No ‘Civic’ Sense!

8th Gen Civic (Indian Model)

When Honda launched its D-Segment (Premium Sedan) offering – the Civic in the Indian Sub-continent during 2006; it never expected it’d amass such a fan following for years to come. The product was internationally the Eight Generation model and was an instant hit in India. It sold ~10,000 units in the first 6 months of the launch, a feat that the Japanese Automaker wouldn’t have even dreamt about. And yes, the model deserved the love and success it garnered then – It was generations ahead than the competition models available and it helped Honda enhance its premium brand imagery as well. Civic was Honda’s fourth offering in the Indian market – after City (1998), Accord (2001) and CR-V (2003). Civic set new records in the segment – over 17k units sold in a single calendar year and still holds the record till date. It was the segment leader in the first year of the launch itself and even the global best selling brands (like the Corollas’ or the Camrys’) couldn’t match its feat – the highest that a Corolla sold in India in a Calendar Year is ~10k units.

See how the Civic fared during the eight years of its existence in India –

The success run of Civic was halted by the global recession in 2009; and Indian consumers shift towards Diesel led them to opt for other brands (such as the Cruze). While Honda saw consistent decline year-on-year; it decided to pull the plug on the model in the year 2013. The intent was to focus on mass-volume models such as the Amaze (which was launched in Apr’2013). While we would’ve expected Honda to bring the Ninth-Generation Civic in the Indian market later; the Japanese manufacturer omitted it considering the low volumes it had to offer. However, the decision backfired and the OEM somehow weakened its tag as a premium car manufacturer. While the Civic saw an another upgrade with the Tenth Generation Avatar in 2016; Indian Consumers were kept away from it.

Honda has now shown signs of launching the Tenth Gen model in the upcoming year and it is definitely a positive sign from the Japanese Carmaker. The highlights of the latest gen Civic is as follows:

  • All New Design – Continuing the legacy; the Civic looks futuristic both from outside and inside. It has a very pronounced coupé-like roofline and a notchback rear section. It sports a bold chrome bar across the grille (which Honda terms as solid wing face design) and LED accents.
  • Engine Options – Honda is now equipped to offer both Petrol & Diesel variants in India. It has a wide range of options in hand – from a 1.0-litre turbo-petrol to a naturally aspirated 2.0-litre petrol engine, Honda is expected to bring the Civic with the new 1.5-litre turbocharged petrol engine as well. Also you could expect Honda’s 120hp 1.6-litre diesel engine that is currently on sale in international markets.
  • Better Chassis – As per Honda, the current-gen Civic uses the most sophisticated chassis in the nameplate’s history. An infusion of ultra high-strength steel has improved torsional rigidity by a massive 25 percent. This could lead to segment-leading driving dynamics.
  • Competitive Price – Considering Honda’s foothold in the Indian market for over 20 years, the OEM could stretch for enviable levels of localization and thus launch the model at a very competitive price.
10th-Gen Civic

We expect Honda to take the right call and launch the model as soon as possible. This will not only help it regain its premium badge but also enhance its overall volumes. The 16-20 Lakh Rupees segment is now devoid of options and needs a worthy product to revive the numbers – Civic could surely fit in here!

Passenger Vehicle Sales Rank – FY17

Model-wise Sales Rank for the cumulative figures of Apr’16-Mar’17 (FY17) –

SNAPSHOT –

  • 126 Brands from 17 OEMs reported sales in the previous financial year! The options are plenty in every segment and the competition was never so fierce.
  • Maruti dominates the roost and has 7 out top 10 models from its stable. Hyundai stands second and has 2 models in the Top 10 list. The only other manufacturer in the Top 10 is Renault (all thanks to Kwid).
  • India is slowly emerging to be a value conscious market – that is how Ford’s Mustang sold thrice the numbers that of Mahindra’s Vibe!
  • The overall growth for passenger cars in India was 9% and this year we surpassed Germany as the Fourth biggest Passenger Car market in the world. India is now the focus market for all OEMs – expect Kia & Peugeot to set up their shops pretty soon.

Cars Export Statistics – India – FY17

Near to 38 Lakh cars were manufactured in India in the previous Financial Year (Apr’16-Mar’17). And out of this, over Seven and half lakh cars were exported to different parts of the world. This means that over 20% of the production output is utilized in Exports – and hence the tag of ‘Global Manufacturing Hub’ holds true to India. Just to highlight the scale of Exports from India (>7.5 lakh units) – India exported more cars than the passenger car sales in countries like Argentina* (>6.9 lakh units), Belgium* (>6 lakh units), South Africa* (>5.3 lakh units), etc. The export numbers grew over 16% in FY17 when compared FY16. It was fueled by exponential increase in exports by OEMs such as Ford, GM, Renault & Mahindra. Let us look at the OEM-wise export volumes –

  • Similar to Domestic sales; the exports was dominated by the Top 3 players and they together contribute ~60% of the export volumes.
  • However, Hyundai is undoubtedly the No.1 Exporter of Cars in India. It has consistently utilized India to cater markets like Europe, Middle East and Africa. Just to highlight the reach of its export base – made in India Creta is currently being exported to 92 countries across the world!
  • Ford India is at the tail of Hyundai and with the current pace is all set to dethrone Hyundai as sub-continent’s biggest exporter! Ford export numbers grew to 43% in comparison to last year and is just 5k units short than that of Hyundai’s. Interestingly, the company’s exports were much more than what it sold in the domestic market – 91,405 units.
  • Maruti seems to be concentrating on the Domestic Market and the exports haven’t grown as expected. Though the models which made their global debut in India (such as Baleno) is being exported to other markets, the overall export numbers have not been quite significant. In FY17, Maruti’s export numbers was 1,22,039 units in comparison to Domestic Sales of 14,43,641 units.
  • GM has made commendable inroads in terms of Exports and is currently country’s 6th Biggest exporter. The focus of the American manufacturer has come in tough times where it finding immensely difficult to utilize its production prowess to cater to the local market. GM India currently exports the left hand drive Beat to countries including Mexico, Chile, Peru, Central American and Caribbean Countries (CAC), Uruguay and Argentina.

Exports from India have grew at at YoY pace of >16% when compared to YoY Domestic Sales Growth of >9%. It clearly signifies that the Made-in-India products are now able to clear global standards and our manufacturing prowess will be a boost to the sector. No wonder Global Products Design & Engineering is currently happening in India and more world-class products will be launched in the domestic market in coming future. This is indeed a positive sign for the Industry and we expect the export volumes to cross 10 Lakh units per annum within next 2 years!

*Domestic Sales for Calendar Year 2016 (Jan-Dec)

Indian Car Sales Figures – March 2017

March is generally a good month for Auto manufacturers as a lot of customers are scheduling their purchase considering the depreciation benefit. The buying is also preponed to March with the contemplation of Price Hike in April. The OEMs also offer aggressive discounts in March as it marks the end of the Financial Year and the OEMs performance for the Fiscal is also defined by March’s performance. Also to be considered here is that the consumers get clarity in terms of the Annual Budget and hence if any policy changes are there or not.

Mar’17 was no different – Indian Auto Industry grew YoY by 9% and it also reported the highest sales figures ever in a Financial Year (Apr’16-Mar’17). India saw sales of over 30 lakh units for the first time and also saw the highest growth in past 7 years! It also became the third fastest growing market in the world. The growth as usual was fueled by new launches. As many as 42 new models (including facelift and refreshes) were launched in past 15 months. As forecasted earlier by us, the Industry is surely in a growth trajectory and is poised for higher volumes in the coming year.  Let’s look at the Industry trend of past 7 years –

Source: ET

A look at the model-wise Sales for Mar’17:

SNAPSHOT:

  • It was a benchmark year for Maruti  – the OEM which known globally as a small-car maker and attributed its success with its strong portfolio of entry level hatches ; has now entrenched itself as a market leader in almost every segment! The strategy of bringing a capable model in every segment played off well with Maruti Suzuki India and the Nexa Channel too has reaped excellent results.
Source: ET
  • Mar’17 was an interesting month for Maruti – Baleno registered its all time highest sales and sold over 16k units! It emerged to become India’s second best selling car. Surprisingly no drop was seen in Swift’s sales as well (and hence no cannibalization evident). Also the photos of New Swift & Dzire indicate that the launch of refreshed models is near.
  • Ciaz saw a dip in sales (YoY) – The launch of New City has surely attributed and the transition from Maruti Channel to Nexa Channel could be the reason as well. While Ciaz’s stronghold was in Diesel segment – it is going to take a hit with the withdrawal of FAME scheme (and thus Diesel Ciaz prices are bound to increase).
  • Hyundai continues to encash Indians love for SUVs – sold the ever-highest numbers of Creta in Mar’17. Over 10k units were shipped from Hyundai’s manufacturing facility to its dealer partners. This segment (Rs.12 L – 20L SUV) was tapped earlier by Mahindra with XUV; however Hyundai topped Mahindra in its game and has achieved the impossible.
  • M&M was one of fewest OEMs to see a YoY degrowth in Mar’17. The Indian UV major is seeing major challenges in its home turf. The new models haven’t performed as per expectation and it is still dependent on its old warhorses (Bolero & Scorpio).  It is going to be a tough year ahead if the company isn’t able to bring exciting models in this fiscal.
  • Honda grew for the second consecutive month and was mainly supported by City & W-RV. The New City seems to have got tremendous response from the market and has helped the Japanese OEM to dethrone Ciaz from the top slot. WRV too joined the party and has done decent 3,833 units in its first month – the coming months will the real test for the touted Compact SUV.
  • The Product Offensive strategy of Tata Motors has surely helped and has made the Indian OEM to aim for the 3rd spot (by 2019). Happy with Tiago’s tremendous response, Tata launched its sedan version and has priced it well. Around 3011 Tigor’s were shipped in the first month itself.
  • We have no clue with what’s happening with the brand Chevy in India. Even with American Muscle and Breakthrough models (like Beat, Cruze etc) the OEM has been extremely lethargic in its approach and is slowly losing its ground. With the BS-3 ban coming to affect – its rural workhorse Tavera is going to rest now. Also the recent speculations of GM moving out of India has shocked us (News Link).

Top 20 selling cars of Mar’17 –

Top Selling Hatchbacks (entry & mid level) –

Top Selling Premium Hatches –

Top Selling Compact Sedans –

Top Selling Sedans –

Top Selling Compact SUVs –

Top Selling MUVs –

Top Selling SUVs –