Berlin: European carmakers, squeezed by U.S. tariffs and price wars in China, will get a welcome boost from an EU-India trade deal that sharply drops tariffs on car imports, but face a tough market dominated by homegrown firms and compact Japanese ‘kei’ cars. India and the European Union signed a trade deal on Tuesday, including slashing tariffs on imports of EU-made cars to 10% from as high as 110%, the biggest opening yet of India’s vast market for Volkswagen and Renault.
The move, however, only edges the door open, analysts said, with local car brands and Asian rivals Suzuki Motor and Hyundai dominating the market, with hot-selling models like the Maruti Suzuki Wagon R kei car – a class of pint-sized, affordable vehicles smaller than a Mini Cooper. “It’s a start. When we talk about exports from Europe, it’s only about premium cars. For the volume sector it is difficult,” said Stefan Bratzel of German auto research group CAM, who said Suzuki and Hyundai had better understood the market. “In India it’s about cheap, reliable, stable cars. The Volkswagen Group cars have been too expensive. Suzuki has benefited from the kei cars which are highly popular in Japan.”
