Trends: Small car - Indian automotive sector is a myth

‘Small cars, not the only way forward’

The belief that the small car is the way forward for the Indian automotive sector is a myth, and the country should not be restricted to becoming a manufacturing hub for small cars, Dr Pawan Goenka, President, Automotive sector, Mahindra and Mahindra Ltd, has said.

“Why only a small car? The way forward for India is in designing large cars with the same fuel efficiency as small cars. So small is not exclusively beautiful in this respect,” he asserted. Elaborating, Dr Goenka said the current measures to determine ‘small’ needed to be revised to be more meaningful.

“There is a tremendous push on length of the car to determine what is small. We need to look at parameters that matter. Fuel efficiency or carbon footprint, for instance,” he said.

“Several diesel MUVs have fuel efficiency that is comparable to the small car. But because of the laid down parameters on size, these are categorised as luxury vehicles,” he said, adding that the most direct hit of this categorisation was on the excise duty.

According to the Automotive Mission Plan, by 2016, India will emerge as the destination of choice in Asia for the design and manufacture of automobiles and automotive components. The output of India’s automotive sector will be $145 billion by 2016, contributing to 10 per cent of India’s gross domestic product and providing employment to 25 million persons additionally. The turnover will rise from $35 billion to $145 billion, while exports are expected to go up from $4.1 billion to $35 billion.

At present the USP of Indian cars is that they are low cost, Dr Goenka said. “We need to move away from that to becoming technologically better, while maintaining frugality,” he added.

January 27, 2009
Source: Sify
URL: http://sify.com/finance/fullstory.php?id=14845431