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Our Bureau

Cut on excise duty on small cars has boosted the segment

New Delhi , Aug. 21

It is not just the automotive giants who are vying to grab a slice of the fast growing Indian compact car segment. Malaysian automaker Naza is learnt to be conducting a feasibility study for setting up a car assembly unit in India. According to auto industry sources, Tamil Nadu is one of the States which the company is considering for its proposed unit. Tamil Nadu already accounts for a chunk of total car production in India with auto majors such as Hyundai, Ford, and Mitsubishi-HM having a manufacturing presence in the State.

Naza had unveiled its first locally built compact car, called the Sutera, earlier this year to compete with Proton and Perodua and had at the time of the launch, indicated that it will target overseas markets such as India, Britain and South Africa.

The l.1 litre Sutera sells in Malaysia for the equivalent of Rs 4.5 lakh.

Compact car segment

Industry watchers point out the domestic compact car segment is still the fastest growing one in the country. The segment grew by 31.2 per cent in April-July 2006 to 221,598 units accounting for 68.25 per cent of all cars sold in the period. The growth has increased sharply since the Government's decision to reduce excise duty on small cars.

A series of compact cars are due for launch in India over the next couple of years.

More Stories on : Outlook | Cars

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