New compact-cars to keep the growth momentum alive

The Indian automobile industry has become one of the fastest growing auto market in the world with receiving high sales figures in the consecutive 5th month of this year. It's May and car sales figures are pouring in from every segment of the cars. The organization of Delhi auto show in January this year, has proved a foundation stone for Indian auto industry as the high demand momentum raised at that time is still going on at a good pace.

The main contributor to this growth was the passenger car market, which accounted for more than 78% of passenger vehicle sales in FY 2010. Still, the market has the high growth potential as passenger car density was around 11.6 per 1,000 people in 2009. To make the most of this opportunity major car makers in India including Maruti, Hyundai, Tata, GM, Ford are going through the capacity and dealership base expansions.

Moreover, the growth of passenger car industry has been strongly influenced by the performance of the compact car segment. The rise disposable income of consumer of middle class has shifted the growth momentum towards the small cities and districts. The premium hatchback segment, which accounts for a large chunk of auto sales in India, has become highly competitive with the entry of many popular cars including Chevrolet Beat, Ford Figo, Volkswagen Polo and New Maruti Wagon R. It is expected that the high growth momentum will continue throughout the year, with a number of new car launches are scheduled in the second half of this year, that are Nissan Micra, Skoda Yeti and Toyota Etios. 

The premium hatchback segment, which accounts for a large chunk of auto sales in India, has become highly competitive with the entry of many popular cars including Chevrolet Beat, Ford Figo, Volkswagen Polo and New Maruti Wagon R.