Small Car Demand Rises, Indian Auto Cos Benefitted

author image Satish Kalepu
Sunday 10 May 2009, 00:00 AM

The recent credit crisis has given rise to the demand of small cars around the world. Countries like Germany, the UK, Italy, and South Korea are offering incentives to the customers purchasing small cars. This has proved quite beneficial to India which is world’s largest small car producer. These countries are not only encouraging customers to buy small and more fuel efficient cars but have also devised methods to scrap older gas-guzzling models.

Germany is paying 2500 Euros to those who are exchanging their older models with better and newer models. According to the industry experts, nearly 200,000 cars are expected to be exchanged in Germany alone under this scheme. The UK is also offering 2000 GBP discount on newer vehicles in exchange of older ones. The government aims to replace these older models with new electric vehicles. It is expected that nearly 100,000 cars will be exchanged in London alone.

“Demand for compact cars with low emission norms is rising globally. We have bagged large orders from Germany, France, Italy and the UK, where customers are getting incentives to buy compact cars,” Maruti Suzuki India managing director S Nakanishi said. Maruti’s export orders have doubled to 1.5-lakh cars in the current fiscal, largely on the back of demand from Europe for its hatchback Alto, which is called A-Star in the domestic market. India produces around 15-lakh small cars annually.

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