German Car Makers Look to India | Business| Economy and finance news from a German perspective | DW | 21.08.2004
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German Car Makers Look to India

After conquering the Chinese market, German car manufacturers are turning to India. With a population of more than a billion and a high growth rate, there's much to be enthusiastic about.


DaimlerChrysler is leading the charge into the Indian car market.

German car manufacturers are convinced India has huge potential. In the capital city of Delhi alone, 550 new cars are delivered every day.

Now the Germans want a piece of the pie. In June, Porsche opened dealerships, followed one month later by Audi. DaimlerChrysler is taking orders for its new super-posh limousine, the Maybach, and rival BMW is also looking for ways to enter the market.

Times are changing

That German cars sales in India would dramatically increase seemed unlikely as recently as the 1980s. At the time, Indians exclusively drove domestically produced models, which were comparatively -- car enthusiasts agreed -- low quality. They also had to be ordered months in advance.

Much has changed: New car sales in India climbed 30 percent in 2003, according to Pankaj Gupta, of the Society of Indian Automobile Manufacturers. And German cars are increasingly available and highly coveted.

India, like China, a growing market

According to Gupta, sales of new cars topped the one million mark for the first time in 2003.

"People's incomes have grown, which means that there's a market for DaimlerChrysler of about 8 to 10 percent," he said.

Frauenhandel in Indien

Indian street scene

1994, DaimlerChrysler started producing cars in India as part of a joint venture -- with great success. Between 2000 and 2003, production grew 50 percent to 1,700 cars.

While that might seem a small number considering India has a population of more than a billion, it's not when one takes into account that there's only six cars per 1,000 Indians.

That could change if current economic growth figures of 8 percent continue. Experts estimate 50 million people graduate from the middle class to the upper middle class each year. These are the luxury car buyers of tomorrow.

The situation in India is similar to that in China a decade ago. Today, China is well on its way to becoming the world's third largest car market.

BMW investigating the market

After success in China, BMW is also hoping for the same in India. "The Chinese call BMW's 'Bao ma', which means valuable horse," said Eckhard Wannieck, a spokesman for the company. "I think that we have a similar positive reputation in India."

Formel 1 in China

BMW's Formula 1 cars are not a model most Chinese buy

China, BMW has a factory with 3,000 employees cranking out cars. Now it is looking into the possibility of starting production in India. Many cities, including Calcutta and Cochin, are under consideration. When and where BMW will lay the cornerstone of its Indian operations remains to be seen. But one thing's clear: All German car makers believe India is one of the biggest -- and until now most neglected -- car market in the world.

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