Premium Hatchback Sales Trend – India

Indian market has evolved unexpectedly and OEMs are finding it difficult to plan their product portfolio citing the change in consumer mindset and difficulty in identifying the trends. We had coined the term ‘UV’ology in 2012 seeing the impressive growth of the segment and the influx of new models to cash in the phenomena (say Ertiga, Duster, Ecosport XUV etc). However, the trend slowed down in the UV’s and Indian consumers focus shifted to other segments. 
The reason the Premium Hatchback segment is being analyzed is:
  • – It is one of the fastest growing segment in 2015: The segment grew  astounding 276% in year 2015 v/s 2009. Also the growth was 96% in 2015 when compared to 2014.
  • – The Big 3 of the Indian Automotive Space (Maruti, Hyundai & Honda) now have a competitive product in the segment and will define their growth prospective ahead.    
  • – Percentage contribution of these models to their respective OEMs – Ex: i20 Elite+Active contributes to over 28% of Hyundai’s sales in India! The story is similar for Jazz as well where the model currently forms over 25% of Honda’s sales.  
A look at the sales volumes of the cars in the segment in past 7 years:

Sales Statistics
Growth Chart
Hyundai i20 remains the undisputed leader in the segment and in a way has defined the segment itself. Many players jumped into the premium hatch space, but were unable to catch the fancy of the Indian Buyer – Jazz & Punto saw initial positive response, however couldn’t gain the expected volumes. While the previous generation Jazz was discontinued in July 2013, even Punto faced issues crossing the >500 sales mark. 
Snapshot of major updates in the segment:
  1. * Hyundai  was the first automobile company to crack the segment and have the first successful product in the category. i20 set up new benchmark in sales over years and the current generation clocked over 1.5 Lakh unit sales in just 14 months (since its launch in Sep’14)
  2. * Hyundai was again a pioneer in the segment – It had launched Getz way back in 2004 and had to stop its production owing to poor sales in 2010 (it was refreshed as Getz Prime in 2007). The response for Getz wasn’t encouraging – however, it did not stop Hyundai to explore and launch first gen i20 in 2008 which proved to be an excellent decision and elevate Hyundai into the premium category. Even biggies like Honda were not able to make any effect with previous Jazz in the segment.  
  3. * Honda understood that it had lost a valuable pie in the premium hatch category due to hefty pricing of Jazz, which otherwise would have helped the Japanese major to gain volumes in the tough times (2009-2012). However, Honda realized its mistake and bought in the new Jazz with diesel engine option and announced an aggressive price with it. The car has seen assuring response and looks forward to grow even stronger in coming days. 
  4. Polo remains VW’s most successful product in its portfolio which highlights the response of the segment’s customer. Though the sales of Polo has varied over years, VW recognizes that a fresh update can renew sales to newer heights. 
  5. * Maruti too realized that the Indian customer would slowly shift its preference towards the premium hatch because of – 
    1. > Ease of maneuverability of hatches in crowded cities
    2. > Youth wants a compact, spacious and stylish car – all boxes ticked by a premium hatch
    3. > The current buyer wants a feature rich car and wouldn’t mind paying a premium for the same
  6. * The aforementioned reasons made India’s no.1 carmaker to enter the segment with its latest offering Baleno and also market it through a new channel – Nexa to deliver the premium message with the offering.
We expect the segment to deliver similar growth in coming time and do not be surprised to see other OEMs jump in this bandwagon. Baleno & Jazz again have a lot riding on their shoulders to define their respective OEMs performance in India. 

Top 10 Selling Cars of the Top 10 Cities in South India!

Management Punditz has been consistently studying the Indian Automotive Market and are pleasantly surprised by the complexity seen in the past few years. India is termed a sub-continent for a reason – its size, population, variety, culture  and demographics is multifaceted. Though we have been analyzing the car sales data for the entire country, we start our regional study with this post by reviewing the Top 10 cars sold in the Top 10 cities of South India. We had a specific reason to start with South India –
  • * South India contributes to over 28% of the overall National Sales Volumes!    
  • * Bangalore, Hyderabad, Chennai and Kochi – 4 cities from South rank in Top 10 car selling cities in India (source).
  • * The contribution of the states in South India is very similar – Karnataka stands highest and contributes to 27% of South’s sales, Kerala @ 26%, TN @ 25% and AP+Telangana @ 22%.
We have prepared a trend-wise chart (2012 to YTD 2015) of the Top 10 selling Brands to extract a clear picture. The sales data is presented by highlighting the All India Sales and then divided to South with further division to the respective states and later cities. Let’s see the statistics –
ALL INDIA

South India
KARNATAKA

Bangalore
Mangalore

KERALA

Cochin

Calicut
Trivandrum
TAMIL NADU
Chennai
Coimbatore
ANDHRA PRADESH + TELANGANA

Hyderabad
Vijayawada

Vizag

Points to Note (considering 2015 YTD numbers):
  • > While the Top 3 selling cars predominantly remain from the Maruti stable – Do see how Dzire easily takes the TOP slot in multiple markets. Also to be considered – Swift ranks no.1 in markets such as Cochin, Mangalore and Bangalore!
  • > Indica sells more than Alto in Chennai! Also Indica ranks 8th in South India ranking! Taxi effect probably (or say Ola!)
  • > City’s sales is higher than Grand i10, Indica and i20 sales in TN.
  • > Bolero, which is India’s best selling SUV is absent in the aforementioned rankings (except Coimbatore) – low brand equity for the SUV in South? Also, only XUV 500 remains the only other Mahindra product to feature in the Top 10 ranking (ranked 10th in Cochin).
  • > No. 4 rank is a surprise in many markets – Indica ranks 4th in Hyderabad, Grand i10 for AP+Telangana, Alto in Chennai, City in Coimbatore, Celerio in Calicut. 
  • > Innova’s sales in South is highest amongst all 4 Zones (South/North/East/West). South contributes to 38% of National Innova sales. Case is similar to Etios as well – South contributes to over 53% of overall Etios sales!
Oct’15 Top 10 statistics is also interesting for many markets:
  • – Baleno makes an entry in Top 10 figures of Vizag, Cochin, Calicut, Coimbatore & Mangalore. It has even surpassed i20 sales in many markets as well!
  • – South contributed to over 30% of Kwid’s sales – effect seen in multiple city statistics of South.
  • – S-Cross sold more than Creta in Hyderabad (Oct’15)
  • – Ford’s Figo and Aspire makes an entry in the Top10 slot in many markets!
No wonder many new OEMs entering the Indian market are finding it difficult to decode the success mantra! Do note that only Maruti has been able to consistently perform in ALL markets and is hence the Market Leader.

Indian Car Sales Figures – October 2015

October proved to be the blockbuster month that the industry was waiting for a veryyyy long time! Indian Auto Industry (Passenger Cars) proudly posted a double digit growth of over 20% and saw the likes of Maruti Suzuki, Hyundai delivering their all time highest performances respectively. Apart from Toyota, VW & GM; all other OEMs registered a YoY growth in October. (Trivia to be noted – Toyota, VW & GM are infact the top 3 car makers worldwide and are not doing that well in the subcontinent!). Let’s look how these OEMs fared –

Source – AutocarPro

 Festive demand was clearly evident and the aforementioned data also includes dispatches to dealers anticipating the Diwali rush as well. The new launches also supported the excitement and bought in higher enquiries to the respective showrooms. Gamechanger products were launched in Oct’15 – Baleno for Nexa and Trailblazer for GM. Though Baleno would be instrumental for Nexa outlets to jump in the volumes race; Trailblazer has a hectic task of reviving Chevy’s brand perception in India. Also to note the volumes of the most potent competition Alto ever had – Kwid. Let’s look on the model-wise numbers:

October 2015 Sales Figures – Pan India

— Dzire continues its dream run and crossed 20k figure for the third time in past 5 months! We have never seen a brand grow such rapidly at this stage of product cycle. Dzire is surely desired quite highly by Indian consumers and is breaking sales records consistently. With this pace, it would in meantime dethrone Alto from the top slot. Also to be noted is Eeco’s performance – which crosses 6k units after 36 months! We still wonder where these many Eeco’s go? Swift and Ritz deliver as usual. More important is the volumes Maruti is gaining through NEXA – S-Cross & Baleno together post 7246 nos offtake. With mere 100 outlets, 7246 units is very respectable and its contribution to parent company volumes is admirable as well. Seeing Baleno’s response and Maruti’s hold on the market; we expect the numbers to go even stronger in future.
— Hyundai is leaving no stone unturned to improve its market share in India and now has the right set of products infused in almost ALL segments. Eon & i10(entry-level hatchback), Grand i10 (hatchback), Elite i20 (premium hatchback), Xcent (Compact Sedan), Verna (C-segment Sedan), Elantra (D-segment sedan), Creta (Crossover SUV), Santa Fe (premium SUV). Only MUV is not being catered to currently. Grand i10 crosses 14k mark for the first time and and stands only 3.5k units short of the segment leader Swift!
— Mahindra makes a strong comeback into the third position. TUV300 maintains its 4.5k mark and contributes decently to the Indian SUV major. Happy to see Bolero cross 7k figures after 4 months – it is imperative for M&M to inhibit cannibalization of Bolero from TUV and vice-versa. XUV 5 double ohh also joins the party by having its best offtake performance of past 35 months!
— Honda impresses with YoY growth (52.29%), however loses its third position to Mahindra. City & Amaze makes into the top 10 selling cars list. Jazz now seems to stabilize at ~4.5k units and we expect similar volumes ahead as well.
— Ford crosses 10k mark for the first time after Sep’2013! Ford now has the right arsenal in its army and its time for it to conquer its territory.

Top 25 selling cars of October 2015: