Traffic jams are already commonplace in India’s big cities -- especially in Delhi, Mumbai and Kolkata. Finding a parking spot is a daily nightmare. But the situation for drivers is only going to get worse.

Currently, only nine out of a thousand Indians own a car. The country with the world’s second-largest population is the 11th largest car market but the growth rates are impressive. Last autumn, car sales rose by 12 percent.

Rajiv Kaul, the chief organiser of AutoExpo 2010, is excited about the future. “It is a rising market,” he says. “And although the numbers of the people who can afford them are small as a percentage in absolute numbers the market is increasing quite rapidly.”

Right now, Maruti Suzuki and Tata models are the most seen cars on India’s roads. The Indian giants sell about a million cars a year.

Foreign companies want their share

Foreign manufacturers are queuing up to get their share of the growing market, as other markets dwindle in the wake of financial crisis and environmental concerns.

India recently overtook Japan as the largest market for compact and sub-compact cars, which account for 75 percent of the country’s overall car sales.

Last year, after some delays, German manufacturer Volkswagen opened a plant in Pune. This is where it is building its Polo model that it unveiled on the first day of the AutoExpo.

The company hopes to release the car in March, marking its entry into the compact car segment.

Jayant Davar, the president of India’s Automotive Component Manufacturers Association, says Volkswagen has caught up after some dithering.

“Volkswagen has done extremely well in China. They were the first there and here I think they lost the advantage of being a first mover but they are coming into India with large investments and there is definitely a sense of commitment.”

German pavilion has grown by 20 percent

Recent media reports have hinted that Volkswagen wants to develop a new cheap model with Maruti Suzuki. It already built up its first production lines in India in the 1990s, with Skoda and Audi.

“That’s the reason why the German pavilion this year is bigger by about 20 percent than last year -- their space this year is about 22,000 odd square metres,” says Davar. “The German area if you look at both car and components put together is the second after India.”

Delhi’s AutoExpo is becoming increasingly important for car manufacturers. It is where Tata unveiled its Nano last year, the world’s cheapest car, at less than 2,000 euros.

The fair goes on until the end of the week.

Author: Jürgen Webermann/Anne Thomas
Editor: Thomas Bärthlein