Competition to heat-up as biggies gear up for small-car launch

Come 2010 and the small-car market is likely to witness intense competition with at least four new players set to launch their products in the market.

General Motors India, Ford India, Nissan Motor India and Volkswagen India are gearing up to launch their small car models — the Chevrolet Bear, the Ford Figo, the Nissan Micra and the Volkswagen Polo, respectively.

"There will be intense big competition among the small car-makers. Customers will now be able to select both their brand as well as pricing. Existing players like Maruti and Hyundai, will have an additional advantage over the new ones," Rakesh Batra, National Automotive Leader of Ernst and Young, told PTI here.

Each player will target a 10-15% market share in the first year of launch, Batra said.

The Nano from the Tata group stable has already hit the Indian market and enjoys the first-mover advantage. However, it remains to be see how it copes from competition from the auto-majors in the small-car segment.

Sales of small-cars is expected to be brisk in the first year itself. "While competition will continue over the next three years, there will be sales of more than two million cars within one-year of launch," a Bangalore-based auto analyst, Salil Barua, said.

The overall auto market in the country will grow with the entry of new players, Barua said.

India's auto industry is amongst the first sectors to recover from the global economic slump. Auto sales have surged 18% to  7.8 million in the eight-months from April to November.

Passenger vehicles' sales have gone up 21% to 1.2 million units.

"New entrants will dominate the market but it will not affect the existing players much. However, the picture will be clear only after the new cars are launched," Fiat India's CEO, Rajeev Kapoor, said.

Fiat plans to launch its small car in 2011.