Passenger car segment in India is growing so fast that from the current one million vehicles in the country, it is estimated to touch 1.5 million in five years, and South holds tremendous potential, he tells G. Satyamurty after declaring open the company’s showroom in Coimbatore, the first in the south.

He admits that currently the Multi-Utility Vehicle and the Sports Utility Vehicle segment is witnessing a growth of 20 per cent as against five per cent of the passenger car segment. For the predicament of the latter, there have been a few impediments like the rise in interest rate for vehicle loan, he explains.

But it is also bound to grow with the overall economic boom and the attitude of the Indians is going through a ‘bit of change.’ “The major reason why I am confident of passenger car segment is that India has proved that it is capable of producing cars of international quality. Now you can see India compete in European and American markets. Thus we have become a global level player and India is there to play a very big role.”

He asserts that his company, which started with tractors, has been able to capture substantial export market, especially Germany. “With our new car we are targeting 25 per cent of the production of 2,000 cars per month for the export market. Already it has made preparations in Indonesia. Its first target would be Asian market and then American.”

Mr. Mittal observes that the car manufacturers have to be cautious at the same time and ‘should not try to oversell’. The major problem that has been haunting the car market has been selling without proper verification of the income of the customer.

But he is certain that with the rate of inflation ‘very much under control’, the Government will have a ‘rethink’ on the interest rate. “I am confident that it will decline.”

He is also doubly sure that South India holds a tremendous promise for car manufacturers and “in the next two to three years 50 per cent of our cars will be sold in the south.” One of the major reasons for this is the rising paying capacity in the South, including in rural areas.

Even in the South, Tamil Nadu is one of the most growing States, which has conducive political stability and peace.

Another interesting feature of Tamil Nadu, especially Coimbatore region, is “it gives value for money and is prepared to pay for quality. While it is very conscious of the outflow from the pocket, it is serious about quality. Thus this region holds immense promise for the car manufacturers.”

His plan would be to focus on B class cities and also the rural areas as the latter has become economically very vibrant.

Asked whether the company would be interested in setting up a plant in Tamil Nadu, which has now become the hub of automobile sector, he indicates his positive frame of mind. “This State has quality technical manpower .The plant would cost not less than Rs. 300 crore.”

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