Tuesday, October 25, 2011

Resurrection of the Truth

The Indian entry level sedan market has grown by a modest 6.1%. This year (till date - April to Sep), it has churned a volume of 1,14,377 units against a volume of 1,07,763 units. There weren't any major new launches in this space except the refurbishment of Tata's Indigo in form of Manza and the French Stallion - Logan was operated and renamed as Verito. Although everyone's desire still remained the much successful offering from Maruti Suzuki - 'Dzire'. Toyota also brought its most awaited 'made-for-india' product Etios, but couldn't offer anything revolutionary in terms of design/quality/value. Hyundai's Accent and Ford's Ikon are slowly being retired; but they are yet proving to be worth war-horses and are producing quite a decent figures in the Sales Charts. Major growth was seen from Southern and Western markets where the space grew by around 10.3% each.
The growth steeply increased from Cochin, Mumbai, Ahmedabad, Bangalore & Pune markets where the consumers found more value in a 3-box car at a lower price. The customers will to shell out a little more for an extra boot was well identified by OEM's and proved to be an attractive proposition.
Click to enlarge - April'11 to Sep'11 Sales figures

Even after the luke-warm response from the critiques, the Etios swept the show with 22,825 units with an average of 3800 units/month. The segment stalwarts Dzire & Indigo experienced significant downfall with a de-growth of 9.9% & 26.7% respectively.
But, one product clearly managed to steal the show - Mahindra's VERITO. Earlier known as Logan, analysts believed that the product had lived its life and Mahindra's bitter experience with Renault would again expedite in murdering the product. Even customers were sure that the boxy and stubborn looks of the Logan would catalyze the rejection. Then, one fine day we all hear about Mahindra-Renault divorce and were sure that it was the end of M&M's saga in the sedan space.
But the company's faith in the product motivated it to play a different game. Strategically we saw an increase in the number of media campaigns - "Logan loves India" which elucidated about Logan's segment-best mileage and interior space. Instantly it striked chord with value conscious customers and slowly gained acceptance. The numbers aroused some confidence in the OEM over the dying product.
Growth of over 100% was the proof of success for the product 
Now with rejigged independence, M&M immediately imparted some cosmetic changes such as inclusion of roof rails, sporty rear-chrome applique, side cladding and mahindra's insignia - front & rear created some buzz in the market and re-instated interest amongst the consumers.
The brand which was performing (rather surviving)at a level of 250-300 gained momentum and touched 1500 units/month within a span of six - nine months. This was the live example of how a capable product was ignored because of lack of right marketing and wrong pricing. M&M was competent enough to identify the glitch at the right time and act pro-actively. We are happy too that with the features that Verito has to offer vis-a-vis competition; it still has a long way to go.... 


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