India is one of the emerging economies of the world.

World is
looking at India as a future Super Economic Power. With the Increase
in Disposable income in their hand, the Automobile Industry has
witnessed surge in Demand for their Cars. Today, Middle Class
Population can afford a Car, unlike their earlier genrerations, where
only handful of rich people could have a car. Getting your own Car is
no more a dream, it had turned out to be a reality.

Demand for cars has increased manifold in the past 1 decade.

Entry Hatch Segment:

- The 800 trundles along in line with its expected 2,500 monthly average
(2,494 cars). However, we see the Nano gaining traction. Production seems to
have freed up noticeably, with 4,001 Nano’s sold in January 2010. This is an
improvement over its previous supply constraints allowing only 2,500 cars a
month to roll off the temporary line in Pune. Oh, Ms. Banerjee! If it weren’t for
you, we’d be looking at 5X the number today. The Gujarat plant is still 8 – 10
months away from being ready. Those of you who’ve booked and have a
middle-of-the-range que number will have to wait longer.

B Segment Hatchbacks:

- As if Maruti was not dominating enough already, the VFM-Master has set an
all new record in January. 58,540 B segment hatchbacks…the highest till date
for the company! The Alto, Swift, WagonR and Ritz (in that order) are riding
high on success!

- A distance second are the Hyundai sisters (i10 & Santro, followed by the
premium i20) for a total of 26,949 hatchbacks sold. Just as Jan ’10 was a
record for MUL, so it is for Hyundai too. This is their highest sales
performance in the segment ever. While the i10 is undoubtedly a market
favorite (selling more than the Santro too), the 6 – 8 lakh rupee i20’s success
has even left Hyundai managers surprised (average of 4,000 cars a month).

- After a lull in December (4,228 cars), the Indica & Indica Vista climb back to
their January ’09 levels. In fact, the number is near identical at 11,448 (Jan
2010) and 11,433 (Jan 2009). Despite the segment growing by 20% in this
period, the Indica siblings have failed to register any increase in sales
(negative market share). While 11,000 cars a month is highly respectable,
the poor functional area handling of the Indica Vista (marketing, sales, image
etc.) have limited an otherwise competent hatch’s success.

- Firm in the No.4 position, and only poised to climb (thanks to the Beat), GM
has sold 6,730 hatchbacks! GM’s cash registers mustn’t have stopped
ringing….this was GM’s record month too. They’ve never seen such numbers.
Thanks to the Spark, the General has always maintained an average of 3,200
hatchbacks per month. The well-priced Beat will add another 3,000 – 4,000
units to that tally. All the more impressive when you consider that GM India
was fighting bankruptcy PR only 6 months back!

- The Punto had a disastrous performance in December with a mere 532 GP’s
sold. A recovery in January 2010 brings them back to the 1,200 level (1,256
to be precise). I don’t see any positive change in this number in the near
future, as it’s barely 6 months from the time of launch (cars generally sell
better in the initial quarter or two due to pent up demand). The Punto – as
Fiat’s mega come back car - has fared below manufacturer expectations. In
fact, the hatch sells only 20% more than the 8 – 9 lakh rupee Linea sedan.

- The Fabia continues to fire away with one cylinder less…..and the sales
reflect just that. Fabia sales are extremely dependent on promotions; that
explains the roller coaster sales graph of 2009. Up one month, sharp drop in
the next (from 196 cars in a particular 2009 month to 767 in October). 794
Fabias moved off showroom floors in January 2010, a recovery from the mere
291 sold a month back (Dec 09), as well as the 238 sold 12 months ago (in
Jan’ 09).

- Honda’s got no choice but to swallow a bitter pill each month end that the
Jazz score card comes in. Jan 2010 marks the second lowest selling month for
the pricey hatch with a paltry 490 hatchbacks sold. This is Honda’s first real
failure in the market. Nothing to do with the product, all to do with the price.
Moving in the reverse gear, Maruti Udyog Limited's share in the total passenger car market
plunged below 50 per cent in June for the first time. The company managed just 42.99 per cent in
the total market as against 60.53 in June 1999 and 77.08 per cent in the same month of the
previous year, according to the Society of Indian Automobile Manufacturers (SIAM).

On the other hand, its closest rival Hyundai Motor India Limited clinched 16.62 per cent compared
to 11.64 per cent. Another competitor Daewoo Motors India Limited also witnessed a growth as
its share rose by 12.79 per cent against 6.49 per cent last year and 3.1 per cent during June
1998.

MUL sold 15,898 units in the total passenger market of 36,974 vehicles in June this year, which is
less than the company's sale in the same month in the previous two years. The company sold
24,100 units in June 1999 and 20,914 cars in June 1998.

On the other hand, HMIL sold 6,146 units and Daewoo 4,702 cars. The share of MUL, HMIL and
Daewoo in June previous year stood at 24,100, 4,634 and 2,584 units respectively in the total
market of 39,813. MUL's share in the first quarter of this fiscal came down to 51.33 per cent
against 68.87 per cent in Q1 last year and 83.80 per cent in 1998.

Hyundai managed to capture 14.69 per cent during the period against 9.80 per cent last year.
Daewoo's share stood at 11.04 per cent compared to 4.51 per cent and 2.70 per cent during the
April-June period in the previous two years respectively.

Maruti sold 73,447 units during Q1 this year against 89,131 cars during the corresponding period
last year and 78,395 units during April-June 1998. HMIL sold 21,012 units during the first quarter
of this fiscal compared to 12,684 cars of last year's corresponding period. Daewoo, on the other
hand, sold 15,802 units this year and 5,839 and 2,529 cars during Q1 the previous two years.

During the first quarter of this fiscal, the auto industry registered a 11.03 per cent rise at
11,84,041 units against 10,66,369 vehicles. Medium and heavy commercial vehicles fell by 7.08
per cent at 18,137 units, scooters moved down by 12.43 per cent at 2,58,680 units during the
April-June period.

However, passenger cars rose by 10.54 per cent at 1,43,066 vehicles during the quarter, the
SIAM figures said. LCV grew by 11.79 per cent at 13,940 units, MUV rose by 9.20 per cent at
28,201 vehicles, motorcycles moved up by 31.22 per cent at 4,99,869 units. As many as 1,77,042
mopeds were sold, up 11.72 per cent and three-wheelers grew by 1.77 per cent at 45,106 units.

Production of vehicles rose by 4.60 per cent at 3,90,907 units during June against 3,73,699
vehicles during the same month of the last year. M&H commercial vehicles and two wheeler
scooters registered a deceleration. Besides, production of three-wheelers also fell during this
period. While M&H declined by 17.84 per cent at 6,591 units, passenger cars fell by 20.36 per
cent at 29,520 and 76,871 scooters were produced, down 29.63 per cent. Three-wheelers slid by
2.21 per cent at 16,096 units.
LCV, on the other hand, rose by 14.3 per cent at 6,117 units, MUV grew by 7.10 per cent at 9,942
vehicles, motorcycles moved up by 36.80 per cent at 1,80,651 units in June. As many as 65,119
mopeds were produced, up 15.82 per cent, the figures revealed.