Only 8% of Indians have a car, so ownership is trending at 17% a year. Or at least it was until October when receding became the fashionable thing for growth to do. Indian forecasters now say that it will shudder to a pedestrian 8% for the year. Who wouldn't settle for 8% growth right now?

There are 450m Indians under the age of 21. There is therefore a rapidly growing workforce, the youngsters are being given the skills needed by the modern economy, and investment in manufacturing and service industry is rising fast. By 2015 there will be a new salaried elite who will turn car demand from a canter to a gallop.
Meanwhile there is emphasis on building small cars for export as well as for domestic demand, and many will be shipped to Europe - as just-auto has been reporting. India sees a global role in being the world's small car specialist.

Because of that, the most important car is from India's largest manufacturer and market leader Suzuki. The Japanese company was cunning enough in 1992 to invest GBP140m in 54% of Maruti when that company was building antique cars. The Indian state subsequently sold around 20% to financial institutions. The combined entity now has a near 54% market share in India and sales of 760,000. The new Alto - Suzuki's small car will arrive in Europe and the UK very soon.

Suzuki's Delhi factory creates a violent mismatch of impressions. The 100m or so employable Indian youngsters all appear to travel to work in Delhi simultaneously. There is insufficient transport to accommodate them without modification. The just-auto prize for innovation went to the entrepreneur who welded four park benches to the roof of his panel van and seated 12 well-groomed young men in suits and ties.

The number of colleagues in the gloom beneath was inestimable, but the two guys denied floorspace within, held open the double rear doors with one hand, and clung to the lip of the roof with the other; all this at 50mph on a bumper-to-bumper, four-lane motorway with fellow travellers unfamiliar with lane discipline and with sacred cows entitled to instant access at all times.

Suzuki Manesar
The entry to the Manesar factory near Delhi is shielded by a shanty town of food providers several miles long in the dust of the roadside. Then comes the factory itself whose innards gleam like a battleship, is equipped with more automation and robots than its Japanese twin, and which has a native Indian managing director with the poise and confidence of any seasoned industry executive in the West. The locals like to describe India as "living simultaneously over 400 years." That covers it nicely.

From its position 25 years ago making 40,000 Fiat and Ambassador cars a year, Maruti Suzuki is now headed for one million cars a year within two years. To do that, a dealer network was needed to distribute the Suzuki cars pouring out of the two factories - the largest Suzuki has outside of Japan. Nobody had done that before and it is now a huge competitive advantage. The garages make a good living from servicing all the Maruti cars of yore and adds icing to the cake. Next come cars that will be designed in India by an engineering staff that will balloon from 400 to 1,000 in short order.

Kanwaldeep Singh, 39, has been the general manager of Maruti Suzuki for the last five years, is an economics masters graduate from Cambridge and at one time a journalist on the Times of India

"The first task has been to get all the people - dealers included - onboard with Japanese quality standards," says Singh. We have done that and we are growing at optimum speed. The two principal models (the Swift and its Desire notchback derivative) have an eight month waiting list. What is important now is new models. Anything new works commercial magic here in India. The market is very attuned to novelty."

The Indian Government has done its bit to assist the growth of its new industry. Purchase tax has been slashed from 40% to 12% and import duty has come down from 30% to an average 6% so that manufacturing industry is not protected from competition from the world's best cars.

International Tier 1s arriving
Hyundai is the most aggressive competitor with a rapidly growing 18% of the market built largely on the back of the Santro (Atoz). It is cranking up from 300,000 to 600,000 and exporting. The i10 is an export to Europe and Africa. Next to worry about is Nissan which is moving Micra production to India (partly from Sunderland in the UK).

India is beginning to hit its stride in terms of getting both quality and price out of its factories. Both are vital for the export drive and key to that was getting the international component makers plugged in. Delphi and Magneti Marelli have both signed up and the Italian company is in joint venture with Maruti for electronic control units. Delphi is with T.V.Sundaram Iyengar & Sons for common rail diesel engine systems. That agreement was signed earlier this year and was followed by an announcement from Bosch that it too would make components in India. Opel and Fiat both already take diesel engines from India.

Maruti Suzuki has a benign attitude to its employees recognising that it does not just need cheap labour. It needs a manufacturing elite which in turn creates good citizens and consumers. The majority of employees have had twelve years at school, two years at technical college and a year in the workshops on-site.

Singh says that the average wage is around $400 a month. "That makes them aristocracy. They get their own home, TV and a microwave. They have arrived."

They can buy a new Maruti 800 - 25 years old in basic concept - for $4,000. The new five-door Alto will be double that. Staff costs fall further down the value chain among the component makers who are now springing up along the "motor corridor" - the road between Delhi and Mumbai (Bombay as was).

Alto an international brand builder
Singh reckons that while the average Indian likes Maruti Suzuki's novelty and quality he is not predisposed to any global brands. "I can go out there and talk about Reebok or McDonalds and the response is disinterest. They recognise the brands from Cable TV or the internet, but are not enamoured. They will embrace these companies but first they have to come to India and prove themselves."

So it is with Suzuki. Its record as a good citizen in India is becoming established and there is a growing record of quality. "We are not starting from zero but we still have much to prove." Alto will have a large part to play in that drive to establish Suzuki as a trusted player - and not just in India.

Indian expatriots will be reporting back to base as Alto tries its luck in Europe and South America. About 120,000 units will be exported every year including the home run to Japan. Half will go to Europe. Ranked by its volume of sales that is Holland, Italy, UK, Hungary and Germany. If all goes well the Alto may also be assembled in China where there is already a plant - as there is in Canada. Maruti Suzuki has CKD in Egypt and Indonesia.

The spec for Alto outside India will have to be different. Most important is the ride quality for tarmac rather than dirt roads and for the higher cruising speeds. There will be changed spring and damper rates and ESP.

The UK car mags think that Alto will be accepted. It's pretty, very well packaged with basic trim of tolerable quality, rides well and feels reasonably quick.

There is to be a hybrid version and the plan is that it will be a brand-builder for Suzuki in Europe.

"It's a tough fight for us in Europe. There are a lot of luxury cars and we are not going to compete with them for some time," says Masayuki Fujisaki, head of the Suzuki product planning group. He thinks there is now a chance for Suzuki to show what it is good at and for India to earn some kudos. "Because of the economic and environmental shifts in Europe there is a need for small cars and we think that we have made the smallest five door car possible that it is a clever car that will be welcomed as such and which will help our image. 'Eco-friendly' is an important and fashionable keyword in Europe."

It might be a bit of a stretch but it's a thought. This could well be Suzuki's moment in the sun - and India's. There is no liquidity issue in the Indian economy yet thanks to the rate of foreign investment exports. In October they were up 31% year-on-year. That's huge, and it has all been created by a work force average age 23. The annual GDP growth rate of 8% is rapidly creating salaries for 5% of the population of $4,000 to $10,000. Keep on like this and it will be 20% within eight years. That means 200m households. That's some powerhouse. Let's just hope that the boys round the corner at Tata can hold their place in the sunshine also, sufficient to nurture - then prosper from - their ownership of Land Rover and Jaguar.

A few months ago it looked as if Ford had pushed the two British brands into oblivion for a handful of loose change. Now it looks as if an India-based investor could become one of the most resilient in the world.

Rob Golding