The more you find out about the Indian car market, the more interesting it gets. I'm at the launch of the new Suzuki Alto, and I’ve just been chatting to K.D. Singh, corporate communications boss for Maruti, and a supremely knowledgeable authority on the way Indians buy cars.
“There are so many different strata of the demographic here that you can’t talk about typical buyers,” Singh explains, “there’s the top 14 per cent of the market – those that have benefited from the country’s economic boom – who have formed our customer base,” he goes on “and then the next five per cent, which we’re targeting now.”
This second tier is made up of households with an income between 200,000 and 500,000 rupees (£2400- £6000) a year, and in the next five years 20 per cent of Indian households will fall into it.
My next question is why there are still so many Marutis, Mahindras and Ambassadors still on the streets. According to Singh, it’s because you have to pay 107 per cent tax on imported cars – “so you have to be seriously well-off even to drive some Hondas.”
At the same time the tax on indigenous cars is falling, dropping from 40 per cent to just 12 per cent on small cars like the new Maruti A-Star.