Maruti had tasted commercial success with its passenger carriers like Omni, Eeco & Versa. All the offerings in the passenger carrier segment were petrol-only models and were successful in both personal and commercial usage. Owing to the success of these models; Maruti identified a huge business opportunity in load carrier segment as well and launched the Super Carry in the year 2016. The Super Carry is powered by a 2-cylinder turbo-charged 793 cc diesel engine and an all-new 1200 cc CNG engine variant.
Maruti Suzuki knew that the segment shall cater primarily to the commercial customers and only diesel models shall be viable; hence it decided to have a different network/dealership for the sale of Super Carry. Similar to Nexa; the commercial outlets were offered to existing Maruti dealers and it invested all the focus in expansion of the network. By Nov’18’ Maruti’s commercial vehicle channel was present in 193 cities with 250 outlets.
The Mini Truck Load Segment (<2 tons) was dominated by offerings from Tata Motors & Mahindra. While Ace was the undisputed leader in the segment; Mahindra tried to grab considerable share via its offerings Maxximo/Jeeto. Ace (Normal+EX+Zip) is currently enjoying a market share of 66%; while Mahindra’s share in the segment is 23%. The overall segment has grown by 50% in this financial year (Apr’18-Jan’19) v/s Apr’17-Jan’18.
Super Carry’s performance in this financial year has been extremely positive. The model posted a growth of 159% in the first 10 months of this FY over same period previous FY. The model has steadily gained a market share of 10% and at this rate may even match Mahindra’s volume in the next 1-2 years!
Classic Legends; a subsidiary of Mahindra had announced that their motorcycles are sold out till September 2019 owing to massive number of bookings received online. However, the booking figures were not disclosed and it was told that the deliveries for the Jawa and Jawa 42 will commence by March’19 once all 105 dealerships shall be operational by February 15, 2019.
44 units of Jawa bikes were dispatched to the respective dealerships in Jan’19. These figures indicate that these bikes were primarily dispatched to the newer set of dealers and shall be used for Test Drives. The right assessment of Jawa bikes production, demand and sales shall happen basis Feb’19 data. Do note that Classic Legends has set a target of 90,000 units of Jawa Motorcycles for this year, making a target of 7,500 units per month. Royal Enfield is currently selling an average of 45k units of Classic 350 per month; and seeing the initial response 7.5k units of Jawa bikes shouldn’t be difficult.
In Jan’19; Suzuki sold 54,524 units of Access v/s 51,300 units of Jupiter sold by TVS. While Activa has been the undisputed leader in the segment; Jupiter had slowly established itself as a strong second spot holder in the category. It even crossed 1 Lakh unit sales in the month of Oct’18 and had sold 1,02,132 units that month. However; post the launch of refreshed avatar Access has been slowly gaining volumes and maintained a sale >44k units/month in Apr’18-Jan’19.
Sales comparison of both the models in this financial year –
In terms of vehicle comparison; Access comes with 124cc engine whereas Jupiter comes with 109cc engine. Access 125 and Jupiter both comes with rear disc brakes. The price difference between both the vehicles is just within Rs.5k. With Access gaining steady popularity; TVS is losing Jupiter’s volumes and with Jan’19 performance it shall be interesting to see if Jupiter could bounce back and firmly regain the 2nd spot.
A look at YoY Growth of the Two Wheeler OEMs and the Industry –
Two Wheeler Sales was negatively affected in Jan’19 and the cumulative sales was down by 5.1 per cent to 15,97,572 units as against 16,84,066 units in the same month a year ago.
Market leader Hero MotoCorp’s bike sales last month was down by 8 per cent at 5,69,962 units. Rival Honda Motorcycle and Scooter India’s bike sales stood at 4,00,695 units, down 18 per cent.
Bajaj Auto, however, posted growth of 24.7 per cent at 2,03,358 units last month.
Scooter sales too were down in Jan’19. Scooter sales declined by 10.2 per cent at 4,97,169 units as against 5,53,695 units in January 2018. The Market leader HMSI’s scooter sales were at 2,72,170 units, down 14.77 per cent. TVS also saw its scooter sales dip by 0.41 per cent at 83,794 units. Suzuki however witnessed a 60.28 per cent jump in it scooter sales at 61,348 units last month which also ensure the overall OEM sales could grow a healthy 39.6%.
Slowdown in growth rate of 2018, has spilled over in 2019. With growth at risk, 2019 could prove to be a very challenging year for all the manufacturers, including luxury brands.
Hatchbacks not only grew at the slowest pace but also ceded market share
In other segments, growth was driven by few products
MUV growth was driven by the new entrant in the market – Mahindra’a Marazzo
Sedan growth was driven by incremental volume of Maruti Dzire and new Honda Amaze
SUV growth was led by incremental volume of Tata Nexon, Hyundai Creta, Maruti Brezza and facelifted Maruti S-Cross
India continues to be a small car market, with 77% of cars sold are less than 4m in length
In over a decade (after 2006 Government’s new policy), car manufacturers definitely learnt to package the car in such small footprint
In medium (4m-4.5m) segment, its only Hyundai Creta and Maruti S Cross, that brought incremental volume, rest just suffered
In large car segment it’s the MUV segment which grew (Toyota Innova & Mahindra Marazzo), rest saw a decline
Body style deep down analysis
For this analysis, product classification is primarily based on length, which ideally should define the in cabin space available for the buyers. Further, sub classification is based on the value proposition manufacturers bring to the table, to differentiate their product.
Entry level hatchbacks seems to be out of favor now
It seems buyers are opting for larger hatch even as first time car purchase
New launches too didn’t brought much excitement in small hatchback segment
Case is Hyundai Santro, which is averaging around 8,000 per month, since launch
Much lower than its premium (- relatively) cousins – Elite i20 (12,000) & Grand i10 (11,000)
One more reason for Santro’s low number is heavy discounts being offered on outgoing cousin Grand i10
Carmakers need to seriously revisit small hatchback product strategy
For small cars, margin is usually low and automakers thrive on volume, which is shrinking now
Honda has shown some prudence, in line with the growth trend by discontinuing Brio, and no plans to bring its successor in India , which is already launched in ASEAN region, thus making Jazz and Amaze as entry level product
With demise of Tata Nano, it seems there is less value in serving bottom of the pyramid, as Indian car buyers are moving to high value cars or sometime – ‘no car at all’ in crowded metros, by opting for Mobile App based shared mobility service
Except for sub 4m sedan, every other sedan segment was in decline mode
Growth of sub 4m was led by incremental volumes from Maruti Dzire followed by new gen Honda Amaze launched in mid-2018
SUV data has been split, based on chassis, to gain better understanding of SUV growth
Monocoque SUV/Crossover segment has grown much faster
SUV – Monocoque body
It is quite apparent that new age more urbane SUV/Crossovers took the charge of leading the segment
Very high growth of the two premium (-relatively) segments is attributed to low base
Mahindra very cleverly has had positioned its SUV in a sweet spot, by offering large car for less money
Now its territory is being invaded by Tata’s Harrier, later in the year will be followed by MG Hector and Tata H7X
SUV – Ladder chassis
By splitting data, it is apparent that ‘real’ SUV are not selling so well
High stance surely gives them the formidable and imposing image but they aren’t quite urban jungle friendly
Moreover, body roll is too high, which robs the driving experience
Thus more and more urban buyers are opting for monocoque body construction
Tata Safari’s sudden growth is not a sign of revival, but it was due to its supplies to Indian Military
Surprisingly, Toyota’s mighty Fortuner suffered decline in sales
Reason could be entry of new SUVs in similar price bracket, like – Skoda Kodiaq (Monocoque chassis), Honda CRV (New diesel engine), and little bit of Mahindra Alturas
Drop in Maruti Ertiga’s volume was due to generation change which has impacted the segment growth rate
For Maruti, volume decline was compensated by the growth of Eeco
Honda Civic – The legend makes a comeback to the sub-continent!
Entry-D segment has seen a dramatic change in recent years; a lot of customers in this segment have been wooed off to bigger SUVs or have upgraded to the Big 3 German sedans. The dwindling volumes in this segment ensured that the OEMs slowly move out their offerings from the segment or avoid investment to get in new models in the category. However; Honda has taken a bold stance and re-enter the segment with it’s globally best-selling nameplate – The Civic. Going to be launched in the 10th Generation Avatar; the 2019 Civic should have two engine-gearbox combinations – a 141hp, 1.8-litre naturally aspirated petrol and a 120hp, 1.6-litre diesel engine. The Technical Specifications for the New Civic is as shown below:
The upcoming Civic should be feature loaded and have all the goodies that is currently available in the rival cars. Features like dual-zone climate control, a powered sunroof, a 7.0-inch touchscreen infotainment display (Android Auto and Apple CarPlay compatible), an eight-way power adjustable driver’s seat and a smart key (which can also be used to turn the engine on and off, operate the sunroof and power windows and open the boot) are standard. Other kit on the new Civic include push-button start, automatic wipers and a fully-digital 7.0-inch MID in the instrument cluster that displays information including access to a connected smartphone’s phone book, call history and music, along with average fuel efficiency and the distance to empty meter. The instrument cluster also has displays for a seat-belt reminder and a door opening alert.
With so much preparation by Honda to launch the New Civic; the biggest question is – Kitna Bikegi? (How many units shall it sell?)
Before answering the question; let’s assess the global scenario for the Civic Marque – Initially gaining a reputation for being fuel-efficient, reliable, and environmentally friendly, later iterations have become known for performance and sportiness. US contributes to 40% of the Civic sold internationally! Almost 11.5 million units of Civic has been sold in US alone in the past 46 years (since 1973). In 2018; More than 27k units of Civic was sold every month! (Almost double the Honda India’s volumes). The US historical sales data for Civic is as shown –
If you note that over the years; the volume of Civic has gradually increased signifying the consumers acceptance of the car and probably also means that other cars in the segment are faring equally well (let’s not forget world’s best seller Corolla too).
The 8th Generation Civic sold 54,821 units during its lifetime in India. The highest number of Civics were sold in the year 2007.
However; things have changed dramatically here in the subcontinent. To get an exact picture; we have taken the comparison sales of 2 years – 2007 (which recorded highest number of Civics sold in India) and 2018 (for understanding the latest scenario). The analysis shows –
While 40,992 cars were sold in the segment for the year 2007 (average of 3,416 cars per month); the sales for the segment dropped to 6,014 cars in 2018 (average of 501 cars per month). While we do not see the hopes of any revival for Optra & Laura; we anticipate Civic to sell ~50% of what it was selling in 2007. Going by our assessment; we predict Civic to do an average of 700 units/month. However; India is a price sensitive market and Honda has to be extremely aggressive in the launch pricing to make a significant impact and bring traction back into the dying segment.
Yesterday; we published an article highlighting the magnitude of discounts being offered on the purchase of a new car by the OEMs. While we were astonished the amount of money being pumped in by all auto manufacturers to acquire new customers; we were also surprised that these discounts were also aggressively promoted on the media platforms (say Newspapers, E-mailers, etc). We have collated the paper ads released by these OEMs recently to highlight the matter –
Maruti Suzuki Arena –
Ad Communication –
Get Fantastic Offers of your Favourite Maruti Suzuki Cars throughout this month!
Offers upto Rs.63,100 on Celerio, Rs.58,100 on CelerioX, Rs.58,000 on Dzire, Rs.47,100 on Alto K10, Rs.45,000 on Brezza, Rs.43,000 on Swift, Rs.37,100 on Alto 800 & Rs.22,000 on Eeco
Ad Communication –
Take home the Maruti Suzuki Vitara Brezza with the Auto Gear Shift for a smooth and easy drive.
Save upto Rs.45,000
Scheme Communication –
Upgrade to Ciaz and get exciting offers upto Rs.75,000/-*
Scheme Communication –
Never Before Seen Consumer Offer, Exchange Bonus and Corporate Offer Up to Rs.80,000/-*
FADA (Federation of Automobile Dealers Associations) released the January 2019 Vehicle Registrations statistics. Pl note that these are the vehicle registration data (delivery of Invoiced vehicles from dealers to end customers) and clearly indicates the vehicle sales movement. Otherwise we have always been tracking the vehicle offtake data (billing of vehicles from OEM to authorized dealers). As usual; we thank FADA for publishing the retail data and providing much realistic data about the actual sales of vehicles.
As seen above; all categories (PVs, 2Ws, 3Ws and CVs) saw positive sales growth — with total sales touching 15,65,150 units and the overall automotive industry a growth of 8.5 percent.
The passenger vehicle (PV) retail sales in the month was 2,71,395 units which was +34% MoM, compared to 202,585 units in December 2018. All thanks to the extensive discounts offered by all OEMs as part of liquidation of year end stocks. Do note that the OEMs have spiked up the discounts in the past 2 months for gaining traction.
Ashish Kale, president of FADA had released a statement mentioning, “As predicted, healthy inquiry levels seen in December finally showed signs of conversions with the year-end offers continuing in January, especially by PV OEMs which has helped the customer in making the final purchase. Consumers interest, which had remained buoyant has slowly but surely started converting to sales in better percentages. Although all the sectors on a monthly basis have shown signs of positive growth, 2W growth rates are not at a healthy high and are seen positive due to a huge de-growth in December. CV growth is flat and has substantially dropped from the high growth rate it had maintained through year to date.”