In my editorial on GM’s plant to take on the Indian market in partnership with SAIC, I wrote that Maruti Suzuki’s monstrous market share indicated the possibilities for GM. Well, the Indian market leader isn’t going to just sit on that lead. In 2007, Osamu Suzuki said that his firm’s Indian passenger car market share would never drop below 50 percent, an assertion that took two years to prove untrue. The WSJ reports that although the overall Indian market will probably grow 16 percent this year, Maruti’s share of that market has fallen over the last year from 45 percent to about 40 percent (with passenger car share down from 55 percent to 48 percent).
Unlike its rivals though, Maruti hasn’t overexpanded production on the subcontinent, and by the end of March 2010, demand could actually outstrip its local production of about 1m units. In contrast, India’s number two automaker, Hyundai, exports about half of its 600k unit production. As Reuters reports, Maruti is fast-tracking plans to expand production by another 750k units by 2015, in line with maintaining its market share. If Volkswagen takes a stake in Suzuki as has been rumored, the cash injection could fuel even more explosive expansion. Add planned India expansions by Honda, Ford and Renault into the equation, and it’s clear that GM’s Indian gambit will be flying into the teeth of some stiff competition.