Car-a-van rolls

There was a slew of new launches on Wednesday, but little buzz. Indeed, most of the talk centred around a car that wasn't even on display yet - the Tatas' long-awaited Rs 1 lakh car, which will finally be unveiled on Thursday to the kind of media frenzy not seen in India since - well, since the Tatas launched the Indica almost a decade ago. Many people present at the Expo seemed to be simply going through the motions."Tomorrow is the big day," summed up a senior manager with a Chennai-based tractor company.
In the obsession with the Tata car, few seem to have noticed that companies are also lining up to launch several opulent models in India. European carmakers like Audi, BMW, Volkswagen and Mercedes are all eyeing this route. Fiat is planning to sell two fully imported models, one of which is the Cinquecento, its hot selling small car in Europe, which is smaller in size than the Maruti 800, but costs upwards of Rs 12 lakh. Volkswagen will offer its latest generation three-litre electronic diesel engine and Volvo has plans to offer its hard top convertible. Even Honda has launched a premium 100cc scooter targeted at executives. Says Alfredo Altavilla, CEO of Fiat Powertrain technologies: "We believe India is a growing market for expensive cars."
The two strategies may seem a study in contrast. Indian companies like Bajaj and Tata seem to focusing on the lower end of the market whereas foreign companies seem to be enamoured by the growing affluence of the Indian car buyer. Companies like VW say the growing income of Indians will see them buying bigger cars.
There is hard logic behind both strategies. Tata on Wednesday finally unveiled its new Indica, which should ideally have been done a couple of years ago. In the meantime, it lost market share as customers moved on to more modern cars. On the other hand, Maruti has held on to its market share even as new players joined the fray with small cars in the last three years.
The key lies in the fact that making new models is expensive. Unlike their foreign counterparts, which spend billions to globally launch a new car model, the low domestic volume of Indian companies doesn't give them the liberty to change models often. In some ways, Tata Motors is choosing a space which other global car makers will find it difficult to compete in. Earlier, Renault's chief Carlos Ghosn had remarked that only in India could someone dream of making a $3000 car.
Tata eventually hopes to sell 5 lakh of its small car in the "near" term, four times more than the number of Indicas. Bajaj, which sells 3 million two-wheelers a year, hopes to coax a sizeable number of its top end customers to buy its car which will be priced at Rs 1.2 lakh-1.5 lakh. Says Ratan Tata, chairman of Tata Motors: "Our focus is on a market segment hitherto untapped." Whatever the plan, Indian roads will have more cars on them.