Top 25 selling Cars of May 2018

  • New Creta was the Best Selling Hyundai of May 2018 and emerged as the 7th Best Selling model in May.
  • New Amaze was the Best Selling Honda for May’18 and in fact it clocked the highest ever monthly sales for a single Honda model yet!
  • S-Cross volumes seems to have jumped quite efficiently. It overtook the sales of Ignis & Ciaz in the month of May’18.
  • Baleno impresses again with its numbers and sells more than the newly launched Swift!
  • Vitara Brezza Automatic variant was launched last month and it does similar numbers to that of Wagon R.
  • Tiago continues to be the best selling Tata model and we are happy to see that the volumes have stabilized ~7k average/month.
  • Ecosport overtakes both Nexon & WRV and places itself as the 18th best seller.

New launches have been the key for double digit growth in the industry and let’s see how they fared in their respective segments as well:

Top Selling SUVs –

  • Creta grew a stellar 31% YoY and registered a sale of 11,004 units.
  • Similarly, with the help of updated XUV the model was able to grow 32% YoY!

Top Selling Compact Sedans –

  • Seeing the numbers it’s quite evident that the race will be between Dzire v/s Amaze in this dying segment. The launch of New Amaze has revived the segment in many ways and it should not be an easy sell for both Maruti & Honda.

Top Selling Compact Hatch Crossovers –

  • While the likes of the Hyundai & Toyota have failed in the segment, Ford has invested big with its Freestyle. The initial numbers are pretty impressive. But, will it sustain?

Top Selling Sedans –

  • This is rather the most intense and competitive segment in the Industry. With Yaris coming in, the Race to the Top is indeed going to be interesting.

May 2018 Car Sales – Snapshot

Backed by a slew of New Launches (Honda Amaze, Ford Freestyle, Toyota Yaris, Hyundai Creta), the Indian Passenger Car Industry grew an impressive 19.8% in  May’18 v/s May’17! Maruti as always raked an impressive 54.3% Market Share and registered a YoY growth of 24%. Tata, Honda & Ford emerged as the biggest gainers in May’18 which was backed by the strong performance of their recently launched Nexon (AMT), Amaze & Freestyle. Renault, VW & Nissan though couldn’t recover from the slow run and records a YoY degrowth of 22.1%, 3.8% & 3.7% respectively.

May 2018 had a stellar 15 New Launches/Facelift/Feature Add in the month:

  • May 2: Tata Nexon AMT
  • May 3: Mini Countryman
  • May 4: Mercedes AMG E63S
  • May 8: Nissan Terrano Sport Edition
  • May 9: Maruti Vitara Brezza AMT
  • May 11: Maruti Ertiga Limited Edition
  • May 14: Ford Ecosport S
  • May 16: Honda Amaze
  • May 21: Hyundai i20 CVT
  • May 21: Hyundai Creta
  • May 21: Lexus LX 570
  • May 21: Mercedes AMG SLC 43, GLE 43 Limited Edition
  • May 24: Mini Cooper Facelift
  • May 26: Mahindra TUV300 Plus
  • May 29: Porsche Cayenne Turbo

Carmic Connection: Episode 1 – Honda Jazz

The Jazz in my Life

April 29th 2016 was a very big day in my life. After a lot of deliberation, discussions, test drives and waits I was finally going to lay my hands on my chariot for the next few years. She’s a titanium grey Honda Jazz and I call her the nightfury. To be frank she was not my first choice, I went around a lot and checked a lot of cars under 10lakhs with an auto box to the transmission duties. Finally, I narrowed down to the Polo GT TSi from the Germans and the Jazz from the Japanese. These 2 cars had completely different characters! The GT was this hot chick in red skirt (The test car was in red) who was living this fast paced life and didn’t care about the world. Other cars would move out of her way because she had this never stop attitude and solid confidence (which German cars give). What if she was reckless, she didn’t care a damn. She would break down (DSG gearboxes had issues), so what, she would have made you fall for her by then that you ignore her flaws! She can give anyone 2 levels above her in the socio economic segment a run for their money and proudly wore the GT TSi tattoo for others to remember who just owned them. Well one drive and I was smitten. The 105 PS engine, glossy red paint job, the beautiful 7 speed fast shifting DSG gear box, the safety kit and solid German built had my heart all over her. The drive left an ear to ear smile on my face! But this had to come to an end and my mom knocked some sense saying we should go to the next showroom as well.

Then we went over to the house of Japanese – Honda. The moment I entered I saw this titanium grey Jazz parked on the showroom floor. Ignoring the pleasantries from the salesman I went directly to her. Well she was pretty! She had a confident stance and each and every panel oozed pedigree, history, and she wore a badge called Honda which in my head was always a sign of aspiration, reliability and safety. She didn’t have the aggression but plain lines that defined her. The space was something that a sedan would offer or rather she could put some sedans to shame. To describe her, she was someone with a purpose and someone who ticks all boxes, practical, refined, confident, safe and well built. She was confident of her legacy and she knew she was more than capable of carrying this baton forward. I wanted to go for a drive! I could already see that my mom and dad had approved of her but for every petrol head the drive is what matters!

I was guided to a maroon car and since I had requested for an automatic they had arranged for it. The service centre person bought her to where we were waiting. When we boarded her all 4 of us along with the sales executive fit. This was my first surprise because mom had to stay back when I drove the polo because there was no space. I could already see the smile on my mom’s face so that’s a brownie point for the Jazz. I shifted her to drive and she quietly guided us out of the showroom with a sense of purpose. I was taken aback by the lack of any drama. The 1.2 litre iVtech engine was butter smooth unlike my love at first sight the GT TSi which was full of drama and let people know that she was coming. Not a sign of strain with 5 people in the car. It was as if she was gracefully holding my hand and guiding me and I was following her dumbstruck by her confidence and poise. In no time we were on the airport road which is one of the open roads in Bangalore. I was easy on her and I didn’t want to push her because she wasn’t that type! But when I looked at the Speedo I was shocked when I saw I had already touched the speed limit of 80 KMPH and nobody in the car even knew. The sales executive gave a slight smile looking at my face because I had a feeling she had done this to other people. She was solid, rock solid! No undulation could shake her and I was in her cocoon, safe and protected. The refinement and overall insulation is a class apart. The CVT gear box did a brilliant job at going through the ratios without any drama, as if they r meant to do this all day long and still come back and do this the next. Then the iVtech engine, God what a refined piece of machine! The engine just pulls and even at high revs it serves up power like Alfred would do to Master Wayne in Batman! The Honda impressed me, she ticked all the boxes, she was awesome and she was built like she will last a lifetime. She was a marvel. She is like this girl whom your mother would say is the right bride for me! But still my heart was smitten by the crazy red hot GT.

I was confused and like how! On one side there is this crazy hot chick who had taken my heart for a ride and on the other there was this pretty girl who ticked all the boxes the right way and did everything right and I wouldn’t have to worry about her for a really long time and she will stick with me till eternity. Then I did what every good son would do – ask mom! Her answer was quick, loaded with assurance and in a motherly voice she said Jazz is the best for you! That’s how our alliance got fixed and we were one on April 29th 2016 me and the titanium grey Honda Jazz V CVT.

It’s been 2 years and she has been an absolute gem. The convenience of a CVT is amazing and the iVtech engine; it’s marvellous! The airy cabin cocoons me from the horrible world, rain, dust, slush, ruts, and anything that the road throws on us. She goes on with a “bring it on” attitude and never ceases to amaze me. She has always silently heard my sorrows, taken my irritation, my frustration, my happiness, my calmness and so on. She does drop her calm demeanour once in a while and truly show what she is and boy o boy can she hit some serious speeds and acceleration in the sports mode. What never ceases to surprise me is the solid, stable and safe way she does it.

The Jazz is an absolute gem of a car and she deserves respect for what she does. She never ceases to surprise me and that has been the constant with every drive. With her it’s the road and not the destination that matters to me! Here’s to the 2 years that’s passed and here’s to many more to come. Like I always tell people “I live my life quarter mile at a time”.

(The article was submitted by Mr. Manu Sasidharan. He is a hardcore petrol head, an auto enthusiast and an amateur designer. He has been in close touch with the industry for a long time and is abreast with the action in the automotive sphere. Driving is his passion and combined with a love for travelling makes him a nomad by nature. On the education front, he has done Engg in Electrical and Electronics from Cochin university and Management studies from Symbiosis Pune.)

New Feature: ‘Car’mic Connection

We believe in the philosophy that ‘Cars are not just machines, but a lot more‘. These days we spend more time in terms of finalizing our car purchases and we ought to feel more connected with the one. Many of us even name our cars and go to the extent of celebrating their Birthdays (Day when the delivery of the car was taken). Many special moments of our lives are connected to these machines (Ex: Car purchased before marriage / post birth of a child / anniversaries / graduation, etc).

The kind of connection that we build with our cars is surreal / Karmic. Hence we are terming the series as ‘Car’mic Connection. We shall feature the stories that emulate the passion of the individual towards his/her automobile on our blog. If you want to feature your review / experience kindly mail it to auto.punditz@gmail.com. We shall review the same and post it on the website.

The Past & Future of Badge Engineering!

First of all what’s Badge Engineering/Cross Badging (Source:Wiki)- 

Badge engineering, sometimes called Cross Badging, is the practice of applying a different badge or trademark (brand, logo or manufacturer’s name/make/marque) to an existing product (e.g., an automobile) and subsequently marketing the variant as a distinct product. Due to the high cost of designing and engineering a new model or establishing a brand (which may take many years to gain acceptance), economies of scale make it less expensive to rebadge a product once or multiple times than to create different models.

The term badge engineering is an intentionally ironic misnomer, in that little or no actual engineering takes place.

Cross Badging : Season 2.0

Toyota and Suzuki joined hands in February 2017 for long term partnership to collaborate in the field of upcoming hybrid and electric drivetrain, autonomous vehicle and slew of other futuristic technological areas to remain relevant in future and save cost in future product and technology development. In November 2017 press statement they have outlined the long term plan to introduce EV in India by 2020. Further in March 2018, for India they had short and medium term plan and decided to sell cross badged products in India and put up a compete and collaborate arrangement in place. Initially they have planned to supply vehicle where they don’t have direct presence. So Toyota will provide Corolla (Premium Sedan) to Maruti – as new flagship model, since Maruti has long unfulfilled ambition to go premium. In turn, Maruti will provide its best-selling sub 4m Brezza (C-SUV) & Baleno (Hatchback) to add to Toyota’s bottom end portfolio, and utilize its showroom space.

Cross badging or Badge Re-engineering concept in India is quite old. Hindustan Motor’s Ambassador (50s) was cross badged Morris Oxford (UK), popular Premier Padmini (60s) was actually cross badged Fiat 1100 (Italy). And then there are many like Chevrolet (Subaru, Daewoo, Isuzu, SAIC), Reanult (Dacia) et al.

But the current cross badging concept in India is little different. As in case of Ambassador or Padmini, only Indian badged product were on sale and not the foreign badge simultaneously in Indian market. This concept of cross badging and sale of same vehicle under two different brands in Indian market at the same time, targeting same consumer segment, was introduced by VW with group company – Skoda (2011), and later followed by Renault (2012) with alliance partner Nissan. Their products were identical except for the front facial which usually remains in line with the family looks of the respective brand. Incidentally both were late to Indian car market. Question is, has this strategy really worked as envisaged by the manufacturers. Let us see through the sales number analysis.

Platform sharing within group companies is very common but cross badged products just have cosmetic differentiation, more of a gimmick. Product cannibalization is obvious and is understood beforehand, as real objective is to achieve higher incremental sales, expand product portfolio at lowest possible cost and keep the showrooms busy with some real business.

Advantage

  • Quick to Market : New product development from scratch takes around 3 years, to move from drawing board to finished product at the showroom and new product on older or existing platform too takes at least a year. But cross badged products gets ready in just couple of months, which translate into better return on investment (RoI) at low risk, if product succeeds.
  • Low Product Development Cost : In some of the existing cases it was as low as ₹ 15 Crore as oppose to platform sharing which cost minimum ₹ 150 Crore. Badge reengineering involves minor tweaks in design and minor retooling at the factory and vendor level. So it calls for small incremental investment and improves RoI.

Challenge

Since Product differentiation is very low with no additional functional or emotional benefit for consumer, other than badge appeal; pricing, positioning and selling becomes a tricky task, as potential customer are well informed these days.

Cross Badging Season 1.0 :  Product Performance

VW Vento + Skoda Rapid

  • In short run it worked a little, slightly better incremental sales was achieved with acceptable level of cannibalization, when diesel engines were in high demand.
  • When Honda City came back with a diesel engine in 2014, it decimated competitors except for the new kid – Ciaz which has had a Value for money tag.
  • Within 2 years together, individual and combined market share shrink to half.
  • Together Rapid+Vento had better ranking but still never able to reach #1.
  • After 2017 Skoda Rapid update, it totally cannibalized VW Vento.

Nissan Sunny + Renault Scala

  • Sunny’s market share dropped to half after Scala’s launch.

Scala demanded price premium over the Sunny for not so familiar Renault logo then and it lost the plot in first year itself and later got discontinued due to poor sales.

Renault Duster + Nissan Terrano

  • Duster with all the bulges around looks like a mini Hippo but Terrano was more chiseled and give an impression of mini Rhino and for that it demands a price premium of ₹ 70k+.
  • Terrano though filled the Nissan’s product portfolio gap but was never successful in bringing volumes due to its pricing.
  • First mover advantage faded quickly with the arrival of formidable Hyundai Creta.
  • Duster is still able to hold but Terrano is almost on verge of discontinuation.

Nissan Micra + Renault Pulse

  • In very short run it worked very little as incremental sales was achieved but later very few were ready to pay ₹ 15k extra for Renault’s badge slapped on Micra.
  • Micra’s sales dropped badly after the launch of Pulse.

Platform Sharing

Products sold under different brands but made on same platform having same body shape either to serve same consumer segment at similar price point or to cater to needs of different consumer segment at different price point has actually produced much better results. Though it calls for higher investment but it helps in augmenting market much better.

Conclusion

Except for external design, logo and sales channel, products have had very little differentiation, in short no additional functional or emotional benefit for consumer except for the badge, in case any potential customer has some brand preference or loyalty. Eventually cheaper one did better or as in some cases, rather the one which actually survived.

But VW and Renault were new entrant then and products were relatively new and neither one enjoyed much of brand awareness in Indian market. Toyota-Maruti case becomes more interesting because both are deeply entrenched brand in their own right and product intended to be shared across the brands are best seller in their respective category. Toyota badge will naturally command price premium, so will they be able to sell already successful product at much higher price with mere cosmetic changes and get away with what newbies were not able to do? Also, will Maruti badge do justice to global best seller Corolla or end up eroding the brand image of Corolla, akin to what Zen Estilo did to brand Zen? Moreover rebadged Corolla will be real test for Maruti’s sales channel NEXA. After sales service of both the companies are benchmark in the industry, Maruti for its reach and Toyota for its standards. So providing service for cross badged product could be a challenge. Just imagine that the Toyota has to train service staff to manage the Fiat’s diesel engine too, unless they decide to offer only petrol or hybrid engine.

Well, history is littered with more of unsuccessful stories. So, will Maruti Corolla (Could be called Kizashi?) and Toyota Brezza & Toyota Baleno going to change that? Only time will tell, when products land in real battle ground. Because many a times customer or consumer do not behave in the same way as they state during market research process before the launch and that’s the biggest challenge for marketers and product planners.

Kia needs to be careful with the positioning of their products alongside the parent Hyundai in Indian market. Although their products are highly differentiated in terms of styling in the international market and with no baggage in India, Kia could use this as an opportunity to gain premium positioning in Indian market and fill the gap where Hyundai is not very successful i.e above ₹ 15 Lakh segment.

Different School of Thought

Departing from cross badging concept, Maruti in past has tried little different approach of launching two slightly different product at similar price point. Largely based on Steve Jobs (former Apple CEO) famous saying – “If you don’t cannibalize yourself, someone else will”. Maruti’s idea was to offer variety when potential buyer visits a Maruti showroom, so that there could be a better chance people leave the showroom with a Maruti product, and keep Maruti’s sales register ringing.

Wagon R – Zen Estilo

 

Zen Estilo was first move by Maruti to cannibalize its own product Wagon R by launching it at similar price point with slightly different body styling. Strikingly it was also available in pink color, never seen before in the industry.

Instead of cannibalizing Wagon R, Estilo was able to bring incremental sales and due to platform sharing, unlike old Zen, it was able to achieve cost synergy as well and offer better ROI due to incremental investment on platform. But Zen Estilo was never able to live up to the original jelly bean shaped Zen, in terms of sales. In Spanish Estilo means style, but it was more of a stylish Wagon R, (some sort of! rather than boxy wagon R), but never ‘stylish’ Zen. Original Zen was launched by Maruti in 1993, had first all-aluminum engine block and in those days it was sometimes regarded as first hot hatch.

Some feels that Zen Estilo, till its existence (2013), has had eroded the robust Zen Brand to certain extent, build over a decade. But then, product brand name can be resurrected based on product’s strength and the best example is Baleno. Currently the name plate is used by a very successful hatchback; you may relate to if you do remember the old Baleno name plate was used by not so successful sedan, launched by Maruti in 1999.

2014 onwards Wagon R was joined by similarly priced, Maruti’s guinea pig – Celerio. Since launch, Maruti has kept on experimenting with Celerio, for example – it was first to have AMT technology, now discontinued Maruti’s in-house developed 800cc two-cylinder diesel engine, and also the cross-gimmick called Celerio X. But Celerio doesn’t share platform with the Wagon R, perhaps upcoming next gen Wagon R might.

Ritz-Swift

Ritz was launched in the year 2009 and the approach was extension of Zen Estilo-Wagon R experiment and had more meat. Ritz and Swift were meant to cater two different segments of consumer. It seems Maruti has properly segmented the market based on consumer need and tailored Ritz to address a different segment. To elaborate, Swift was aimed at segment of single-young buyer looking for lively performance (advertisement slogan – “You’re The Fuel”), but Swift had a major shortcoming – small and not very practical boot and claustrophobic rear seat. Practicality of boot and rear seat space was key concern area for young buyers having family and their need was to have ample space for carrying luggage. With the Ritz, Maruti decided to address those needs by redesigning the same platform to generate more space at the back bench and practical boot space. On downside it became slightly boxy at the back, apparently designer tried hard to mask that effect but end result was not that exciting. Thus you will see Ritz in the fleet of Taxi aggregators, but never Swift.

Ritz too brought in incremental sales unlike the cross badged products from other manufacturers failed to. Product planning approach seems to be spot on but when styling became a key decisive factor for customer in purchase decision process, Ritz lost to Swift. So, Ritz was not upgraded when Swift transgressed to newer generation in 2011.

In both the cases Maruti was successfully able to augment the market. With success of Kwid, Renault became overambitious and decided to imitate Maruti’s old approach and take its product portfolio to next level with the Captur, but look where they have landed with overpricing and grown up hatchback styling, a reminder of S-Cross launch. When it comes to SUV, what works in Europe may not work in India, because Indian’s love SUV to have strong street presence just like the Americans. Maruti resorted to quick price cut followed by facial update to save the S-Cross. Hopefully Nissan has learnt a lesson before bringing Kicks to Indian market.

Honda’s Earnest Effort

Unlike Hyundai (i20 Active~15%) and Toyota (Etios Cross~7%), Honda put more effort while developing the cross-version of the hatchback. While Hyundai and Toyota cross-version only had side cladding, redesigned bumpers and roof rails to appear rugged, Honda redesigned headlamps and tail lamps completely along with the sheet metal in the front and the rear to beef up the stance with increase ground clearance.

Result is apparent, WRV is lot more expensive than Jazz but it is selling much better too because it is able to offer emotional benefit of C-SUV styling which consumer do value these day. Honda may bring in a proper 4m-C-SUV in future but currently it is riding on the SUV-craze wave much smoothly with WRV.

Bottom line, cross badging has not turned out be a gravy train as envisaged by the manufactures in the past but there are other innovative ways to augment market.

Leading Passenger Vehicle Manufacturing Countries (2000-2017)

In last 2 decades PV Manufacturing Countries have witnessed major upheaval. With rapid economic growth of world’s most populous Asian Economies, world is different now. Below is comparison of the year 2000 with 2017.

Data Source: OICA

OICA Vehicle Type Definition

  • Passenger Vehicles are motor vehicles with at least four wheels, used for the transport of passengers, and comprising no more than eight seats in addition to the driver’s seat.
  • Commercial Vehicles include light commercial vehicles, heavy trucks, coaches and buses.
  • With above classification, let us put the USA production numbers in perspective. Americans love pick-up, popularly called truck in the USA. They happen to be bestselling vehicles in the USA (like Ford F-150, Chevrolet Silverado, Dodge RAM), however, they are classified as light commercial vehicle (CV) and thus not reflecting in these figures. When it comes to CV, list is little different with the USA standing at pole position just like China in PV. Also, Mexico and Canada, leading exporter of CV to the USA, ranks #3 & #4 respectively. Thailand too is in the same league.

PV Production Market Share – Major Gainers & Losers

  • Till 2000 India was closely matched to China’s production numbers but after that China has witnessed exponential growth compare to India’s modest figures, which today made China the biggest, way ahead of any other country of the world.
  • The USA and France has seen negative growth in the period under consideration, and Japan and Germany has seen almost flat growth in growing global market.
  • Demand form emerging nations has grown and since these countries are having tariff (import duty) and non-tariff entry barrier (ownership through JV, local content requirement etc) in place, has ensured, automakers across globe to start local manufacturing.

Continent-wise PV Production Market Share

Subprime Crisis of USA (2007) followed by Sovereign Debt Crisis of Europe (2010), were the inflection point which dramatically shifted the base of production to Asia.

Crisis made Detroit giants to lose their Global #1 and # 2 ranks and prized assets of Europe were later acquired by Asian companies. In the hindsight, some of those who rushed for podium position to gain most from the misfortune of the American automobile giants were later mired in controversies themselves, like, Toyota (Takata-Airbags-Recall), Volkswagen (Diesel-Emission-Scandal), Nissan (Vehicle-Inspection-Scandal).

Asia

  • Fast growing markets of underdeveloped Asian countries of yesteryears have become new production hub; notable countries are China, India, Thailand, Indonesia and Iran.
  • Japan and South Korea are still very competitive and leading exporter.

Europe

  • Production base is slowly shifting to low-wage East European Nation.
  • Germany and Spain are still very competitive and leading exporter.

North America

  • North Americas low wage story is similar to East Europe, where production is being shifted to Mexico.
  • NAFTA is under re-negotiation, driven by President Donald Trump, may soon alter these numbers, in future.

Global PV Production Market Share

Global PV Production Ranking

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

Auto Industry Sales Analysis – April 2018

Source: AutocarPro

Segmentwise Sales Bifurcation
  • M&HCVs saw 169.26% growth! The sector has really seen some positive momentum post good monsoons and increase in infrastructure related activities. The growth in the segment is a positive indicator for the overall economy as well.
  • 3-wheelers is faring extremely well. While we thought the segment would slowly fade post the advent of 4-wheeler passenger and load options (Ex: Ace/Maxximo, Magic/Minivan); the segment is gaining strength year on year!
  • Two-wheeler segment too saw a double digit growth owing to good monsoons and growth in upcountry markets. With this, India shall continue to be the World’s Largest Two Wheeler market!
  • Though Passenger Vehicle segment saw a positive 7.5% growth; the industry has been inconsistent over months and apart from Maruti, all other OEMs are struggling to make their presence felt.
OEM-wise Passenger Vehicles Sales Statistics – Apr’18

 

OEM-wise Two Wheelers Sales Statistics – Apr’18

 

Commercial Vehicle Sales – OEMwise

Model-wise Ranking (2015-2018)

We are happy to present the Model-wise Best sellers for 2015, 2016, 2017 & 2018. For all years, we have considered Jan-Apr figures for apple to apple comparison (Ex: Jan-Apr 2015 figures are taken here, not the entire year).

Snippets:

  • Maruti Dzire is finally the best-selling car in 2018 (Jan-April period)
  • Maruti has moved up in value chain, now it is selling more ₹ 5 Lakhs+ products (Ignis+Swift+Baleno+Dzire+Ertiga+Ciaz+Scross) than under ₹ 5 Lakhs products (Omni+Alto+Ecco+Wagon R+Celerio)
  • Hyundai is more successful with higher priced volume-generating-products (i20+Creta)
  • Tata is making strong in-road with the new products (Tiago+Nexon), while Mahindra is still banking on old work horse (Bolero+Scorpio)
  • Renault’s wonder kid (Kwid) is in free fall (#7-#12-#16), high time for Renault to arrest the fall

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)