Indian Auto Sales Expected to Surge During Upcoming Festival Season

While many Western countries have attempted to jump start their struggling auto industries with federal incentive programs, in India, automakers are banking on religious and cultural festivals to drive new car sales.

India’s emerging upwardly mobile population has increased the demand for automobiles and made the country a major market for automakers worldwide. Automakers from Europe, Asia and the U.S. will launch or reintroduce no less than a dozen new car models in India over the next two months. In addition to imports, India’s domestic automakers are hoping to gain market share as demand increases during the festival season which runs from September through November.

Vehicle sales in India have remained strong for the better part of the year with the sale of passenger vehicles increasing by 11% during the three month period of April through July. Most analysts predict similar sales numbers for August.

Maruti Suzuki India Limited chief executive officer, Mayank Pareek, says that recent festivals throughout the country had a positive impact on the automakers sales. Pareek says, “August has been one of the strongest months this year with good demand coming in certain pockets as Onam, Rakshabandhan and Janmashtami increased footfalls and reined in good sales.” Over the next three months Pareek expects upcoming festivals to deliver similar results.

Maruti is the domestic market leader in India and sought to maintain that distinction by introducing its new Estilo compact car just in time for the start of the festival season.

Not to be outdone, Toyota debuted its long-awaited Fortuner 4×4, diesel SUV in August. Toyota released the Fortuner in the U.S. in 2005 to mixed reviews.

In the coming months, Hyundai is expected to launch a refurbished version of the Santro Xing micro car which is manufactured in India. General Motors has also announced that it will launch its new Chevy Cruze which is designed to compete for the midsize auto market with the Volkswagen Jetta and Honda Civic.

GM India president Karl Slym said, “We are looking at new launches to boost sales. Besides Cruz, some current models – the Tavera and Aveo – will be refreshed.” He also said that GM’s grab for market share will continue into next year. “The post-festival season will see our all-new small car from the Beat platform to expand our product portfolio,” he said.

Honda has been making inroads in the Indian market and is expected to release an upgraded version of its popular City as well as a redesigned version of the Civic. In February the Honda City was named Indian Car of the Year for 2009.

Domestic automaker, Tata Motors, will be introducing its new Indigo Vista in the coming months. The sedan version of its Indica Vista is a joint venture between Tata and Italian automaker Fiat, which manufactures the vehicles’ diesel engines. Fiat also owns a management share in Chrysler Motors.

Other automakers expected to vie for market share during the festival season are Ford, which plans to launch its Endeavor SUV and luxury automakers Mercedes-Benz and BMW.

Mercedes has indicated that it will introduce the ninth generation E-Class sedan. Since the model’s introduction on the world stage this past March, Mercedes has sold over 40,000 units and hopes to continue that trend in India. In October, BMW is expected to launch its Z4 roadster to the Indian audience.

Fellow German automaker Volkswagen plans to unveil its much-anticipated hatchback Beetle during the last quarter of 2009. The new Beetle is manufactured in Mexico, and high import duties are expected to raise its sticker price into the luxury sedan price range.

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