India’s most Dzire’able car!

Dzire has been the most successful car in the past 2 months and its volumes have just baffled the analysts. It is not easy to beat the current bestseller (Alto) and Dzire has just been able to do it with considerable ease. So what making the Dzire such a heartthrob?

Recent Phenomenal Growth in Dzire’s Sale

  • 3rd generation of Maruti Suzuki Dzire was launched in India on 16th May 2017
  • Has recently touched the phenomenal mark of 30,000+ for two successive month, quite surprising for a car which cost ₹ 6+ Lakhs  in India

  • Since 2012 it came in close vicinity to Alto’s sales number, Alto still holds the crown of bestseller in India
  • In some of the months Dzire has snatched the title of bestseller as well
  • Just note, later is an entry level hatchback and former is a sedan version of premium hatchback

Undisputed Leader

No doubt Swift Dzire has its core strength but often makes me wonder, is it by design from Maruti Suzuki or is it really a miracle- for both Maruti and Indian customer alike. Competitors came, tried and failed!

Dzire

It is a product which has outlived its own name “Dzire” to become “Addiction”. To me previous avatars do look good in parts but not as a whole, due to awkward proportion. Recent iteration looks more akin to compact sedan.

Generation-1 (2008)

  • Side profile looks like two disparate cars stitched together
  • A near full size sedan having heart and body parts from hatchback model and ultimately cannibalized grown-up stable mate SX4

Generation-2 (2012)

  • Set the charts on fire, though looks like a truncated boot latched to a hatchback
  • Second offering in the unique to India  4m sedan segment, first being Tata Indigo CS – the real innovative answer to Government’s tax laws

Generation-3 (2017)

  • More sublime design and looks good in whole
  • Packaged well with all modern features and gadgets on select variants and safety features on all variants with option of economical automatic transmission system on all variants, except the base one

 Hypothesis : Is this mere a Spike or Sustainable-New-Normal for Dzire

May be “Yes”

  • Despite cut throat competition in the segment, demand is strong, right now there is 2-4 months of waiting period for the car
  • For reference, consider this – Maruti Suzuki has to dish out cash discount of ₹ 25000 on Wagon R to get it out of the showrooms in this festive season
  • New plant in Gujarat has gone on-stream so Maruti Suzuki does not have production constraint

May be “No”

  • Numbers for Dzire started tapering downward since the introduction of Baleno in 2015, as both jostled for same sub – 4m length footprint, in different body forms
  • Essentially Baleno has started cannibalizing both the stable mate – Swift & Dzire, but it was deliberate and well thought out strategy from Maruti Suzuki, as it added more numbers to its overall kitty and catered to overlapping needs of different buyer-segment

  • Recent spike could largely be attributed to initial dispatches, which were too low in May and June, may be due to steering column issues, as reported by few insiders and published on the internet, thus Maruti Suzuki is making up for the lost time – as it is yet to reach it monthly average peak of 2015, for whole year

“For now it seems to be more of a spike, but in future, as this miraculous car’s story unfolds, 30k+ could be new normal!”. Or can the New Swift change the trend?

Note : Only Maruti Suzuki stable is considered for this analysis, as all of the products are respective segment leader.

(The article is written by the Newest Pundit on the team – Rohan Rishi. You can connect with him emailrohanrishi@gmail.com)

Mahindra XUV 500 – Cheetah that killed a Segment!

Mahindra XUV 500 was launched in September 2011. XUV 500 – read the ‘00’ as O as in superstiti‘O’n.  Ever wondered why after Mahindra Armada all Mahindra’s vehicle names ended in “O” – BolerO, ScorpiO, XylO, VeritO, QuantO, NuvO(Sport)?  Good they have not rebranded themselves as “MahidrO & MahindrO”.

Jokes apart, XUV 500 was indigenously designed vehicle inspired by Cheetah, the animal which we don’t have in India since 1947. And it is quite a design, aggressive and butch in front and sporting muscles all around though looks little MUV like from behind and rear three quarter. It has cheetah inspired, claw like door handles, never seen before in India and it had whiskers too ingrained in front bumper design. Though it shed those whiskers when it got a facelift in May 2015. In human parlance how many actors since 90s use to sport a prominent moustache, barring Anil Kapoor! It had very strong diesel engine and if you recall the post 2008 economic crisis period diesel was tasting ever sweeter because of high price differential between petrol and diesel caused due to lopsided fuel subsidy policy. Unlike its younger sibling Scorpio it was more car like, having monocoque chassis and appeared more sophisticated thus appealing to urban dwellers.

This cheetah had claws with real killer instinct and it hunted down an entire segment of sedans which I christen as Premium Sedan (4.6m) – comprising of still in production but struggling for numbers – Toyota Corolla, Hyundai Elantra and Skoda Octavia, others just got discontinued over time.

*For apple to apple comparison monthly average sales figure is considered, since launch till they got discontinued

Price-Wise This Is How They Stack Up

Segment Classification

For effective segmentation instead of following conventional A, B, C, D category of classification, I tried to personify each segment, what it stands for. Length is considered as primary factor because it defines the footprint of the vehicle and proxy to the overall size and space it offers. Secondary factors are price and positioning. Having said that, some products are really difficult to perfectly fit into well-defined segment. If you see the below classification, XUV500 is case in the point.  Thus, such product may be able to create a unique position for itself, redefine the market and prove to be a differentiator or may land them in no man’s land.

Mass Market Sedan Segments

Mass Market SUV Segments

 

Premium Sedan (4.6m) Segment

This segment came into existence with Skoda Octavia, launched in 2002. It filled in the void between executive segment sedan and luxury segment sedan. Also known as mid-segment, it offered more space inside, with bigger engines in tune of 1800cc for petrol and 2000 cc for diesel engine. Larger space means it qualifies for premium category and larger engine means superior performance. Priced above Tata Safari at that time, still attracted quite a few buyers because of refinement on offer, especially in urban concrete jungle. These cars were ideal for chauffer driven back seat passengers. So if you want to differentiate your status and cannot afford Mercedes at 20 Lakhs, you had a choice.

Over the years new cars got added and pie expanded, accommodating all brands. Competition was from within the segment and not from segments placed above or below. Segment started seeing decline when petrol prices started touching roof as market leaders namely Corolla and Civic came only in petrol avatar and executive segment cars like Honda City started getting more premium touches than before. Launch of XUV 500 has caused free fall of the segment, now majority of them are discontinued and manufacturers do not have plans to re-launch them.

  • Octavia (Skoda)

2002-2010 

The car which actually kick started this segment. Before Octavia there was large void in sedan segment between likes of Mitsubishi Lancer and Mercedes Benz C200, bottom end of Luxury segment. Powerful TDI engine won the heart of many and made them believe that diesel engines could be refined too. It had tank like build and diesel engine propelled like rocket for first time in India at price point of 10 Lakhs. So  2002 onwards, if you want to buy luxury car and cannot afford Mercedes Benz you had a choice.

2013+

Octavia brand resurged after demise of Laura. Car was wearing new family look with crisp lines all around. With option of powerful petrol and diesel engine it is still posting good numbers despite being called niche and not mainstream anymore.

  • Corolla (Toyota)

2003-2008

Best seller globally and Toyota reliability has given instant success to Corolla.  

2008-2014

After launch of Civic, Corolla started feeling as it looks dated in that comparison. Toyota brought in the new generation Corolla to retain its pole position. Initially launched in petrol, it was later joined by diesel though low on power but high on fuel economy.

2014+

This model adopted Lexus inspired design and had added level of flamboyance. Now its third iteration in India is still having leadership position in the segment.

  • Elantra (Hyundai)

2004-2008

Hyundai is the company which has introduced modern engine technology in mass market of India, namely MPFi Petrol and CRDi Diesel engine. Elantra had both of them in powerful avatar, and packed with all bell & whistles, however, it never was exciting to own in the company of Corolla, Octavia and Civic.

2012-2016

In second iteration fluidic design did the magic, it looks like sport car in sedan body. That helped become segment leader for short moment before Corolla snatched the crown back. Numbers tapered down quite fast despite having looks inside-out and powerful engines.

2016+

Third iteration is here now with restrained fluidic sculpture, but number suggest it has lost the game from very beginning. May be not very good time to be in this segment.

  • Laura (Skoda)

2005-2013

This model was replacement of Octavia globally. However, following Maruti and Hyundai’s footstep Skoda retained Octavia as is and positioned Laura above it. Idea was to have incremental volumes from Octavia. Indian context it worked well as Octavia aged well. In 2009 it came up with face lifted version which continued to soldier on till 2013 when it passed the baton to Octavia brand. Laura like all Skoda had strong build quality and lovely diesel engine. Skoda brand itself is considered premium and people love their diesel engine. After-sales-service was, and is, something which people don’t love about Skoda in general.

  • Optra (Chevrolet)

2005-2012

Chevrolet introduced Daewoo Nubira as rebadged Optra in Indian market. It was positioned at lower end of spectrum and it did compete with Honda City. Designed by Pininferina, it was refreshing to look at. In 2007 it was given facelift and had almond shaped headlamps. It continued till 2012 and used to clock good numbers, though positioned below the stable mate Chevrolet Cruze.

  • Civic (Honda)

2006-2012

Civic was launched in petrol only as Honda did not have diesel engine. It was quite unique offering, having sport car silhouette. Look at it from rear and it looks similar to Ferrari because of twin pot tail lamp. Younger buyers jumped off Corolla’s wagon to get into Civic. It was enthusiast car with top notch performance. Step inside and you will be welcomed by driver centric aircraft like cockpit with digital console never seen before in India. On the downside boot space was small and ground clearance was too low that it always scrapes its belly on Indian roads. Non availability of diesel power plant and high petrol prices after 2008 economic crisis has pulled its number down and finally Honda pulled the plug in 2012.

  • Jetta (Volkswagen)

2008-2011

Jetta was part of VWs entry journey into India. VW followed a top down approach by introducing premium products to establish its brand. Positioned alongside Skoda Laura, it has same family characteristic of strong build quality and sweet diesel engine. To me this generation Jetta’s headlamp resembled that of Tata Indica, slightly more rounded.

2011-2016

2011  version followed a completely new family look. Sharp and crisp lines running around and used to resemble a man wearing tuxedo. In fact all VW cars look smart but very much identical, some time you have to see them from side to identify who is who, based on the length. Skoda’s numbers were always higher then Jetta and people perceive Skoda to be more premium.  2016 numbers reduced to single digit and VW threw in the towel. Now question is whether VW decides to bring in MQB platform based Jetta. Seems unlikely.

  • Cruze (Chevrolet)

2009-2017

From beginning it was available only in diesel. Engine was really powerful and had made quite a fan following for itself. Owners love to modify their vehicle and tried to add more x-factor. With Chevrolet now shutting shop here in India its goodbye Cruze.

  • Fluence (Renault)

2011-2016

Renault has followed top down product introduction approach in India. By launching premium product first to establish the brand. Unlike other cars in this segment, it never had any unique proposition to entice the prospects in particular and onlookers in general and died very quickly, unnoticed.

Cheetah and The Killer Instinct

XUV 500’s value proposition for customer can be summarized as

A spacious 7-seater SUV having appealing design and powerful engine packaged well with all the bells & whistles one can imagine for urban dwellers at an aggressive price point undercutting a segment above by a fair margin

Sweet sweet diesel

  • Instinct : Powered by punchy 140 BHP diesel engine only, which has performance on tap and good fuel economy
  • Defense : Sedans were on par and exceeded performance but all of them didn’t have diesel at enticing price point

SUV – lifestyle and aspiration oriented

  • Instinct : High ground clearance is good for Indian roads and SUV do provide commanding position from inside out.
  • Defense : Sedans are more aerodynamic and have good handling characteristic with less body roll due to low center of gravity. But buyers get carried away by aspirational value.

Bigger is better

  • Instinct : Has lot of bulk and enticed those who just want a vehicle which is bigger than their neighbor’s.
  • Defense : Sedans have similar footprint but not the bulk.

3 rows of seats

  • Instinct : Could accommodate 7 or 5 with tons of luggage.
  • Defense : 5 seater but mostly good to carry 4 in comfort. Luggage space is good enough but not great as UV.

Bells and whistles

  • Instinct : Cramped with features of a segment above like touchscreen infotainment system, voice command, auto headlamp and wiper, day time running LED with bi-Xenon projector headlamps and later saw an addition of sunroof and electric driver seats – all this and sold at price segment below.
  • Defense : No sedan was equipped to that level at given price point. Buyers love gadgets both functionally and emotionally.

Virtually no competition from SUV pack

  • Instinct : As Mahindra had cleverly identified the sweet spot and offered more car per car.

Note that, XUV is not best SUV to have either. First the ride is quite wobbly, step inside and dashboard plastic feels little tacky and 3rd row of seats are meant for children only. Still it wins heart over mind.

The Other Hunters – Hyenas

Executive sedan (City, Verna, Ciaz, Vento, Rapid, Sunny)

Have started inching closer in size, more premium and feature rich, though seems slightly underpowered in comparison to elder segment siblings, still a plenty full  for the mass market. They started encroaching the segment from below by offering higher value for lower bucks.

Compact SUV (Creta, Duster, S-Cross, BRV, Terrano)

One can easily argue that compact SUV segment, which was kick started by Renault Duster, could also be considered as a factor that brought down an entire segment. Yes they emerged around 2012, however, they were a notch below in terms of pricing, dimension, engine size and power output. Though less bulk but still have quite a charm of a SUV to lure customer away with budget inching to 15 Lakhs.

Now they are hunting down another Sedan segment in India. See the graph.

*For apple to apple comparison monthly average sales figure is considered

Hunter Is Now Being Hunted

Yes, of late XUV 500 is also witnessing a decline in sales, but it is a normal lifecycle decline which every product will eventually have, except with few notable exceptions like Mahindra’s own Scorpio and Bolero, and Indian’s beloved Toyota Innova. These vehicles have lived beyond their grave, which in India is around 6 years from launch, including mid-term facelift within 3 years.

Moreover story of XUV 500 now is more of a hunter who is now being hunted. There is huge onslaught of SUV in the 15-25 Lakh ₹ price bracket. Ones which are really heating up the competition are discussed ahead.

Current Pack

  • Hyundai Creta

Though a segment below offering, still has power to punch above its weight. Strong engine, premium interiors and has all bells and whistles. It undercuts XUV 500 price and someone looking for just 5 seater, compact and under 15 Lakh ₹ budget, usually looks no further.  That’s what makes it leader in 10-20 Lakh ₹ segment range.

  • Toyota Innova

King in its own right. Had a presence in India since 2005 as a replacement of Qualis. It made a space for itself on its own and never ever looked back. It had a very steady sales data with ever increasing price. No, it didn’t killed the Premium (4.6m) sedan segment, as at the same time, the segment under question flourished well, together.

Crysta – the new iteration exudes more premiumness and seems to be owned largely as personal car now and fleet operators are having less affinity, due to higher pricing. Unlike its predecessor, which was loved both as personal car and premium taxi. Despite being owned as fleet vehicles across India it never lost its premium personality, thus loved to be part of personal car (though it is utility vehicle but inside it feels like a CAR) and that’s just opposite to what happened to Tata’s Indica-Indigo sibling.

  • Tata Hexa

Doing well as compared to its predecessor Aria, and gaining acceptance like never before (just look at Aria’s number). It is quite surprising that Tata chose Aria for another round and not the Safari. Still no match for XUV 500’s number in initial lifecycle phase.

  • Tata Safari

The forgotten underdog. Well Tata never did justice to the product or the brand when it was launched as new generation, on 5th  January 2012, badged as Tata Safari Storme. It received Tata Aria’s underpinning. Looks were kind of sissy as oppose to Hulk it used to be. And look, they even forgot to design an integrated  audio system and fitted aftermarket CD player from the previous generation. They missed a huge opportunity and how!

Remember how Mahindra was successfully able to pull off the same trick for Scorpio. Underpinning has undergone transformation but body shell was retained. The trick was having meaner and angrier looking SUV, packed with goodies and that’s what personality people look for in SUV – intimidating!

  • Jeep Compass

The original Jeep, having grill design which was borrowed by Mahindra in 50s. Now seems to be pointing in right direction for FCA. It is already giving jitters to XUV500 and Hexa which is apparent with Tata and Mahindra’s current advertisement. Pricing of Compass is very aggressive and its acceptance can be seen in the numbers it is doing and bookings it has garnered.

  • Hyundai Tucson

Overpriced & lost in oblivion. Hyundai never had success in terms of numbers for anything priced over 15 Lakhs – Elantra, Sonata, Santa Fe. It is still finding it difficult to transgress the mental boundary created into the minds of customer to differentiate between premium tag it claims for product like SantaFe. Had Tucson been priced starting around 17+ could have made its presence felt or become a star like Creta!

  • Honda CRV

Right now it is an overpriced petrol-urban-soft roader. May be a diesel heart transplant in future and new design can change its fortune. That’s highly likely, unless Honda gets greedy and loose its thinking cap, and end up with poor pricing.

New Members Joining the Pack

  • Renault Captur

Soon to be launched. More premium than Duster but need to be priced right otherwise it will meet the fate of Tucson.

  • Skoda Koraq

Seems highly unlikely that it will be priced below 20 Lakh. But less likely to meet fate of Tucson as in India Skoda is still considered as premium over its parent VW brand. It is given that success and failure will be decided in real battle ground, pre-launch assumption does not help much.

  • Maruti Suzuki Grand Vitara

Previous launch was commercial failure. Brought in as CBU it was overpriced for a car having steering wheel and power window switch from Swift. It was available only in petrol guzzling engine and never had  butch SUV appeal. Now things have changed for Maruti, with Vitara Brezza being a success, older sibling may make it presence felt and catapult Maruti in premium segment, if priced aggressively.

  • Nissan Kick

Nissan want to replay the Duster-Terrano story with Renault launching Captur. This time hopefully it is not just the badge swapping with cosmetic surgery.

  • Honda HRV

Not sure if Honda will be able to position in 15-20 price bracket, if it can with a diesel heart than its better choice over Civic.

  • Toyota Rush

Despite having competent product in its global portfolio that fits well in Indian segment, Toyota has never given serious thought. It is an opportunity to fill the gap what Corolla is ceding now. May be Toyota does not want to cannibalize Innova in the price bracket but lower end of spectrum still looks like sweet spot.

(The article is written by the Newest Pundit on the team – Rohan Rishi. You can connect with him emailrohanrishi@gmail.com)

Indian Car Sales Figures – July 2017

July’17 was a transition phase for the Indian Auto Industry from a pre-GST era to the post-GST economy. The prices of majority of the models were cut due to the change in the taxation structure. The government’s stand on Hybrid models led the steep increase in the prices of Ciaz/Ertiga SHVS, Accord Hybrid, Camry Hybrid, etc. OEMs like Toyota, Maruti, Mahindra pushed their vehicles enough to compensate June’s loss and as a matter of fact Toyota grew a stupendous 800% in July’17 when compared to June’17! Maruti’s Nexa bet has played off really well and what they have done in the Indian market is nothing short but magical. Nexa could sell 32,860 with all its models combined! – At this speed, we could see Nexa overtake Hyundai’s numbers in coming time. Also splendid is Maruti’s numbers from its traditional channel (i.e. without Nexa) – It sold 1,20,438 units from its traditional models. The Product onslaught and differentiation in brand positioning is surely a case study for the other Global MNCs.

July’17 saw a YoY growth of healthy 15% and MoM growth of over 50%! The spurt was primarily due to the upcoming festive season in August (Rakshabandhan, Varamahalakshmi, Janmashtami, Ganesh Chaturthi to name a few). As requested by one of our reader, we are happy to present both MoM & YoY analysis in this month’s post. Do see how the OEM’s fared –

In MoM performance, only 2 OEMs experienced de-growth (GM & Nissan). Also in YoY analysis – apart from Renault, Nissan & GM; all OEMs saw a growth in their volumes. While GM is out of the game; the decline in numbers at the Renault-Nissan alliance is a serious concern to their global ambitions. The Alliance is in a close competition to become the Global No.1 and their Indian performance will be vital. July’17 also saw the birth of an Iconic Product – Compass. The pricing has been sweet and has already sent terror waves amongst the rivals. The Compass saw dispatch of 935 units and helped Fiat rub shoulders with Skoda’s volumes. We are positive about Compass’s potential to revive FCA’s fate in India. Let’s look at the modelwise analysis here:

Highlights:

  • Maruti & Nexa are on a roll – and the break through success of their two key products (rather new launches) was the key. Maruti’s Brezza & Nexa’s Baleno – Both crossed 15k units and were positioned in the Top 5 selling cars of July’17. Also commendable is Alto’s performance over years – It still sold >26k copies and could easily outshine its capable competitors (namely Kwid & Eon). Dzire numbers saw a hitch (we suspect a production concern after the steering column recall) or else it would’ve been much better. Even Dzire was the fastest product in Maruti’s stable to garner over a Lakh Bookings!
  • Hyundai has been on a backfoot after not that great success of Refreshed Grand i10 & Xcent. With Compass launch, it’ll be a difficult ride for the easily selling Creta as well. Hyundai is now overly dependent on i20 & Creta. Here’s what Hyundai’s strategy is – the launch of Next Gen Verna! Yes, New Product Launch is the key to success in Indian market as of today. Hyundai has timed the launch pretty well in the festive season and we are sure that they’ve aligned to production to get the volumes on board. It’ll definitely be a tough fight in front of the mighty City & Ciaz.
  • Mahindra XUV sold over 1200 units lesser than the Fortuner in July’17. That’s how ruthless the Indian market can be! The Indian consumer is now seeking value more than cost and has become ever brand conscious. And things have turned pretty difficult for the Indian OEM – losing its UV-leader crown to Maruti and the dropping volumes. However, the strong rural demand and acceptance is shielding it from the debacle.
  • Honda’s raking the moolah with the recently launched WRV. The Compact SUV from the Japanese OEM has got a wide acceptance for being Feature-rich, Butch looks and Decent Price. It has overtaken Ecosport’s volumes for second consecutive month and has also registered itself as the best selling Honda model for the month of July’17!
  • Tata is in the news for the forthcoming launch of Nexon. The product has got some seriously good reviews and looks promising. After Hexa & Tigor’s average success; Tata has a lot riding on the Nexon. We believe Nexon has all the ingredients to seal Tata’s position in the Top 5.
  • Toyota saw the highest fall in prices of its models post GST and the same reflected in their volumes as well. It sold crazy 9369 units of Crysta in July’17 made it the No.1 selling MUV of July’17! Similar was with Fortuner’s volumes – It sold over 3400 units and placed itself as the Best Selling Premium SUV!

Look at Top 25 selling models of July 2017 –

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 –

State-wise Car Sales Statistics – FY17

We have been closely tracking the state-wise car statistics in past 1 year. You can find the previous posts on the topic here and here. Indian demographics have always amazed us and the trend is very volatile. The same is seen in the statewise sales data as well. Ex: Kerala was the No.2 state in terms of Passenger vehicle sales in the first half of FY17, fell to No.5 position for the entire year. The other startling fact to be reiterated here is Maharashtra as a state alone sells more than 13 states in East Zone! Also there is no state from South Zone in the Top 3 states of FY17 (while South Zone is the second best zone in terms of numbers)! Also to be noted here is the volumes of Delhi market (without NCR sales) is over 2 Lakh units in previous FY.

The intent of this post is to highlight the contribution of individual states in overall passenger car sales and how seasonality effects sales in various regions of the sub-continent. A look at the Top Selling States for Apr’16-Mar’17 period:

Do find the Quarter-wise analysis here:

Export Statistics – FY17

As always, we are happy to present the most comprehensive data from the Indian Auto Industry. India has grown as a viable manufacturing hub for the Automobile OEMs and the lower costs have given the subcontinent a strategic edge. The OEMs have invested heavily in the local manufacturing facilities and Exports give them an opportunity to leverage on the Production Capacity from these plants. India had already beaten China in passenger car exports for the fiscal year 2015-16. According to numbers collated from SIAM statistics, Indian passenger car exports for FY2016 totaled to 532,053 units. This was higher than Chinese passenger car exports for the fiscal – 409,800 units – which were recorded by the China Association Of Automobile Manufacturers. The scenario was equally buoyant in FY17 and Car Exports rose upto 16% in the time period.

The rise in exports was fueled by the OEMs who were struggling in the Domestic Market and Exports was the only option for them to utilize the capacity (and hence become profitable). The Top 5 Exporters included OEMs such as Ford, Nissan & VW whose Indian sales are far from being satisfactory. However, Hyundai retained its No.1 slot and emerged to be the country’s Top Exporter in last fiscal. Find here the OEM-wise export numbers:

Notable volumes recorded by GM, Renault and Mahindra in FY17 – they have realized the benefits of having a strong export base and have taken the right steps to encash it. To our surprise, there was not a single Hyundai model in the Top 5 exported cars list (while Hyundai as an OEM was No.1!). Ecosport led the rankings and was followed by Vento. However, Beat did extremely well and jumped to the 3rd position in the rankings table. Look at the Top 30 exported cars from India:

While the exports of Cars was encouraging; 2 wheeler OEMs struggled in the previous financial year. Two wheeler exports fell by 6% in FY17 when compared to FY16. The de-growth was led by the Top 2-wheeler exporter – Bajaj Auto. Bajaj’s export volumes fell by over 16% and this came at a time where its domestic volumes was also under pressure. This would have surely hit the bottom-line of the Indian OEM and its dependence completely on bikes could be attributed as a reason. Here’s the list of the Top Two Wheeler OEMs in terms of Exports:

The OEM which grew significantly in exports was Honda – and it was led by its scooterette Dio. Also note that Dio was the only scooter in the Top 10 exported Two-wheelers (the next scooter in the rankings was TVS’s Wego and was ranked 16th!). Honda also remains India’s top scooter exporter from the country and about 36 percent of company’s overall exports are scooters! Honda also surpassed Hero’s export numbers by over 1.30 lakh units to become the third largest two-wheeler exporter from India. Hero Moto Corp exported 180,391 units in FY17.  Let’s see the Top 30 Two wheeler Export models :

TVS’s exports grew by 1.56 percent as it exported 44,572 units of scooters, over 2.99 lakh units of motorcycles and about 20,152 units of its mopeds. Overall, the company exported about 3.64 lakhs units in FY 17 as against 3.58 lakh units in FY 16. TVS currently exports to over 50 countries in Asia, Africa and Latin America!

About 12 percent of the total two-wheelers manufactured in India were exported to global markets. FY17 also saw highest ever exports of scooters at above 2.93 lakh units.

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)

State-wise Car Sales Statistics – Update

While we had presented the first half state-wise sales in Dec’16, little did we know that the scenario will change drastically in Q3 (Oct-Dec). In this Quarter, West overtook South Zone by quite a margin and Maharashtra remained unshakable at the Top Slot. However, with Dusshera & Diwali spearheading West Zone’s numbers – Gujarat was able to dethrone Kerala from the Second position. A look at the Top Selling States for Apr’16-Dec’16 period:

Do find the Quarter-wise analysis here:

  • Maharashtra alone sells more than all 13 states of East Zone combined!
  • Around an average of 177 cars are sold/month in Mizoram! The perks of such low numbers would be considerably low pollution levels in the state. Do plan your next holiday here 🙂
  • Gujarat’s growth trajectory has been inspiring. Cities like Ahmedabad, Surat, Vadodara, Rajkot, etc have done extremely good numbers and the prosperity of these cities is clearly highlighted in the statistics.

Clash of the Titans – City v/s Ciaz

The C-segment was a comparatively dull segment earlier and the volumes here were never that significant. Also the segment was majorly dominated by Honda’s City wayback since 1998 itself. Many OEMs tried their luck here, but volumes were never that encouraging. However, many OEMs performance still depends on the sales performance of their respective offerings in the segment – To name a few Honda (City), Skoda (Rapid), VW (Vento), etc where the models contribute ~50% of their overall sales. The segment was again ruled by the so called ‘PREMIUM’ car manufacturers since the beginning (erstwhile Opel Astra, Chevrolet Optra, Toyota Corolla, etc were preferred during their times). Mass market OEMs always wanted to have a major pie in this segment – Hyundai was successful with its Verna (for a limited period) and even the SX4 was Maruti’s attempt to break into this category.

But only 1 model evolved to be the undisputed leader in the category – Honda’s City. It sold over 6.5 lakh copies since 1998 and is still going strong. However, Maruti changed the dynamics in the segment and gave Honda a good run for its money. It clearly outsold the market leader in 2016 – Ciaz sold 63,187 units in the year 2016 when compared to 57,619 units of Honda City sales within the same period. Ciaz’s more feature and lesser price played the trick and made it the market leader.

Let us see what helped Ciaz gain the lead in 2016 –

  • Fuel Efficiency: With SVHS for Diesel and lower spec Petrol, Ciaz raised the bar in Fuel Efficiency and offered segment best figures. Petrol claimed ARAI mileage of 20.7 kmpl and Diesel Hybrid offered a mileage of 28.09 kmpl. These kind of fuel efficiency figures were literally unheard in the segment.
  • Price: With SVHS, Maruti could play the price card much better – with subsidies for Hybrid vehicle; the Diesel Ciaz was now almost equivalent priced to the Petrol variant! This allowed the customers (particularly from Tier 2 & Tier 3 cities which were Maruti’s stronghold) to easily upgrade to a C-segment sedan.
  • Feature-rich: It evolved to be the widest and longest car in the segment. Also it offered projector headlamps as standard in all the variants. Higher spec variants also offered a much advanced 7’inch Infotainment system (compared to smaller 5’inch system in City).
  • Maruti’s Network: All are aware about Maruti’s enormous Dealer Network. This particularly helped Maruti gain in-roads in Rural market where Honda was comparatively weak.
  • Maruti Service & Reliability: It became a big factor for customers who were upgrading to the segment. Low maintenance assurance and ease of service worked for Maruti.

Honda’s retaliation was in Feb 2017 – It launched the mid life facelift for the City and launched it on 14th Feb. As the dispatches of the new model started in Jan’17 itself the Japanese OEM was able to garner significant volumes in the first 2 months of 2017. As of now, it has overtaken Ciaz numbers by a thin margin and regained the No.1 position in the segment. Between Jan’17-Feb’17, City has sold 12,640 units v/s 12,416 units of Ciaz.

With City 2017 launch Honda announced features which were again unheard in the segment. It became the only car in the segment to offer LED headlamps, Sunroof, etc. Also the stellar safety package of 6 airbags and larger alloy wheels helped it differentiate itself. The USP of the brand still lies with the i-Vtec Petrol engine. And the pricing announced for the Petrol Variants was nothing less than mouth-watering. However, the Diesel variants are priced steeply when compared to Ciaz counterpart. Lets see how the New City fares in Pricing –

The Price Difference was also highlighted by Honda’s Top Executive, Mr. Ueno in a press conference last month – “That company (Maruti) has gained from using regulations to its advantage. The petrol City sells several times more than Ciaz petrol version, while that company is selling more diesel models because of the subsidies, Excise duty benefits as well as the incentives arising from the FAME scheme, while we get none of them. So they can play the price game as well.”

We did a comparison of the Variant-wise sales of these 2 models and the findings is as shown –

Maruti Ciaz Sales for Jan’17 & Feb’17:

Honda City Sales for Jan’17 & Feb’17:

It is clearly seen that Diesel variants contribute to over 64% of Ciaz sales! And in absolute numbers, it sells over 2.5 times that of City Diesel. Similarly, City is the clear winner in Petrol – its sales is almost double that of Ciaz Petrol. While the market is shifting towards Petrol, we see that City will slowly maintain its hold in the segment and sustain the leadership position. It would also be interesting to see on how Maruti will fare its Ciaz with Nexa and what updates could be seen in the upcoming Ciaz facelift as well. In short, it is going to be an interesting contest ahead!