Many Automobile OEMs started their journey in the Indian Market in late 90s but only few are able to crack the market Maruti would have done. One such way of understanding is how many years these OEMs took to sell 1L units in a single financial year. Below is the Y-o-Y sales figures of few OEMs:
6 out of the above 7 OEMS started their Automobile journeys in late 90s
Hyundai, Tata & Renault being the fastest to reach 1L units milestone in a single FY since its entry in the Indian automobile market
Renault was able to reach this milestone after the launch of Kwid in 2015
Honda is the slowest amongst these as it took 15 years to reach 1L units in a single FY and this was possible with the launch of Amaze in 2013
Ford is yet to reach this milestone in spite of entering the Indian market 21 years ago – as a result we saw the merger of Ford with Mahindra in mid-2019
Above data clearly indicates that those companies that understood the Indian customers’ requirement/tastes/buying pattern and brought in new products at right price have been able to gain higher volumes
PS: Maruti’s initial data was not available (1984-1998) and hence has been excluded from the aforementioned comparison.
Know Everything About an Own Damage Bike Insurance Cover to Safeguard Your Finances Effectively!
In 2018, the Insurance Regulatory Development Authority of India (IRDAI) allowed insurance providers in India to make three types of insurance policies available to two-wheeler owners in India.
These are –
Long-term third-party insurance cover.
Long-term comprehensive cover.
To add to this, IRDAI in September 2019 has allowed insurance providers to introduce an annual own damage policy for two and four-wheeler vehicles in the country. This policy is offered at the discretion of insurance providers.
What is Own Damage Bike Insurance?
Own damage insurance for bike is a standalone bike insurance policy that provides financial protection against damages and losses to your own bike.
Some of the instances covered under this insurance policy include damages due to accidents, theft, natural calamities, fire, etc.
This policy can be availed only by someone who has an existing third-party liability cover in place.
Thus, by availing own damage cover alongside your third-party liability cover, you can make sure your financial losses are minimal in the face of unfavourable circumstances.
How Does it Work?
Unlike third-party liability cover or comprehensive insurance cover, own damage cover solely protects the insured bike against damages and losses.
Previously, own damage cover could be purchased only as a part of comprehensive bike insurance policies. But, as per new rules, you have the flexibility to purchase OD cover separately from the other two standalone covers.
It works like any other insurance cover, where the policyholder has to pay a fixed premium amount to avail financial protection for their bikes.
This policy can also be further modified with add-on covers like –
A zero-depreciation cover.
Roadside breakdown assistance.
Return to invoice cover.
Tyre protection cover.
Engine and gearbox protection cover, etc.
Why was this Cover Implemented by the IRDA?
This cover was implemented separately by the IRDA because it allows you to avail protection against the damages to your own bike even if you already have an existing third-party liability cover in place.
You can understand the usefulness of the policy better with an example!
Let us assume that you have purchased a bike and an accompanying third-party liability cover, which insures your bike for the next three years. Sometime later, you realise that the liability only cover is not sufficient to provide you with 100% protection against liabilities involving your two-wheeler because it doesn’t protect your own vehicle.
Under this circumstance, the own damage cover can help to protect your bike against all types of damages incurred.
Can You Buy the Cover? Look at the Eligibility Criteria!
You can purchase the own damage cover if you comply with the following criteria –
If you have purchased your bike after 1st September 2018.
If you have a pre-existing long-term third-party bike insurance cover.
After ascertaining that you comply with these factors, you can avail the Own Damage bike cover.
Advantages Available Under the OD Cover
The advantages from the OD cover can be illustrated in the table below –
The policy provides financial protection to your bike against damages due to accident, collision, etc.
Provides financial coverage if your bike is stolen.
Financially protects your bike against damages from a fire outbreak.
Calamities like flood, storm, lightning, etc. can cause extensive damage to your bike. This insurance policy covers the damages incurred due to these.
Since this cover can be availed with an existing third-party liability cover, it provides all-round protection for your bike, thus securing your finances more effectively.
How is the Premium Payment For this OD Cover Determined?
With third-party liability covers, the IRDA publishes fixed rates for the cover annually. These rates depend on the insured bike’s engine capacity, with no variable component.
But with the OD cover, the premium calculation is a tad bit more complicated. The quote offered by insurance companies depend on factors like –
Bike’s cc (engine capacity).
Vehicle’s Insured Declared Value.
Vehicle’s area of registration.
Bike’s make and model.
Age of the bike.
Insurance providers offer the OD cover with these factors and the premium from the third-party liability cover in consideration.
Things to Remember About the Policy
Insurance providers cannot offer long-term standalone OD covers. You can choose to renew your standalone cover annually.
Insurance providers can offer you the OD cover only if you have an existing third-party liability cover.
The prices for standalone OD cover are the same as the add-on OD component of a standard two-wheeler insurance cover.
The OD cover should contain details like your existing third-party cover’s start and end date, policy number, etc.
So, without delay, get the OD cover and secure yourself against losses today!
You may be wondering whether the year & car is mentioned wrongly in the title – No, it is absolutely right! While; all major publications/channels are announcing the Car of the Year 2019; we would like to have the privilege to share our Car of the Year 2018 for a very simple reason that – We have substantial data to compare the sales volumes of the cars launched in 2018. And the detailed Report Card for the Cars Launched in 2018 is as shown –
“Sales performer, amongst the cars launched in the year 2018 goes to…. Maruti Ertiga!”
Since in 2019 the market de-grew, we have taken industry de-growth figure as yardstick for assessment. For apple to apple comparison monthly average figure is considered.
It is among the 10 best-selling cars in the world, but performance in India, is quite underwhelming.
In India, diesel engine is always considered as a vital ingredient for successful big SUV recipe. Honda-India, finally got that ingredient in 2018, for 4th generation (India) CRV. But vital ingredient – drivetrains, are flawed in CRV’s case. CVT transmission spoils the performance of petrol engine (154 PS output) and diesel engine is out rightly underpowered (mere 120 PS output – Hyundai Creta has 128 PS Diesel Automatic engine at 15.22 Lakhs ex-showroom Delhi).
Irony, first two generations performed better than the current generation, even without diesel power plant, that too in a market which was far too less mature for premium petrol powered SUV.
And the high asking price has not gone well with Indian buyers at all, huge cash discount of 5 lakhs INR (announced on website!), just corroborate this.
Maruti has basically used enriched ingredients for 2nd generation Ertiga – bigger, more powerful and fuel efficient engines (1.5L Petrol & 1.5L Diesel), more space for 3rd row of seat, distinct styling (different from siblings – Swift & Dzire), and then served at right price. And of course, a well thought out derivative in the form of XL6, which added incremental numbers in 2019.
Though it is an apple to orange comparison, but Ertiga has had garnered, much-much better sales volume, than Toyota Innova, that too in a challenging year.
It is performing better in 2019, in otherwise challenging market, where segment leader Maruti Dzire suffered severe volume loss on account of automobile industry recession.
Yet, Honda Amaze is far too distant from segment leader Maruti Dzire. Statistics shows, that Amaze has actually eaten into the market share of the weakest players.
What actually helped the cause, is, American Honda Accord inspired design. Certainly, Indian buyers love American or European design language.
Alturas is basically Mahindra’s owned Ssangyong brand’s SUV Rexton, with Mahindra badge.
For an SUV – it is big, looks brute, has an inviting interior with all bells and whistles along with a powerful engine, and undercuts competitor’s price as well.
Still it is stuck, at one third mark of facelifted Ford Endeavour. Only reason that comes to mind is – Mahindra Badge Value or in other words – Brand image (how consumer perceive the brand, for example – Toyota Fortuner redeems the price premium it charges with good resale value, even without sunroof).
However, Alturas has eaten into mighty Toyota Fortuner’s market share. So, can Alturas build that brand image in long term for Mahindra, with all those good product attributes mentioned earlier, only time will tell or has Mahindra missed the opportunity to create a sub-brand (high stake) for premium category products?
With every passing generation, Swift is becoming a much stronger brand in itself.
As per Global NCAP ratings, current generation of Indian Swift (with 2 front airbags) is safer than the previous generation (test car with – 0 airbag). 2 star out of possible 5, is still disappointing for such a popular car, which by no means can be considered as cheap in India. And for those 2 stars, special thanks goes to, Ministry of Road Transport & Highways – India, forcing every passenger car maker to provide front airbag and ABS as mandatory safety equipment.
Legendry Santro, the product which build a company in India, transformed the PV industry, from sellers’ market to buyers’ market, sadly, is no more a legend in present avatar. Santro is struggling, to even keep up with the traditional rival – Wagon R’s second fiddle, Celerio.
Looking at i20, Creta and Venue, Hyundai could have done a much better job on Santro, it is Hyundai’s missed opportunity in design department to style Santro, in today’s much loved SUV frock. And yes, Maruti still has its trump card – fuel efficient, refined petrol engine which are nice to drive – that’s a technological competence.
Mahindra identified a sweet spot in MUV segment, both in terms of price and size, and that is – positioning in between Maruti Ertiga and Toyota Innova.
But by then, Maruti has changed the rule of game, with the new generation Ertiga. Ertiga offers similar in-cabin space, better 3rd row seating, slightly more boot space, similar equipment level, has much better fuel efficiency at the cost of power, and cost almost 3.5 lakhs INR less (diesel top-end). Now Marazzo is stuck in a spot, which doesn’t seems sweet anymore.
What is though commendable, is 4 star safety rating of Marazzo, where Maruti Ertiga scored just 3. But then, unfortunately, for large number of Indian buyers, safety is not top priority, for example – 2 star rated Maruti Swift still sells in large volume. Which makes the role of Government even more crucial to regulate the industry, not only for safety but also for emission standards.
An SUV, that doesn’t have much of visual appeal on 16” alloy wheel, having dated 6.1” touchscreen infotainment system, with a 10.2 kmpl claimed efficiency for a petrol engine coupled with CVT transmission, ‘outlandishly’ priced at 31.95 lakhs ex-showroom, is certainly a recipe for disaster, and guess what, it turned out to be a disaster. With cars like Pajero and Lancer, Mitsubishi brand still has cult following, but company is unfortunately not listening.
Mother of all flops! Brought to you by Toyota, maker of mighty Fortuner and Innova. Car was certainly overpriced, seems slightly dated in company of Honda City, Hyundai Verna, and Maruti Ciaz, and that killed its chance, immediately on arrival.
Even Maruti, had a better run in the past.
Well in past Maruti also had a lot of struggle (read : Baleno & SX4) to make a mark in the segment ruled by Honda City for years. But then Maruti finally got the ingredient and recipe right with Ciaz, in otherwise dying segment. So, when recipe and ingredients are so well known in the market, how Toyota could go so wrong?
Prolonged recession in passenger vehicle industry, started in later half of 2018 due to several headwinds, like, fuel price hike, interest rate hike, insurance price hike, election results uncertainty, has now turned for the worse, due to financial sector crisis and overall demand-consumption slowdown.
2019 by far, has been worst year for PV industry.
Compare to Q1 & Q2, Q3 usually remains a lean season owing to monsoon. But due to financial and lending sector crisis, Q3 2019 has been in terrible shape.
All the progress made by the industry since 2014 has been completely reversed, for now.
Every other manufacturer is suffering due to downturn, including luxury car makers. Some have to undergo little less pain, due to new product launches lined up for launch in 2019.
MUV : has shown some growth in otherwise struggling market condition
SUV : off- late it is also struggling
Hatchback : worse than industry
Sedan : unarguably in worse situation
MUV Segment is still growing
Volume change over 2018
Bigger, next-gen Eritga, with more powerful engine, has a very strong value proposition
What is also helping Ertiga and XL6, is clever price positioning in sedan’s territory
Is BS6 anxiety leading to slow down?
BS6 emission norms will come into effect from 1st April 2020, post that manufacturers cannot produce or sell BS4 compliant cars in India.
This also led to anxiety among the potential buyers, as what will happen if they buy BS4 cars now, and, Government or Judicial body, through another regulation may ban the usage in, say, next 10 or 15 years. This might have led them to defer their purchase decision.
Though some also consider this as a major factor of slowdown.
However, reality looks little different though. New entrant – MG, still has BS4 cars on sale in India as per media report.
Despite having BS4 engine, every month, MG is able to sell more Hectors. It is largely due to very aggressive pricing, making it a great value for money offering. So new entrant instead of expanding the segment size, has eaten into competitor’s pie.
Moreover, post BS6 implementation, every manufacturer will raise the price due to additional hardware, software and development cost of BS6 engine. Due to price elasticity of demand, it will adversely impact the growth, further.
Indian economy is largely struggling with overall consumption-demand slowdown. This is clearly reflecting in quarterly GDP growth rate, which has nosedived since Q2 2018. Below illustration shows how PV growth rate follows the cues from GDP growth rate.
Amidst a slowdown in economy, consumers are spending on need-based purchase and are mostly holding back on discretionary spending. New car purchase (depreciating-asset) being a discretionary spend, is suffering too. In challenging economy, need-based car buyers may also head to used-car market, for right bargain.
Given the current state of manufacturing sector, Q3 GDP growth data will not be that good either. Recent Corporate tax rate cut may help companies to grow their bottom-line (profit) but may not help much with top-line (revenue).
Excess profitability may not restart investment cycle because there is less demand. Fiscal stimulus on supply side may not revitalize demand cycle.
What is more worrying, is India losing its status of fast growing major economy. Global factors and trade-war has impacted many other global economies, but Indian economy is facing worse, than one can imagine.
Data Source: https://tradingeconomics.com/ (04.09.2019)
India growth story was, and has always been about the growing middle class and the consumption. To put it in right perspective, it is always about reaching to China’s per capita income level, as India and China have similar population size.
H1 FY20 (Apr’19-Sep’19) v/s H1 FY19 (Apr’18-Sep’18) is considered in the aforementioned table for analysis
The Indian Auto Industry degrew by -23% and was led by the fall in sales of the market leader Maruti Suzuki. Maruti’s volumes fell by -27% in H1 FY20 v/s H1 FY19. Maruti also registered the highest Market Share drop! Maruti’s Market Share fell by -2.6%!
Maruti’s loss was Hyundai’s gain. Currently Hyundai is experiencing a all time high Market Share and a big share of the success is attributed to its biggest launch of the year ‘Venue’. Venue has sold 42,681 since launch and has contributed to 21% of Hyundai’s volume in past 5 months. Hyundai was able to reduce the degrowth and grew its market share by 2.6%.
Mahindra too took help of the new launch XUV300 to fight the adverse market situation and grew its Market Share by 1% in H1 FY20. It also established itself as a clear No.3 OEM by having a huge margin with the 4th ranked Toyota.
Toyota was able to place itself in the fourth spot clearly due to Glanza. Maruti sourced Glanza has sold 11,320 units in past 6 months and has contributed nearly to 18% of Toyota India’s volumes in H1 FY20.
Tata is now pushed to 5th rank in the OEM ranking table. Tata’s focus towards to retails and reducing dealer inventory has led to loss of volumes and Market Share. Tata has the second highest fall in Market Share (post Maruti) and almost 1.5% of its market share was eroded in H1Fy20.
Kia has made a strong entry and was able to gain market share of 1.1% with only 2 month volumes taken into consideration!