The passenger car market is expected to double in the next four years to touch the 2.4-million vehicle mark.
Likely to touch the 2.4-m mark in the next four years
NEW DELHI: The passenger car market is expected to double in the next four years to touch the 2.4-million vehicle mark. Even though car makers are buoyed by prospects of a rapidly expanding market, capacity constraints will play spoilsport. Be it small cars, sedans or premium cars, manufacturers are struggling to meet surging demand.
Sample this: there is a six-month waiting period for anyone wanting to buy a Toyota Camry, three-four weeks for a Honda City, and even a Tata Indigo is not available off the shelf. In this scenario, it will be difficult for car manufacturers to meet the increased demand over the next three-four years unless a simultaneous capacity expansion programme is put into motion.
Dilip Chenoy, secretary general, SIAM, "Not just small cars, the demand for B and C segment cars is also increasing and manufacturers have started expanding capacities to match this. India produced 1.2 million passenger cars in 2005-06 and this number is expected to cross 2.4 million by 2010. We are looking at double digit growth by then, in line with the economy's growth."
Keeping these statistics in mind, almost all car makers are racing against time to get their production act together. While Maruti Udyog (MUL) is adding 2.5 lakh vehicles to its existing capacity of 5 lakh over the next two years, Hyundai Motor India has already added a third shift at its Chennai plant.
The company is also building a second factory, close to the existing plant, with an installed capacity of 3 lakh units. Tata Motors is setting up production facilities for its Rs 1 lakh car, which is expected to roll out by 2008.
Also, Japanese companies such as Toyota and Honda are leaving no stone unturned in their quest to increase marketshare. Honda Motor Co president and CEO Takeo Fukui said the company will double its India capacity to 1 lakh units by 2007, three years ahead of schedule. "Honda will also consider further expansion to accommodate future growth in customer demand," he said.
Meanwhile, General Motors (GM) and Toyota are scouting for land to put up their respective manufacturing plants. Both these companies are looking for a bigger play in the small car segment.
While GM has already announced expansion of its Hallol facility to 85,000 units this year, the company has also been candid about its plans for manufacturing small cars here. GM is already in talks with several state governments for setting up a manufacturing plant for the purpose. Toyota is also setting up a second manufacturing plant for small car venture in India.
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