Maruti Vs Hyundai in India

Since Independence The Car Industry was closely monitored and controlled by the government till 1981. Limited choices were available to the car buyers due to the limited manufacturers and tight supply.

In 1981 the government decided to review their car industry policy and found that the segment was neglected and there was a big market available for cars. The existing cars available in the market were costly and technically less sound with compare to international standard.

The government initiated dialogues with Suzuki Motors, a Japanese car manufacturing company, finalized a joint venture, and formed a company named Maruti Udyog Limited (MUL). The initial venture was between Government of India with a share of 74% and Suzuki Motor with a share of 26%.

That was a revolutionary step taken for the car industry in India. In 1983 MUL launched its first car in India (Maruti 800) with a price tag of Rs.40,000/-.

This development was a big shock to the existing car manufacturers and they also rushed to improve and increase their product line.

After the lifting of licensing in 1993by government, 17 new ventures came up, of which 16 are for manufacture of cars.

Since then the Indian car industry is flourishing phenomenally and become a key sector for Indian economy.

Technology

The India car industry is technically sound and in competence with car industry in other countries. Tata Motor has launched its Indica a fully designed car in India.

Mr. Dilip Chabaria, a Mumbai based car designer is also in the news for his exclusive design of cars. Ford Motor Company in India also had arrangement with him when the Ikon (car) was launched and specially designed sports model was available for customers designed by DC Designs.

Strict emission controls imposed by the government, car manufacturers in India are manufacturing their cars with Bharat Stage III compliant standard.

New fuels like CNG and LPG are also not ignored and new cars are available to run on these fuels.

A Bangalore based company has also producing Reva, an electric car though it is not broadly accepted by the car buyers in India. Electric cars are non polluting in terms of smoke and noise.

The overall technology for cars in India is satisfactory.

Government

1981 was the year when government taken a revolutionary initiative to review and reform its policy related to car industry. Now getting permission to produce cars in India is easier and new entrants are coming almost every year. Government has also imposed heavy imposed heavy import duties on imported vehicles to safeguard the car manufactured locally.

Economics

The economic condition is sound in India with a good GDP rate and it is one of the fastest growing economy in the world. India still has to go a long way to be a first world country.

It has become a very favorite spot for investors abroad. Almost all big car manufacturers have entered into this market and many are planning to do that. Some of the best brands of the world are also available in the country i.e. Maybach, Rolls Royse, BMW etc.

Tata Motors is planning to launch a car with a price tag of Rs.1 Lac to attract those untapped and big segment of customers who are not able to buy a car and having Motorcycles. This will again revolutionise the India car industry on the whole. India is one of the biggest markets for the small cars in the world.

Culture

In last few years due to a good growth in economy and globalization, average income of people has increased which resulted in better liquidity of cash. Earlier people were more on the investing part then spending but today the scenario is different today (specially the young generation) is believing on spending then investing or saving. Easy financing with a lower rate of interest has also facilitated people to buy and afford a new car.

The car manufacturing companies has grabbed this opportunity and segmented their productline very well to serve each segment of the car market in India.

Demographics

The future of car industry is India is good due to favorable economic conditions. Easy availability of funds has increased capacity of owning a car for buyers dramatically.

A new generation of IT/BPO executives are also a good segment of customers of the car industry as their spending power is proportionately higher then other executives. This becomes an opportunity for the car producers.