Open

Coming up

Don't miss

Replay


LATEST SHOWS

FASHION

Who's next in Paris, an event with international ready-to-wear and fashion accessories collections

Read more

ENCORE!

Tunisia's Carthage International Festival turns 50

Read more

THE OBSERVERS

Muslims and Christians clean up Bangui, and violence spirals out of control in Algeria's Gardaia

Read more

IN THE PAPERS

Is there such thing as 'telegenic' victims of war?

Read more

IN THE PAPERS

2014-07-22 07:21 IN THE FRENCH PRESS

Read more

THE INTERVIEW

Michel Sidibé, UNAIDS Executive Director

Read more

TALKING EUROPE

Dalia Grybauskaite, President of the Republic of Lithuania

Read more

WEB NEWS

Online scammers exploit MH17 crash

Read more

MEDIAWATCH

Too many graphic images from Gaza ?

Read more

  • A call for harmony in riot-hit ‘Little Jerusalem’ Paris suburb

    Read more

  • Israel identifies ‘missing’ soldier in Gaza

    Read more

  • Hollande says French warship delivery will ‘depend on Russia’s attitude’

    Read more

  • Colombia's Rodriguez signs ' €80m' contract with Real Madrid

    Read more

  • Ukraine rebels release bodies, black boxes from flight MH17

    Read more

  • Widodo poised to become Indonesian president

    Read more

  • An ‘explosion of violence’: French press reacts to Gaza protests

    Read more

  • Notorious ‘VIP’ prison in Paris closed for renovations

    Read more

  • Christians in Iraq's Mosul face execution or exodus

    Read more

  • Scores killed as Libyan militias fight over airport

    Read more

  • Ukraine football players refuse to return home after friendly in France

    Read more

  • China steps up communist education to guard against ‘moral decline’

    Read more

  • French rugby stars attacked with machetes and swords

    Read more

  • Hollande announces new military operation in West Africa

    Read more

Business

Small cars: the end of the family scooter?

Text by Nandita VIJ

Latest update : 2009-04-22

A four-member family huddled up on a scooter is an everyday sight on India’s congested streets but the onset of the small-car boom is set to change this.

An Indian family on wheels:  the father in the driving seat, mother sitting side-saddle, holding a baby, and another child standing in front.
 
But this common sight on the Indian streets is about to change. The onset of the small-car boom in India is set to make a revolutionary change in the way millions travel across the country and it could mean the end of the family scooter.
 
In fact it was the four-member family on a scooter that inspired India’s Tata Group Chairman Ratan Tata to launch ‘Nano’ - the world’s cheapest for Rs. 100,000 ($2,500).
 
"It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family," Tata told reporters at the car launch on Jan.10 in New Delhi, India.
 
Anil Mehta, a 38-year-old bank clerk in New Delhi, carts his two teenage boys to school on his motorbike, on his way to work.
 
“With kids growing up it’s difficult to bundle up the entire family on a motorbike on roads congested with traffic, especially during peak hours,” says Anil Mehta, a 38-year-old bank clerk from New Delhi. “Two-wheelers cost close to Rs.80, 000 ($2,000) I rather spend a little more money on one of these new small cars to ensure my family’s safety.”
 
Rising incomes and easy access to financial loans make it easier for lower and middle class families to invest in cars.
 
“People who couldn’t afford to buy a four-wheeler will now be tempted to invest in a small-car,” says Rahul Surjiani, auto analyst with the Centre for Monitoring the Indian Economy in Mumbai. “Instead of spending $1000 dollars on an expensive  two-wheeler, they would rather save a little more money to buy a car and move up the social and economic ladder.”
 
 
Two wheels to four
 
The cheap new cars are giving leading scooter and motorbike manufacturers a run for their money.
 
Days before Tata’s new car launch, India’s second-largest motorbike and three-wheel automaker Bajaj Auto unveiled plans to launch ‘LITE’, its version of a compact car, within the next four years.
 
Bajaj’s two-wheeler sales have fallen by 20% since 2006. Analysts say the bike-maker’s latest strategy will help it maintain a large majority of its clients who are slowly shifting towards cheaper and smaller cars.
 
“Car companies investing in the small-car segment are a threat to two-wheel manufacturers like Bajaj,” says Surjiani. “People prefer investing in a small cheap car which costs close to 20% more than a two-wheeler.”
 
The automaker wants to bring out a $2,500, highly fuel-efficient small car in a possible alliance with carmaker Nissan Motor and Renault.
 
In case of a deal, Bajaj would depend on Renault for expertise on large-scale car manufacturing and in return the French company would benefit from the Indian bike-maker’s strong distribution and large-scale production facilities in India.
 
“Bajaj understands the needs of the Indian market” says Ashish Sinha Roy, Vice President Renault India. “Their manufacturing and channel management skills along with their years of experience in the two-three wheeler segment is a big advantage.” 
 
Auto Analysts are however skeptical of Bajaj’s foray into the four-wheeler market.
 
“No one can challenge Bajaj’s technical expertise but perceiving the company as a car maker and making it work in terms of volume seems difficult,” says Surjiani. “We have to wait and watch how people react to Bajaj as a car brand; when we hear Bajaj, we automatically think of scooters and three-wheelers.”
 
But according to a Renault spokesperson in Paris, France, “Bajaj could come up with something innovative and new in their first car venture.”
Other leading players such as Ford Motor Company also plan to expand operations in India and invest $500 million to begin production of new small cars within the next two years.
Analysts predict carmakers’ revenue to quadruple by 2016 to around $145 billion in the country. “By 2025, it’s estimated that India will boast around 580 million drivers – vastly more than the total population of the 27-nation European Union”, says Douglas Herbert, FRANCE 24’s Business analyst.
 
And Anil Mehta and his boys could soon be one of them.
 

Date created : 2008-01-24

COMMENT(S)