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 Maruti Suzuki had an offtake of 38,065 numbers of Alto in March’11 – the figures of Alto had superseded the overall volumes of Hyundai’s all models combined in the particular month!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.