Saturday, April 23, 2011

Analysis of the Indian SUV/MPV Market

Billing figures of last 7 months 

Bolero has been the indomitable leader in this segment. Bolero has re-instated the fact that how VALUE driven Indian market is!!! Mahindra would have never anticipated that its low cost, ingeniously manufactured SUV would drive these volumes. Bolero has proved to be an Alto in the SUV space – As Alto has been an answer to the dreams of the entry-segment car owners, similarly Bolero has succeeded to mark itself as a 6-Lakh rupee FORTUNER in rural markets of India. The product is a sure-shot success even after huge supply constraints and is bound to break all records in near future.

The first 5 ranks have consistently been dominated by:
1.       1. Mahindra Bolero
2.       2. Toyota Innova
3.       3. Mahindra Scorpio
4.       4. Mahindra Xylo
5.       5. Tata Sumo

Toyota has uncovered the vulnerability and uniqueness of the Indian market. It has proved that a major portion of the Indian market now gives more priority to Quality and Comfort rather than price. Innova has become a favorite among big families and in taxi market. Its’ premium pricing has in a way signified international standards, utmost safety and plethora of comfort. The total package has lured a lot of MPV customers and is unswerving in its performance.

The mighty, muscular Scorpio raised Mahindra’s standard in the so-called premium space and has given the company a new recognition. The famous tractor manufacturer has churned and created an aspirational brand for SUV lovers. Its compactness, macho-ness, sturdy design, offroad capability and much efficient engine made it an instant hit in the Indian market. Scorpio has shown enough promise to challenge and shake-up Innova’s 2nd position. Scorpio is now the green-card for Mahindra to enter the international markets and thus expand its presence. We’ll have to see how things would fare after the launch of Force Motors SUV and the much-awaited Mahindra’s World SUV (code-named W201).

Xylo’s success has suddenly threw light on this expanding MUV space and has led a path to the new launches in line (like Nissan’s NV200, Toyota Avanza, Tata Aria). Although Xylo hasn’t been able to make a significant dent in Innova’s market, rather has created a fan-following in the rural upmarket space where demand for spacious and rugged vehicle has shot up. Xylo has also constantly been trying to evolve into the taxi space and is quiet successful in doing that. Xylo in a way has been the poor man's Innova!! It has earned a decent reputation in rural markets and the responsive engine has got it a few fans over Innova.

Fortuner has created a rage and still amazes on how Toyota SUV's have reigned over the minds & hearts of Indian buyers. Remember the equity Land Cruiser enjoys?  And Fortuner has utilized this and bringing it in the 20 Lakh Rupee price point has put the sales charts on fire. Endeavour still lacks the muscle and charm that Toyota brings in its product, but has still been able to sell an average 300 no. per month.

My personal views about Aria during the launch was –
“I've tried out the Tata Aria and have to admit that the Tata engineers have done a great job shaping the car, The car looks magnanimous and has a wide range of features within. The 17 inch alloy wheels distinguish it as a macho roadster and the sturdy outer body shell makes it a safe car. 6 airbags, ABS with EBD & TCS tries to justify the price-point. Adapterra 4x4 transmission attempts to infuse off-roading capability and is also successful to some extent. The interiors are much plush and the multiple ac con-vents (even on the door) provides perfect cooling within the car. Multiple utility boxes on roof don't add real value to the utilitarian purpose. With this Tata hopes to attract buyers of sedans, MUVs and SUVs. Aria can said to be a segment creater - 'Crossover segment'. 

But my business inference from the visit was - 
·  Although it is commendable that Tata has produced a segment-definer, it looks the same Indica platform, more of a Bloated Indica to be precise (the view is absolutely personal, I still admire Tata's capability to build perfect VFM cars - Indica & Indigo still sell great numbers!!!)
·  The price Tata's are demanding from the product is far above the ground !!! (14.5 Lacks on-road price for a Tata Monster, and that too the base variant - its too much to demand for). This removes the Aria out of the VFM proposition.
·  The Tata effect is still visible on the car - body has multiple panel gaps, the steering wheel controls & plastic seems downmarket (but the dashboard finish has improved a lot though) 
·  Legroom in the third row is a heart-breaker : It is totally cramped and I expected a lot more from it. Although the overall seat quality was good; I didn't feel that it was apt for long tours/drives.
·  I second the point that Tata's CV image will effect this model. People in this segment would still prefer buying a Toyota (Innova - Low End & Fortuner - High End) rather than shelving out their money on Aria.
·  Last, but not the least - Aria also doesn't promise best-in-class mileage which can act as another negative factor!!! A mileage of 8-9 kmpl will hamper its reputation more.”

My prediction came true and Aria hasn’t been able to make impact in sales numbers. However, it would be interesting to see the performance of the upcoming 4x2 Aria (stripped version). 
pic source:


Nitesh said...

Valuable & Eye opening Information.

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