When Maruti started production in India, the total domestic market in India was just about 40,000 passenger vehicles. Maruti made its millionth vehicle in 1994, and at that point in time the total market size was just about 250,000 passenger vehicles per annum.
India was not known as an exporter of automobiles and no one really expected that to ever happen. However, the export growth in the last 5 years have been as stunning as the growth in domestic sales, if not more. From a mere 53,125 passenger vehicles in 2001-02, exports have exploded to 176,000 units in 2005-06 and are expected to cross 200,000 units this fiscal. That's truly amazing. We export volumes that we were consuming domestically just 12-13 years ago.
Now obviously if we are able to export such numbers, the quality of the products must be of international class. The quality and productivity improvements have delivered lower price to the consumers too. I remember Maruti Zen was introduced in 1993 with a price tag of Rs 350,000. Today superior vehicles are available at lower nominal values. If we factor in inflation, car prices have virtually halved during the last 10 years. Meanwhile salaries have gone up by a factor of 5-6.
"The small car hub" is a dream that is being realized fast.
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