MARLOW, England, September 11 /PRNewswire/ --     Indian economy is booming and car production in the country is on the
brink of rapid growth. The car sector is already one of the most important
branches of Indian industry.

The market potential is huge: just 0.7 per cent of the 1.1 billion
population of Indian own a car, but the percentage is rising.

A study conducted by the market research institute Maritz Research
answers the most important questions:

- What is the current situation of the Indian car industry?

- What trends can be observed?

- Who are the big players in the industry?

- What opportunities are open to European car producers in India?

A summary of the results of the study, along with an interview with Joerg
Hoehner, Director of Automotive Research Europe at Maritz Research,
commenting on the results, can be found below:

On the fast track with inexpensive vehicles

European automakers and suppliers still underestimate the significance of
the Indian automobile market. Mistakenly, however: passenger car sales have
doubled in India over the last five years to more than 1 million annually.
And the future looks bright, to put it mildly. Experts estimate that unit
sales will reach 3.15 million by 2015. India would thereby overtake France as
the world's sixth-largest automobile market and almost pull even with Germany
and the UK.

Growth market India

- The Indian economy is booming. With a 9.4 per cent hike in GDP from
2006 to 2007, India's economy is amongst the strongest growing on the planet.
According to the IMF (International Monetary Fund), the Asian subcontinent
could become one of the main engines of the world economy. The growing buying
power of 1.1 billion Indians represents enormous market potential for
automakers and others.

- Since the market was opened to foreign producers in 1991, the
automobile sector has developed into one of India's main industries.

- But the market is a far from saturated. A mere 0.7 per cent of Indians
own a vehicle. This is less than in China, where there are 1.2 automobiles
per 100 inhabitants. And in Germany, Japan and the U.S., at least one in two
people own cars.

- Credit is easy to obtain. Unlike China, 85 per cent of vehicle sales in
India are financed.

- Indian consumers are open to both domestic and foreign brands.

Small and cheap: it's what Indian car buyers want

- To be successful on the Indian market, a vehicle needs to be one thing:
cheap. Indians are very price conscious and pay close attention to the
purchase price as well as fuel consumption and maintenance costs.

- Seventy per cent of vehicles sold in India are small (e.g. the Tata
Indica, Maruti Zen and Hyundai Santro).

- Three automakers - Maruti, Hyundai Motor Co. and Tata Motors - control
85 per cent of the Indian market.

Production in India

- Forecasts say that production in India will grow to around 3.1 million
vehicles in the next three to four years.

- India already has a strong base of automotive suppliers, and the
industry is developing briskly. Maruti, for example, currently outsources 80
per cent of its production.

- The world's largest democracy can boast a wealth of highly skilled
workers in areas such as engineering. Moreover, strong investment into
education persists. The DC College of Automotive Studies, which opened in
mid-2007, will train 1,500 students per year in automobile design.

- Exhaust emissions and safety standards are being steadily increased to
bring India up to an international level.

Interview with Joerg Hoehner,
Director Automotive Research Europe at Maritz Research

Mr. Hoehner, what is the current state of India's automotive market?

In contrast to China, India has not played a sizeable role for big
automakers from Europe and North America. But this is now changing. With good
reason, too, since the outlook for the Indian automobile market is more than
bright. For one thing, it's one of the world's fastest growing markets. And
the booming economy has given rise to a middle class with purchasing power.
In a country with a population of 1.1 billion, this obviously represents
enormous potential. Furthermore, manufacturing and research are still
relatively cost-effective in India. The combination of rapid domestic market
growth and production cost advantages makes India an increasingly important
global location with huge market opportunities.

What are the main strengths of India's automakers?

The big advantage Indian manufacturers have is that they've grown with
the needs of their customers. In the past, many of them primarily produced
motorised two-wheelers-still one of the main forms of transportation in
India. But as the demand for cars swelled, they got into automobile
production. As a result, the dominant domestic players know the market
intimately and have tailored their products to it. There is an unmistakable
preference in India for low-priced small cars, so Indian automakers
concentrate mainly on this segment. They're also paying special attention at
the moment to getting more people off of two wheels and into four. The huge
potential of the ultra low-cost vehicle segment has set off a price war
between automakers vying for this target group. Maruti, the market leader,
plans to drop the price of its entry-level model by 20 per cent. Meanwhile,
Tata Motors is pursuing a particularly aggressive pricing policy and has set
itself the goal of bringing a model onto the domestic market in 2008 for
100,000 rupees (around EUR1,800 or GBP1,200). Tata is aiming to raise unit
sales to 1.5 million with the help of this cheap small car. The company
already sells the Tata Ace, a mini-truck, for 130,000 rupees (roughly
EUR2,300 or GBP1,550).

What opportunities exist for European automakers on the Indian market?

India could develop into a lucrative market for European manufacturers.
Whereas the markets in Europe and America are for the most part saturated,
India's has massive growth potential. An early presence on this market of the
future could definitely pay dividends. But it is essential to be aware of
certain oddities. For example, the price factor has caused big problems for
many foreign brands. High duties keep the Indian market largely insulated
from imports, and excessive taxes on imported components push up production
costs substantially. Therefore, if you want to capture an appreciable share
of the Indian market, you have to produce locally. Manufacturers like Maruti
make vehicles entirely in India, so they can offer much lower prices to the
end customer than any importer.

What does the development of the Indian automobile industry imply for
worldwide the auto sector?

India's economic ascendancy could intensify competition in the global
automotive sector as it has in other markets. With the low costs of research
and production, India is a competitor that needs to be taken seriously.
Although the small vehicles manufactured in India are at the moment sold
predominantly on the home market, they could put future pressure on European
and American automakers. With 150,000 passenger cars sold abroad, India has
only just begun to export. Emerging economies and even some developing
countries offer the ideal markets for Indian producers looking to shift their
microcars. Automobile producers from the industrialised world and their
expensive models could be left out in the cold.

It would be our pleasure to organise a meeting for you with Christian
Vorwerck, Director of Marketing Europe at Maritz Research, to discuss the
background to the survey. I am available at any time to answer any possible
questions that may arise.

About Maritz Research

Maritz Research is one of the world's leading market research agencies.
Since 1973, the subsidiary of the US group Maritz Inc. has been assisting
companies to recognise and unleash the potential of their products, staff,
business partners and customers. To do this, Maritz Research makes the
requirements, attitudes and behaviour of customers and staff objectively
measurable and comprehensible. Maritz Research offers a wide range of
strategic and operative solutions with a focus on the automobile, transport,
financial services, IT, hospitality and pharmaceuticals industries. In
Europe, Maritz Research maintains branches in Great Britain and Germany.
Visit: http://www.maritzresearch.com

Press contact

    Philip Durand
    T +44-(1)628-495610
    phil.durand@maritzresearch.co.uk