Fuel-efficient cars and a slew of new SUV models will be unveiled at Delhi's Auto Expo later this week as global carmakers continue to rev up their activity in one of the world's few growth engines despite a recent slowdown in sales.
Around 50 new models will be presented to hundreds of delegates and half a million visitors as carmakers look to move on from a year of sluggish sales due to high interest rates and rising costs and fuel prices in Asia's third-largest economy.
The debut of South Korea's Ssangyong, owned by Mahindra & Mahindra (MAHM.NS), and product launches from Toyota Motor Corp (7203.T) and Renault SA (RENA.PA) will underline the country's importance to the world's biggest carmakers.
The overwhelming feeling is that this current sales slowdown is a temporary phenomenon and global carmakers are certainly betting on India to bounce back. There's no slackening of interest here, R.C. Bhargava, chairman of Maruti Suzuki (MRTI.NS), India's biggest carmaker, told Reuters.
Everybody is working on hybrid, fuel-efficient and green technology vehicles. There's an exciting race to find a small, cheap hybrid car for India, which will certainly be a winner.
Jaguar Land Rover, owned by India's Tata Motors (TAMO.NS), will skip the overlapping North American International Auto Show in Detroit to focus on the India event, while Ford Motor Co (F.N) said it will make a world-first announcement in New Delhi.
Car sales in India grew 30 percent in the fiscal year to end-March 2011, cheering global carmakers as economic turmoil hit sales in developed markets. Since then, interest rate hikes by India's central bank and rising input costs that pushed up prices have dented demand as economic growth cools.
India's small-car segment, made famous by Tata's ultra-cheap Nano and targeted by firms such as General Motors Co (GM.N) and Fiat SpA's (FIA.MI) Chrysler, has suffered most as first-time buyers balk at the increased cost of credit or stick with a motorcycle, considered a family vehicle in India.
Still, the Indian economy is likely to grow at around 7 percent this fiscal year and rising salaries and a rapidly-growing middle class mean it remains one of the world's most exciting markets for automakers.
GREEN VS GAS-GUZZLERS
Led by the launch of Mahindra's first-ever electric cars following its 2010 acquisition of Reva and the first glimpse of a hybrid model of Maruti's popular Swift hatchback, the expo will see a slew of fuel-efficient and green technology launches.
After crowds swamped the show two years ago, police have asked organisers to cap daily attendance at this year's six-day event at 100,000, local media reported.
Carmakers are also set to muscle in on India's popular SUV segment, which fared better than smaller cars last year, with an offering from Maruti, a widely-anticipated four-wheel debut from motorcycle experts Bajaj Auto (BAJA.NS), and a multi-utility model launch from South Korea's Hyundai Motor Co.
Luxury carmakers, riding 40 percent annual sales growth in India, will use the expo to increase their product lines, with Daimler AG's (DAIGn.DE) Mercedes Benz and Volkswagen AG's Audi rolling out new SUV and sports car models.
BMW AG (BMWG.DE), market leader in the luxury segment, will unveil its Mini brands in India for the first time.
The Society of Indian Automobile Manufacturers will also announce its new growth outlook for the industry at the expo, a month after it said sales would likely show no growth in the 12 months to end-March.
Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp (7269.T), produced every other car sold in India last January. But labour strikes that cost $500 million in lost production and a pronounced slowdown in sales of small cars and petrol models -- its forte -- have hit the company hard.
Tata, Mahindra and Hyundai sales have jumped as Maruti's factories slowly ground back into action, while diesel sales have soared in recent quarters thanks to government subsidies that make the fuel about $0.40 per litre cheaper than petrol.