Segment Busters Ahoy!

Recent Trends in Indian Automotive Scene

Just few dozen months back the Automotive Market was gripped by the monopoly of the entry level htachbacks. This particular segment bought in volumes and hence used to define the superiority of an OEM. Maruti Suzuki had an offtake of 38,065 numbers of Alto in March'11 - the figures of Alto had superseded the overall volumes of Hyundai's all models combined in the particular month! (31,822 nos.). The sale figures of other entry-level hatchs just strengthened the situation (i10 - 14215 units, Wagon R - 14885 units). A surge in these numbers were supported by the fact that the First Time buyers were inclined towards these smaller hatchbacks and hence the monopoly. The situation had been similar since ages - no one can deny the supremacy of the A-segment cars in Indian Automotive Scenario since its inception.

Padmini Premier, Maruti 800, Tata Indica, Hyundai Santro, Maruti Zen were some examples which had strongly heralded the growth of Automotive Industry in India. We expected the future to be similar - and then the wheels of fortune turned.

Source - ET

Even though the A-segment cars were able to withhold volumes, they were losing their market share in the overall pie. Their numbers had suddenly stagnated and the effect was seen with an increase in the volumes of B and entry level C-segment cars. We saw the higher priced i20 consistently garnering more volumes than i10! Swift & Dzire now became the blue-eyed boys of Maruti Suzuki. Figo is successful in heralding the turnover story for Ford. Brio allows Honda to experience 3 digit growth. A lot of this was sparked by the 'dieselisation' of the economy and also with the changing preference of the First Time Car Buyers. This segment was up for change and wouldn't mind purchasing a pricier product offering which provided a better value. The rise in disposable income just reinforced the consumer psyche.

Source - Business Line

The following trend had the Auto Pundits shocked - 'UV'ology grips the automotive scene like a wildfire. The category saw the most successful launches in past 1 year (XUV 5oo, Ertiga, Duster, Quanto) and has a long waiting list - ready to flee into the market (Ecosport, Enjoy, etc). The segment is reportedly growing at a pace of 52-58% and has proved to be a number churner. Not only that, they are more profitable to their OEMs (as they offer higher margins!). These offerings had significantly snatched the pie from their C-segment and D-segment counterparts. Even Renault wouldn't have the answer on why Scala cannot sell more than Duster?, while Scala has far equal features as that of a Duster! (Though suggestions from our readers are welcome!)

It clearly signifies that even in the tight economic scenario, customers are open for product offerings which could provide a sense of excitement and value. Price is slowly losing its USP. No wonder luxury car manufacturers are undeterred by the slowdown and are able to perform well. The quote stands very suitable currently - 'ADOPT OR DIE'. In the volatile scenario OEMs need to rise according to the customer requirements and change. 

Indian Car Sales Figures - September 2012

September 2012 Sales Figures - Pan India

HIGHLIGHTS:

·         HAPPY FESTIVE SEASON! This statement stands true for almost all Auto OEMs in September. Although the figures are just indicative of the offtake numbers; but it does signify the increased confidence among both OEMs and dealers alike that  the festive season would revive the sales figures in October. The month was also historic with the government taking the most difficult stand in its tenure – increasing the diesel prices by Rs.5! Yes, it may sound that the Congress wanted to divert the attention from Coal-block allocation to increased diesel prices. But the petrol dependant OEMs wouldn’t care – their wishes had come true! Increased diesel prices not only stood as a point of rationalization of fuel prices; but also indicated that the petrol-only models of the OEMs had a chance to regain their lost glory. The decreased interest rates also soothed the overall sentiments.

·         Maruti’s plight in past one and half years remind me of the bouncing ball that I used to play with in my younger days. The Automaker has seen tremendous twist and turns in the recent times and also witnessed the scariest labour issues of all times. If you believed your employer makes you slog and pays peanuts, read this - http://fountainink.in/?p=2660&all=1. However, the sales figures were a refreshing treat – Alto again rocketed to over 20k numbers; with the new Alto 800 coming in October 16 - see the numbers touching new heights in Oct. Ertiga, Eeco, Wagon R & Ritz saw their best sales numbers for the financial year. Ertiga numbers now seems to stabilize at 7k figures and have strategically placed Maruti in the highest-growing UV segment. The refreshed Ritz also soared its volumes and brings ‘JOY’ to the automaker!

·         SX4 & A-star emanate as the laggards from the Maruti’s stable. The numbers highlight the brands to be in their most difficult stage (Astar -71, SX4-288) and with Alto 800 coming in, I fear death for the A-star! The Kizashi numbers were a delight though J With Manesar production running in full swing, be sure about the consistent numbers for Swift & Dzire as well in Oct.

·         Someone just recently mentioned that Mahindra is the Maruti of the UV segment – and that aptly describes the automaker! M&M again pips Tata Motors from the third position and joins the Top-3 bandwagon yet again!!! All thanks to the most loved SUV in the recent times – XUV5oo which celebrated its first anniversary on Sep 28^th. The brand has now consistently overtaken Scorpio volumes and yet commands a long waiting period currently. The concern still remains the most spacious UV in the Indian market today – the Xylo. It stepped below 2k figures for the first time in past 8 months. You can either “Quanti”fy the decrease or ignore it – but M&M needs to regain the lost ground with Evalia and a host of MUV’s to be launched (Enjoy, Stile, Lodgy etc) ready to put to a stiff competition.  

·         The Quanto figures remained encouraging – with offtake of 1782 numbers within 10 days of its launch (Sep 21). It also has registered 3200 bookings in the short span!

·         One can predict the increase in diesel prices just by seeing i10 figures overtake i20 numbers J Hyundai also saw an boost Santro, i10 & Eon numbers amidst the rationalization of fuel prices. But the surprise from Hyundai was its Elantra sales – it consistently registers a 600+ offtake (781) and strengthens Hyundai’s foothold in the premium category. The brand has proved to be an intelligent choice since the success of the fluidic Verna.

·         There’s nothing working right for Tata now. With Ex-Chevy chief Karl Slym moving in, we expect some major positive turn around for the automaker. October has also been touted as the month of major launches (read the new Safari Storme, new Manza club class, refreshed eV2, pepped up Vista)!!!

·         The most important highlight of Sep’12 sales remain the kingmaker from Renault’s stable – the brand which has dusted up a new storm – THE DUSTER! With 4211 numbers, it has outdone the most established SUV in the category – the mighty muscular Scorpio.  And with over 20,000 bookings currently the brand is in a very comfortable stage to sustain its volumes. The confidence is also apparent from the price hike of Rs.30k-40k in October.

·         The newly launched Scala also performs decent for Renault with 688 numbers. It however brought down the Sunny numbers in Sep (from 2757 in Aug to 2023 in Sep). The platform sharing model somehow is not working for the two OEMs. Hope they do not repeat their mistake by re-badging Duster under Nissan.

·         The mega advertising campaign by VW (vibrating ad, mobility max, TV commercials) seemed to have resulted in a slight increase in the overall figures (4397 in Aug to 5170 in Sep).

·         Toyota Liva & Etios encountered their ever lowest figures. Toyota seemed to have contradicted their ‘promise’ of quality with the aforementioned models and hence the outcome. Although the much higher priced offerings – Innova & Fortuner continue their gold run.

·         I somehow love the consistency of Ambassador sales. The old workhorse from the Hindustan Motors stable always has a ~200 figures – maybe a government order is equally divided throughout the year.

A list of Top 20 Brands of the month -