Acacophony of horns, revving engines and squealing brakes fills Jagdish Khattar's 11th-floor office in Connaught Place, New Delhi's central business district.
The company Khattar runs, Maruti Udyog, makes half of the cars jostling on Indian roads and every automaker on the planet is fighting to add its vehicles to his traffic jam.
This year, India's 1.1 billion people will snap up vans, small trucks and cars - especially pint-sized models - more quickly than anyone except the Chinese, according to Global Insight. From 2006 through 2011, India will be the fastest-growing auto manufacturer among the world's top 20 carmaking countries, the accounting firm PricewaterhouseCoopers says.
Global Insight predicts that Chinese sales of light vehicles - cars, trucks and vans that weigh less than six tons - will soar by 50.6 percent to 12 million by 2012.
India's 216 million-member middle class is rushing to make up for decades of automotive deprivation. In 1991, P.V. Narasimha Rao began dismantling state controls that had shut out foreign companies and left India with only Maruti and two other homegrown automakers, Hindustan Motors and Premier Automobiles.
Rao, who was prime minister from 1991 to 1996, kept duties on auto imports as high as 100 percent and encouraged foreign carmakers to set up local assembly and manufacturing plants. Auto companies began to trickle in, led by Daewoo Motor of South Korea in 1995. Customers followed, buoyed by bank loans and rising salaries.
In the year that ended on March 31, Indian passenger car sales climbed 21 percent to 1.38 million. By 2015, they are expected to almost triple to three million, according to the Society of Indian Automobile Manufacturers.
Khattar, a former civil servant who ran a government-owned cement company and sold Indian teas in London from 1979 to 1983, says that Maruti has advantages in luring new car buyers.
GM, Honda and others assemble cars in India, importing most of the parts. Maruti, which is 54 percent owned by Japan's Suzuki Motor, builds cars from scratch. Maruti's new subcompact called the SX4 shows another of the company's selling points. The model has two airbags, anti-lock brakes, an anti-theft system and automatic climate control. It sells for 689,000 rupees, or $16,980, in New Delhi. The equivalent Honda model, called the City ZX, costs 727,000 rupees without the frills.
"Our competitors can sell at our price, but can they produce at our cost?" Khattar said.
So far, investors are backing Khattar. "Everyone will have to beat Khattar because he knows the Indian market well," said Amit Kasat, an auto analyst at Motilal Oswal Securities. Maruti's stock price soared to 829.9 rupees on May 22; the government sold a 25 percent stake to the public in June 2003 at an issue price of 125 rupees. On May 10 of this year, the government sold its remaining stake for 23.6 billion rupees. Shareholders, including banks and insurance companies, now own 46 percent of Maruti; Suzuki owns the rest.
"He has done a great job to get Maruti among the most profitable car companies today," Govindarajan Chellappa, an analyst at Credit Suisse Group, said of Khattar. "What else could shareholders ask for?"
One thing is better roads. Outside Khattar's window, Maruti 800s, the smallest car the company makes, jostle with Toyota Corollas, Chevrolet Aveos and swarms of other models - some so tiny that they could fit on the bed of a U.S. pickup truck.
During Mumbai's rush hour, traffic crawls at 10 kilometers, or about 6 miles, an hour.
India's $14 billion highway development program is not keeping up - for drivers or carmakers. "We are not able to grow the way we should," said Rajeev Chaba, the president of General Motors India. He says India's inadequate roads and ports are part of the reason the country trails China as a car market.
The company Khattar runs, Maruti Udyog, makes half of the cars jostling on Indian roads and every automaker on the planet is fighting to add its vehicles to his traffic jam.
This year, India's 1.1 billion people will snap up vans, small trucks and cars - especially pint-sized models - more quickly than anyone except the Chinese, according to Global Insight. From 2006 through 2011, India will be the fastest-growing auto manufacturer among the world's top 20 carmaking countries, the accounting firm PricewaterhouseCoopers says.
Global Insight predicts that Chinese sales of light vehicles - cars, trucks and vans that weigh less than six tons - will soar by 50.6 percent to 12 million by 2012.
India's 216 million-member middle class is rushing to make up for decades of automotive deprivation. In 1991, P.V. Narasimha Rao began dismantling state controls that had shut out foreign companies and left India with only Maruti and two other homegrown automakers, Hindustan Motors and Premier Automobiles.
Rao, who was prime minister from 1991 to 1996, kept duties on auto imports as high as 100 percent and encouraged foreign carmakers to set up local assembly and manufacturing plants. Auto companies began to trickle in, led by Daewoo Motor of South Korea in 1995. Customers followed, buoyed by bank loans and rising salaries.
In the year that ended on March 31, Indian passenger car sales climbed 21 percent to 1.38 million. By 2015, they are expected to almost triple to three million, according to the Society of Indian Automobile Manufacturers.
Khattar, a former civil servant who ran a government-owned cement company and sold Indian teas in London from 1979 to 1983, says that Maruti has advantages in luring new car buyers.
GM, Honda and others assemble cars in India, importing most of the parts. Maruti, which is 54 percent owned by Japan's Suzuki Motor, builds cars from scratch. Maruti's new subcompact called the SX4 shows another of the company's selling points. The model has two airbags, anti-lock brakes, an anti-theft system and automatic climate control. It sells for 689,000 rupees, or $16,980, in New Delhi. The equivalent Honda model, called the City ZX, costs 727,000 rupees without the frills.
"Our competitors can sell at our price, but can they produce at our cost?" Khattar said.
So far, investors are backing Khattar. "Everyone will have to beat Khattar because he knows the Indian market well," said Amit Kasat, an auto analyst at Motilal Oswal Securities. Maruti's stock price soared to 829.9 rupees on May 22; the government sold a 25 percent stake to the public in June 2003 at an issue price of 125 rupees. On May 10 of this year, the government sold its remaining stake for 23.6 billion rupees. Shareholders, including banks and insurance companies, now own 46 percent of Maruti; Suzuki owns the rest.
"He has done a great job to get Maruti among the most profitable car companies today," Govindarajan Chellappa, an analyst at Credit Suisse Group, said of Khattar. "What else could shareholders ask for?"
One thing is better roads. Outside Khattar's window, Maruti 800s, the smallest car the company makes, jostle with Toyota Corollas, Chevrolet Aveos and swarms of other models - some so tiny that they could fit on the bed of a U.S. pickup truck.
During Mumbai's rush hour, traffic crawls at 10 kilometers, or about 6 miles, an hour.
India's $14 billion highway development program is not keeping up - for drivers or carmakers. "We are not able to grow the way we should," said Rajeev Chaba, the president of General Motors India. He says India's inadequate roads and ports are part of the reason the country trails China as a car market.
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