India Poised To Overtake The US In Vehicle Demand

Along with China, India’s economy has experienced rapid expansion in the last decade, helping fuel the creation of a new middle class, which of course wants all the trappings most middle class folks do, their own house, car and plenty of creature comforts.

By 2015, India is expected to be the fourth largest single auto market in the world and already, some manufacturers, even US ones, are taking a serious look at peddling their offerings there. One of them is Ford, which plans to offer a version of its flashy third generation Focus.

According to a study by Boozy & Company, the average car buyer in India wants to spend less than $8000 on a vehicle. That really isn’t very much and helps partly explain why Tata believed it’s pint sized Nano could do so well on the sub-continent.

This price point will also make it difficult for Ford and others to sell current versions of their world cars there in many cases. But when it comes to cheap, practical cars, perhaps there’s another angle, here, something which could ultimately prove far more cost effective and beneficial.

India’s most popular car for many years has been the Hindustan Ambassador, essentially a brand new, Isuzu powered 1948 Morris Oxford. In fact they’re still making the blasted things and in sizable numbers too.

There’s many reasons why the Ambassador has proved such a success. It’s capacious by Indian standards, has proper doors, a trunk and prosaic, tough mechanicals, which make it easy to operate and easy to service in tough, harsh conditions, like those typically found in India. Because it’s been in production forever it’s also highly profitable. In fact it’s regarded in many quarters as India’s national car and the king of the road down there.

If car makers like Ford, GM and others are to really have a fighting chance and selling practical, low priced cars in India, perhaps the success of the Ambassador is something they need to consider at least in the short term.

Getting back to the study, Booz says it’s not just about the cars, it’s also about the fact that China and India will become the pillars of the global economy in the future? Really, that’s a bit like saying the sun will rise and set tomorrow. If you ever wondered what happened to all the money in the world in the last couple of years, now you know; it’s been used to pay hefty consulting fees to people who do nothing more than simply state the obvious.

[Source: USA Today]