If so many global car firms are showcasing their latest wares in India, this is a big feather in India’s cap, and this shows how this is one of the fastest-growing markets in the world. This is also a statement of confidence in the strength of the Indian middle class. But most of the media has mistakenly talked of this as the low-cost car market — it is actually the mid-car segment since these cars all cost Rs 5-6 lakh.
While there is certainly a market for low-cost goods in the manner that CK Prahalad pointed out in his famous “bottom of the pyramid” argument, India moved away from low-cost cars some decades ago. This is best shown by the example of Maruti. Once upon a time, the Maruti 800 was the mainstay of the company, but when the company talks of phasing it out now, there isn’t too much of a protest. This is because, in the 1990s, the Zen had overtaken the Maruti 800; later the Alto took over the bestselling car position.
It is, of course, true that the Tata Nano is now the lowest-cost car in the Indian market and that it has lots of buyers. But most of the Nano buyers are buying the mid-level variant, and not the Rs 1 lakh one.
Sarla Gupta, Noida
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