Nissan compact car Micra to roll out from Chennai plant

Besides Renault-Nissan, other carmakers have expressed interest in developing and marketing the small car in India.

Toyota Kirloskar Motor (TKM), the automotive joint venture between Japan's Toyota Motor Corp. and India's Kirloskar Group announced in April that it will invest Rs.1400 crore ($350 million) on a new plant in Bangalore from where it will roll out its small car in a bid to tap the largest segment of car market in India.

The Indian small car market is dominated by market leader Maruti Suzuki, which controls over 50 percent of the market. However, in January, Tata Motors challenged its leadership by unveiling its ultra low-cost car Nano. Tata's Nano and the popular Indica are expected to be pitted against Maruti Suzuki's small car offerings - Alto, Maruti 800, Wagon R and Zen. Keeping pace is South Korea's Hyundai Motors, which has tasted success with its Santro and the new i10 models.

Also entering the small car market is Toyota's Japanese rival Honda, which has set up its second manufacturing plant in Rajasthan to launch a small car by 2009. World's third largest automobile manufacturer, the US-based Ford Motor Co. said it would invest $500 million in India to make a small car that will have a sticker price as low as $7,500. Germany's Volkswagen AG also said it would also start to make small cars at a new plant around 2010.

Annual passenger vehicle sales are forecast to rise to 2 million units by 2010 in India and analysts say Indian car sales would more than quadruple to $145 billion by 2016, making India's car market attractive for automakers.

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