Thanks to factors like steep depreciation of the rupee and a general slump in the economy, car makers like Volkswagen, Ford India and Fiat India have delayed their small car launches by at least 6-12 months.
Over a 20% slide in the rupee against the dollar and euro currencies have upset these car makers' plans and they are now wondering how to price their products competitively and yet make profits. Volkswagen has pushed back the launch of its much anticipated small car- UP. Ford India which had recently conducted a cost workshop with some of its key vendors in Chennai for its new small car, code named B562 or KA, have also delayed the project. Another car maker, Fiat which was planning to introduce a small car below the Punto has now started to concentrate on other possible launches including an MPV to rival the Maruti Ertiga and others.
A lot depends on the cost as these are entry level cars which have to strictly be priced as competitively as possible as this segment is extremely price sensitive.