Nano is doing well and Company is now planning its diesel variant.

For Indian buyers Bajaj Auto has also developed a prototype for a four wheeler.

According to analysts, India is growing markets for automobiles and since major population can only afford small cars so this segment is targeted by automobile giants. The other factors making small cars more popular not only in India but worldwide are growing congestion, increase in fuel prices, environmental concerns among youngsters and stricter emission norms.

The Society of Indian Automobile Manufacturers reports, the expected growth in India’s passenger car segment is of 16% to 18% in 2011-2012 over the previous year. In India, almost 75% of total sales are in small car segment.

The car buyers are attracted to India not only because of its car buyers but also due to its cost effective and talented labor. Due to low cost manufacturing base, the leading auto makers are seeing India as a strong innovation hub.