Indian car market encompasses a tremendous scope for growth, which is one of the reasons it has become the focus of several companies. With so vast population, the number of opportunities on offer for car makers are incredibly high. India is a country comprising metropolitans, towns and rural areas, which automatically means that there is wide variety of vehicles being driven. In past three decades, the Indian car market has made terrific progress in terms of sales, number of auto companies and technology. The consumer situation in India has transformed drastically as cars have, now, become quite common unlike earlier times, when they were considered a luxury.

Several reasons have led to the transformation of Indian car market, making it one of the most prominent industries in the country. Over the years, income levels of people have increased and as a result, their standards of living have also improved. Simultaneously, the need of cars, understandably, grew along with the rise in social status. In the past two decades, the working class has become the focus of most automobile manufacturers operating in India. Possessing a vehicle has, in the modern day scenario, become a regularity for a family living in city. Also, purchasing new car is seen as a sign of progress a person has made economically.

A hatchback, typically, represents the consumer choice in India, which is influenced by factors like fuel efficiency, affordability and suitability to conditions. Success of hatchbacks can be seen in the reports and statistics prepared by the industry body, which have revealed that companies dominating the market rely heavily on this segment. Apart from the working class, there are several car enthusiasts in the country who have a strong economic position, thereby can afford to purchase luxury vehicles. The presence of rich class has created a demand for luxury cars across the country and subsequently, opened the doors for several internationally renowned car manufacturers.

Initially, there were limited companies operating in the India with some of them being based domestically. However, after the economic policy revised in 1991, foreign car makers started making their way into India to explore the kind of potential the market possessed. Another trend that has been going on for a while in India is the collaboration between a top international car brand and a domestically based auto firm. It has augured well for a number of firms and some of them are currently enjoying a dominant position in the country.

Foreign car makers have had a mixed run in India with some performing exceptionally well while the others failing to make much of an impact despite being present for a number of years. Now, there are certain factors that influence a foreign firm's performance in India. To begin with, it is a great benefit if the car maker is based in a country that has similarities with the Indian market, which helps in better understanding of the conditions for planning. This is a major reason why companies from Southeast Asian countries have been able to create a name for themselves in India.

With the advent of technology and superior mediums of research, companies have been able to analyse the kind of product line they should have in India. Broadly categorising, there would be two types of auto makers operating in the Indian car market. First are the ones that want to generate sales on a high level and establish their dominance. The other section would be companies that have a niche market and do not target masses. Firms falling in the first category always look to have a holistic approach, which includes aggressive advertising campaigns, extensive dealership network development and establishment of production facilities. Having a self owned production plant helps a company to reduce cost and thereby, price a newly launched vehicle aggressively. On the other hand, the second category of car makers have limited dealerships and expect their vehicles to sell themselves without the need of much advertising or promotion.

To put things in a nutshell, the Indian auto industry has been constantly progressing with almost all major car makers operating in the country. This has been the result of rising incomes of people and their demand for new cars. In fact, the past few years have seen a whole bevy of new vehicles from different segments being launched in India, a trend that is likely to continue for coming years. According to a recent report, companies have started making India their base for production, owing to low cost of labour. After manufacturing vehicles in India, firms are exporting them to other international markets, which is being seen as a positive sign by experts. In addition, some auto makers have plans of completely conceptualising, developing and manufacturing cars in India.

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The Indian car market, just like the country's population, is huge, diverse and totally dynamic. Therefore, consumer choices in terms of vehicle type in India vary drastically, starting from a compact low-priced car and ending at top notch luxury model. However, over the years, certain buying patterns have been spotted in India, wherein people have an affinity towards particular segments. The hatchback segment is the most popular segment of the Indian auto market due to a number of reasons. A hatchback, which is said to be compact, fuel efficient, affordable and ideal for Indian road conditions, totally represents what a buyer in the country looks for in their car. For this vary reason, companies manufacturing hatchbacks have dominated the passenger car market in India.

Sedans, usually associated with luxury, also have a decent market in India with a number of them enjoying great success. Mostly driven in cities, sedans come in different types, ranging from compact to top class luxury models. Along with, the Sports Utility Vehicle (SUV) segment, for a number of reasons, has been able to carve a niche for itself in the Indian car market. SUVs are comfortable, powerful, spacious and have a commanding road presence. In addition, they have the ability to perform well in unfavourable terrains and weather conditions. Apart from this, owning an SUV is a perceived symbol of a person's status, especially in a country where there is a high level of economic disparity.

A compact SUV renders the performance of a utility vehicle and provides the luxury of a sedan along with being suitable for driving in city traffic. Notably, a few compact SUVs have also managed to shape a tremendous comeback for their respective manufacturers. Coming to the van and minivan segment, it has not been able to make much name in India with most of them being used for commercial purposes. Pricing can be stated as the biggest reason why the this segment has not been able to do well in auto space. Additionally, the minivans available in the country are unable to appeal customers in terms of appearance as well.
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New Cars By Fuel Type

With recent upsurge in fuel prices, car makers in India are now resorting to use available fuel options to boost their sales. In a fast expanding auto market like India, which is currently going through a repressive phase, the competition is getting tougher day by day. As a result, major auto makers are devising new strategies with an aim to counter the low sales. In India, companies are offering cars in different fuel options like diesel, petrol and CNG/LPG in order to cope up with the changing consumer sentiment.

Petrol cars may have more refined engines than diesel ones, but major demerit of the former has been its lower fuel efficiency as petrol burns faster than diesel. However, petrol cars are known for running at higher speeds than diesel models, which is mainly because of its lighter engines. In a country like India where fuel prices are surging at a high speed, the demand for petrol cars is falling day by day with car buyers now turning towards alternative fuel options. Even the luxury car segment has bore the brunt of price rise with major companies roping in diesel variants to cope up with the market demand.

With higher mileage and a powerful engine performance, diesel cars have taken the centre stage in India in the recent past. With the continuous surge in petrol prices, the Indian market is flooded with several diesel models. Although diesel cars offer economical mileage, they are more costly as compared to petrol models.

An alternative to traditional fuel options, CNG and LPG cars have performed quite well in the Indian car market with many buyers opting for these power sources. Being very economical and cheapest means for running a vehicle, these fuel options are much favoured by the middle-class section of society.
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