Auto companies see Auto Expo as the next big thing

Thursday 05 January 2012, 11:24 AM by

The Auto Expo 2012 that starts from 5 th January is expected to break all records with 42 global vehicle brands gearing up to display their products in front of visitors. Moreover, eight international brands will be introduced at the Auto Expo, of which BMW MINI surely deserves a special mention.

The utility vehicle segment is expected to get new cars that would eventually strengthen its base in the Indian market. In spite of being known for producing small cars at large-scale, India will witness a significant expansion in the utility vehicle segment as its share in the market is likely to double by 2020.

The 11th edition of the Auto Expo will take place at a time when the whole economy struggles to survive against the unfavourable trends that have also caused a serious slowdown in the auto sector. Though worldwide car sales has fallen sharply, the Indian and Chinese car industries seem to be the fittest contenders. Between 2001 and 2010, car sales in Brazil, Russia, India and China (BRIC) saw an average year-on-year growth rate of 8.8%, 5.7%, 14.5% and 34.3% respectively.

The domestic car companies will come up with 24 new models that are expected to stand apart in the market in some or the other way. The two-wheeler segment will get eight new models exhibited by major companies. This time, the main focus of car companies will be on producing vehicles that are environment friendly. The National Mission Plan for Electric and Hybrid Vehicles, an initiative of the Indian government, will play an important role in promoting fuel-efficient and cleaner technologies in the country.

Mahantesh Sabarad, Senior Vice-President, Equity Research, Fortune Equity Brokers (India) Limited, said, “SUVs are bound to grow as income levels go up. We will see more and more proliferation of such kind of vehicles in the market.” He further stated that “SUVs are forming a larger chunk of the market. It will account for 15% of the total market in the next 10 years. Other utility vehicles would continue to grow further.”

Unlike the upcoming Auto Expo, the previous event saw a range of small cars making its way to the stands of most car makers, be it local or foreigner. In view of the current trends, Booz & Company and the Society of Indian Automobile Manufacturers (SIAM) foresee the number of electric vehicles running in India to be more than seven million by 2020.

As per the strategies formulated during the last budget, the government had set up National Council for Electric Vehicles, led by Praful Patel. It ensures that every state makes use of common regulations. The National Mission Plan for Electric and Hybrid Vehicles also aims to popularise electric technologies and reduce the use of fossil fuels.

Vishnu Mathur, Director-General, SIAM, said, “Pressure from regulators and consumers across the world has made fuel efficiency an immediate priority for all the companies, keeping in mind the environmental impact and the cost of running vehicles. Such a far-sightedness on behalf of the government augurs well for the industry. This will be the first edition of Auto Expo that will have a larger focus on alternative fuels. The Indian auto industry seems to be evaluating two paths in its move towards greener vehicles—CNG/dual fuel vehicles and electric/hybrid vehicles.”

The auto sector is showing signs of improvement as innovation, advancement and variety are being used to regain lost grounds and secure the future simultaneously.

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