Future of Brand VW in India – Report

Volkswagen’s decade in India. Beyond?

From mid of 2017, VW Cars India is frequently in the news with stories of exits from key leadership positions, new appointments and of course the future plan. Why not, after all VW is a decade old now in India. India journey started with top down approach with premium cars landed first to build the brand’s foundation and later followed by volume products. Since they were quite late to the party, they splurge big on brand building (innovative ad campaign) and dealer management. Some dealers say that VW inventory credit period was longer and VW used to absorb higher % share in the discounts offered to customer, quite different from the then norms.

In 2010, they had ambitious plan to have 20% market share by 2018, later it was toned down to 8% in 2014. 10 years on, almost all premium products have gone off the shelf and VW is left with aging and struggling product portfolio and market share of mere 1.5% in India, unlike the leadership position VW hold in some of the biggest car market around the world, like – Germany (#1-21%), China (#1-17%), UK (#2-8%) and Brazil (#3-12%).

New plan, as reported, is having modest target to reach back to the 2011 level of 3% market share in next 5 years, and not eschewing leadership position. Assuming overall industry grows at healthy annual rate of 10% from here onwards, VW need to revive the existing products and fill the portfolio gap quickly to reach 13k monthly mark.

What makes the modest target seems more tough is the fact that the highest monthly sales VW could have ever achieved were in 2011 and 2012 when all the products were in glory days.

Of course history is not the future, market is growing and VW too will strive to grow, but 34% CAGR, from here onwards is challenging, especially when they are still contemplating either to have new MQB platform or older modified PQ 25 platform to underpin the future product pipeline. MQB-CKD (Completely Knocked Down) product assembly is not much cost effective in India and thus cut them short on pricing products competitively. Also lower level of localization means higher price of after sales spares which will effectively inflate customer’s cost of ownership, denting the long term value proposition.

Meanwhile, in order to promote Make in India initiative, Government of India in 2018-19 budget has raised custom duty (tariff barrier) on imported component, that essentially translate into higher price of vehicles which have higher imported content or CKD products.

Current Product Portfolio and Performance

Since 2010 VW took the baton from the Skoda to lead the volume segment and had a very good start and market share. It even developed India focused product like 4m sedan, though it is not working well. VW is slow to react when it comes to management of product life cycle (mid-life refresh and upgrades) and delay in bringing new generation Polo and Vento has resulted in loss of market share. Below table shows how VW is doing not so good despite having presence in fast growing segments.

Pricing of CKD products assembled in India, like Tiguan, is not going to help it to gain much of the volume. From current 100 monthly average figures it can go up to 200 monthly mark. Moreover conservative styling will make it to be called niche.  Being niche in under ₹ 35 Lakh segment makes existence quite vulnerable, as what we have seen in the case of Skoda Yeti. Jetta and Passat segment have become niche now, with SUV onslaught, in future segment could taper down further.

In short, future growth of VW is hinged upon the success of next generation launch of Ameo, Polo and Vento, and introduction of new products in other segments.

2018 and Beyond



Smallest VW hatchback on sale around the world is ‘up!’. Going by the dimension of the car on sale in the UK, it is similar to the size of Wagon R, slightly wider though. Feasibility study need to be undertaken if it can make a mark in slowly de-growing segment, as there is high chance of VW not being able to get the pricing right owing to their Indian cost structure.


If ever VW plans to develop new global hatchback for small-car market, they need to keep Maruti Swift in mind and try to accommodate Indian market need as well.


Polo is smart looking car, but its aging, and perhaps not in a good way. Brazil already got the new Polo, but India launch is nowhere in sight. On top of that VW has downsized naturally aspirated petrol 1.2L engine, may be in order to gain higher mileage or meet the tightening emission regulation. Well sooner or later buyers will realize the downside of low torque figure and its effect on city drivability and highway overtaking. That may not go well, when competitors are easily able to deliver better mileage, power and torque from larger 1.2L engine. Newer generation Polo with 1L naturally aspirated petrol engine might struggle to make headway in a segment which will soon get crowded with upcoming and highly promising products from Tata and Kia.


Large sedans are ceding ground to SUV. Only hot segment is sub 4m, which is growing rapidly. But segment is dominated by Maruti Dzire which is becoming stronger with every outgoing generation. But Maruti doesn’t seem to be complacent; rather they are bringing newer generation much faster than competition and always raising the bar.

Sub 4m

Ameo looks awkward from side profile. Numbers are slowly tapering, hopefully new and better Ameo could be on offer in next 3-4 years. Challenging Dzire with puny 1L engine will make task tougher.


Vento is competitive but is missing big time on timely upgrades. In fact it is doing much better with Skoda’s logo, as Rapid. Newer generation will help to gain market share, still Honda City may continue to have better pricing power in the segment and Ciaz the most value for money. Upcoming Toyota Yaris will make life tougher for all players as segment is not expanding due to rise in similarly priced compact SUV segment.


Jetta always has to be second fiddle around cousin Octavia. In has seen two discontinued generation and little success when it comes to numbers.  VW sedans are smart looking, like man in tuxedo, on downside all products look quite similar and sometimes difficult to differentiate. But Skoda’s crystalline design is very striking and exude more premiumness thus has an upper edge when it comes to premium quotient.


Passat simply enhances the Skoda Superb value for money appeal. In company of large SUV products, it is just a quest for survival.


In recently ended car themed entertainment show – The Grand Tour (Season-2, Episode-10) on Amazon Prime, host Jeremy Clarkson has made a very good analogy about SUV “If you are in a hatchback or a saloon, you see an SUV much larger coming towards you. You think, if we have an accident, I am going to come of worse. So I better have one too! They are like nuclear weapon, once one person got one, everyone wants to have one”. Just like safety arms race. Additionally, people have innate desire to own a car which just has to be bigger than their neighbor’s. That is why, size is definitive parameter for product segmentation followed closely by price range.

Apart from functionality, there is uncanny obsession for owning something which offers commanding position from inside the vehicle and posturing intimidating image outside. That brings the willingness to pay higher price. For example consider Maruti Baleno (Hatchback) and Brezza (C-SUV), both have similar footprint, however, Baleno offers more in-cabin and boot space. Still buyers are willing to dish out additional Lakh ₹, just to satisfy their emotional need with an (pseudo) SUV. Because on functional side, buyers get mere 15 extra BHP, for a Lakh ₹!

Under 4m

Stop gap 4m SUV recipe is very simple, take a 4m hatchback, increase ground clearance and tweak the silhouette to look like an SUV, just like Honda WRV. Or take a longer route (time & investment) to completely change the body shell along with the mechanicals. With the current GST structure, and growing obsession for compact SUV, 4m length vehicles are here to stay. So best way is to have a completely new product just like Ameo. Leveraging modified version of Skoda’a Vision X concept build on MQB A0 platform may be more cost effective solution in long term for India.


As reported, VW is planning to introduce Hyundai Creta rival. From VW’s global portfolio, T Roc seems to fit the bill in terms of size. However, in the UK it is priced very closer to Hyundai Tucson, which will make the product unviable in India. So underpinning has to be different, though retaining the outer shell. VW need to be very cautious with the pricing, the moment it crosses ₹ 15 Lakhs mark, it will get into the territory of Jeep Compass and price inelasticity will hammer down the volume. Reason is VW overall doesn’t have strong pricing power in India as enjoyed by Honda, Toyota and Skoda in some of the premium segment. VW need to acknowledge the ground reality of India, in regard to its brand image and pricing power. Brand image of Skoda was created by Octavia and Superb, which are well regarded as premium vehicle in India. But VW brand image was created by more common in sight, Polo and Vento, thus in India, Skoda has an edge when it comes to premium image and pricing power. Brand image is something which is engraved in psyche of onlookers and customer alike, and enhancing it after certain point in time, on company’s own will, is more challenging, but going downhill is pretty easy.


Pricing of Tiguan has put it on the spot. Its conservative styling and size will appeal to the sensible buyers, implying those who don’t want to flaunt their SUV. That pushes it into niche segment. Size wise it is in territory of Compass and Tucson. See how aggressively priced Compass is doing well.

But pricing lands it into big boy’s territory which are far more appealing, though may not be sensible as third row of seats is seldom used. Lack of sheer size and pricing power is reflecting in the numbers which is quite low in comparison. Look at Skoda Kodiaq which easily got away with such steep pricing. That’s what brand image is all about.

Availability of CKD import may improve numbers but not too much, similar to overpriced Hyundai Tucson. Just like Americans, Indians too love their SUV to be big, if not, then at least have strong road presence. For example, in ₹ 25 Lakhs+ price range, Toyota Fortuner really commands Lion’s share across Sedan-SUV segment.

4.5m-4.7m & 4.7m-5m

Only product in VW’s global portfolio that fits into the segment is Touareg (4.8m). VW tried its luck twice with CBU (Completely Built Up) import Touareg but with no success to show. Some international reviews say that it is as good as an Audi SUV. But question is, wouldn’t potential buyer opt for Audi Q7 for few Lakhs ₹ more, instead of a vehicle which comes with VW logo on front radiator grill, which is same as on ₹ 6 Lakhs Polo. Perhaps Brand Conscious buyers would prefer Audi.

Having said that, Toyota is still able to sell twice as expensive Landcruiser 200 with quite an ease. Landcruiser brand is built on strong past credential and heritage which VW SUV doesn’t have. That’s the game of brand in India.

Safety as an USP (Unique Selling Proposition)

In one of the test drive session, sales representative from VW dealer claimed, that when it comes to safety, VW is Volvo of mass market segment, implying highest safety standard. However, competitors can easily match the standard. For example in the year 2014 & 2015, Global NCAP has had crash tested Indian made cars and awarded 4 star safety rating (out of highest possible-5) to both VW Polo and Toyota Etios for adult occupant protection(frontal passenger). So safety as an USP will not hold for long. In fact, Ford is providing 6 airbags on some of its vehicle priced under ₹ 10 Lakhs.

On a side note, Volvo is well known for its safety obsession, remember when they invented three-point seat belt and let it go off-patent, so that vehicle manufacturers across the globe could adopt it and make vehicle occupants across the globe to travel safely. That is incredible way of saying that we care for your life.

Sales & After Sales

Right product at right price is three quarter way through the game, rest all depends on sales and after sales experience. Look across several consumer and automobile forums and one can observe that there are issues with availability of spares, pricing, and quality of service rendered at service station. Keeping channel partner happy is good thing but aim should always be to keep customer happy, the real provider of green bill. Word of mouth has pretty strong influence in buying decision process, so even one unhappy customer, will lead to future loss of other potential customer(s).

Would VW exit India just like GM?

A year before winding up sales operation in India, GM too has shown commitment of Billion $. But then GM has exited from Europe too. After 2007 American financial crisis, GM has lost the #1 global ranking and settled down for #5 ranking by 2016. Some automakers say that India is a tough market, well, every country-market is unique in itself, a tough nut to crack and India is no different. For example Suzuki’s Indian Subsidiary Maruti is super successful, however, their American subsidiary had gone bankrupt in 2012 and eventually they pulled out from the US market. So it all boils down to business jargons like – priority, focus, ambition, capability, resource deployment, competency development etc..

VW India case is little different from GM. Two decades of unsuccessful operation has left GM with lot of accumulated losses on its books in India, for the period of 2014-2016, GM had a negative operating margin and cash flow but VW has had positive operating margin and cash flow over that period, even better than Honda and Toyota in some years. Moreover, for VW Group as a whole in India, has Audi as cash cow and Porsche, Lamborghini and Bentley are icing on cake, so literally VW Cars India has luxury to sustain in India. So they may leave, only, if they wish to. However, VW as a group need to be cautious while pushing Skoda to be volume generator in India because brand dilution is inevitable if Skoda goes whole hog to cater lower end of hatchback segment, in order to gain volume. It is surprising as to why Skoda is chosen at this point of time to gain volume, given the current positioning and reach (VW has almost twice as many touch points) of VW and Skoda in Indian market.

VW could wish to take a lead in electric mobility within the group and plan to bring products initially as halo one, more as a brand building exercise. May be later followed by mainstream products, as and when market matures and become ready to adapt to electric vehicle (perhaps after 5 years from now or even longer) in larger scheme of things.

Possible Future Product-Mix

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

Best Mileage Cars of India – 2018

ARAI mileage of UV & Sedan

To present the data we tried a different approach. We took length as proxy for in-cabin space and stacked the models length-wise, distinct product segments became quite apparent in most of the cases. So we deduced a fuel (transmission) – length (band) matrix to present the data. If this assumption (length  in-cabin space) doesn’t hold true for any product then perhaps designers and engineers need to do a better job, think of the term clever engineering.

Utility Vehicles

Inherently, heavy Body-on-Frame-Ladder-Chassis have lower mileage as oppose to monocoque construction.


Fuel preference

As per 2017 data, small cars are predominantly petrol and as body size increases, buyers opt for diesel engine. Looking at petrol mileage of UV, no wonder most of the buyers want to keep their UVs on strict diesel diet.

All Hatchbacks

All Sedan

All Utility Vehicles

All Vehicles

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

ARAI Mileage Figures – Hatchback Segment

We have compiled a list of mileage figures of hatchback on sale in India. These figures are published on internet portals as provided by the vehicle research agency – Automotive Research Association of India (ARAI).  These values are outcome of mileage test conducted on a chassis dynamometer under standard condition and not on  real road. Real world test figures might vary based on driving condition and style, however, as all the vehicles are tested under similar condition, figures are good enough for sake of comparison.

In essence, companies which have got the Hindi colloquial phrase “Kitna deti hai?” (What’s the mileage?) right, have won half the game of pursuing consumer’s mind to buy their product, especially in budget conscious hatchback segment.

  • AMT technology has not only made owning automatic more affordable but are equally fuel efficient
  • Some cars having CVT or DSG transmission technology are more fuel efficient than their manual counterpart
  • High compression ratio makes diesel engine more fuel efficient, but car comes at a price premium
  • CNG is best bet to save money if one is living in a city which has good network of CNG filling station

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

Wonder Women in Indian Motorsports!

It is quite an honour to publish this post. Indian girls have really broken the shackles to turnaround the  stereotype approach of the society. Girls like Mira Erda,Sneha Sharma, Neharika Yadav and Alisha  have broken many records and have proved a benchmark for current generation. Lets have a look at some of the next gen power girls.

Mira Erda

Mira Erda was born and brought up in Gujarat. She started Karting at the age of 8 on a track build by her father. She became an active racer at the tender age of 9 and was the youngest girl in the Indian Motorsport circuit at the national level. She was competing in the LBG formula 4 till last year. She even defeated stronger and bigger boys by winning the rookie champion of the year during the FMSCI awards.

Mira has already participated in about 75 races both at the national and interntional level. She is going to race for JK Euro which features the BMWFB02 thus becoming one of the youngest Indian drivers to race at this level. But her journey was not that easy. The trainer during her karting days was not at all supportive. It was all due to the efforts and the investment of her dad which encouraged her to choose motosports as a career.

Dr.Neharika Yadav

In a sport dominated by men Dr Neharika is the only super bike racer in the country. She balances her twin pursuits of dentistry and being the fastest women on bike. Her journey from books to track was very challenging.She had an accident while pursuing dentistry and and she lost movement on her right hand. She had to consult various experts for rectifying her right hand. Finally a surgery from USA ensured 50 percent movement of the arm.

After her surgery she was determined to follow both her profession and her passion. Years of determined practice and the guidance of senior and pro fellow riders nurtured the bike racer in her. Dr Neharika started her biking journey with Honda CBR 250 and then shifted to KTM 390RC. Finally she got the taste of Ducati 899 Penigale. She has already completed 2000 kilometres of superbiking at the Buddh International circuit. She truly deserved the destiny- Fastest Superbiker Lady in the Country!

Sneha Sharma

Fueled by her passion Sneha Sharma knew exactly what career she wanted to pursue even when she was 16 years old. Today this girl is not only the fastest racer in the country but also a pilot with Indigo airlines.

Sneha Sharma’s  mother took her to a local track in Mumbai when she was 16 years old. In 2010 she graduated to cars from karts and has also competed in the JK tyre national racing championship. She secured second position in her 4 stroke category at the JK tyre national karting championship 2009. Sneha Sharma was also shortlisted for the 2015 Volkswagen  Vento Cup and the Toyota Etios Cup in India. Sneha Sharma also competed in Mercedes Young Star Program and secured top 5 position. She eventually got the title of India’s fastest female racer. Her journey in the racing arena has been a hard struggle. Being a girl and belonging not to so rich background she did not get sponsorship fees and qualified instructors. She learnt basics of braking and cornering from the simple mechanics.

She has to work at various positions on the race track to sustain herself  in the racing competition. Being a commercial pilot at Indigo Airlines she had to giggle between her profession and her passion. The racing is scheduled in such a way that sometimes there are six races in a month. So she has to plan well in advance to pursue her passion. She was also offered racing seats in Germany and Malaysia. Overall she has won 6 race victims and 14 runner up positions.

 Alisha Abdullah

Alisha Abdullah has got the unique distinction  of being the only Indian women super bike racer and the fastest Indian woman car racer and fastest Indian woman car racer. She has also acted in a Tamil movie Irumbu Kuthirai!

Alisha has been fascinated by racing since she was a kid. At the age of 13 she won MRF national go karting championship. Alisha has got huge distinction of becoming the first Indian woman to get a podium finish in an International Motosport Competition,the Toyota Vios Cup  in 2014. Alisha switched from four wheels to two wheels in 2004.

Competing at the various car racing events was becoming an expensive affair for the Alisha’s family and so she shifted towards motorbike racing. Alisha Abdullah has started her own Racing Academy at the outskirts of Chennai.She wants more and more women to represent India on the global platforms in the years to come.

source: wikipedia, huffington post india

(This article is written by  Gourav Saksham, a dentist by profession and a Petrohead by passion. You can connect with him at gouravsaksham@gmail.com)

OEM wise – Market Coverage and Competitiveness (2012 vs 2017)

In coming years it seems that Maruti might be able to have a product portfolio to cater to every Indian customer’s need (in mass market). Right now, with exception of ₹ 12 Lakhs+ segment, Maruti has covered all the bases in mass market segment, to be precise – 89%. Maruti has even started premium showroom concept called NEXA, to be future ready for premium products. ₹ 12 Lakhs+ products would be real test for NEXA showrooms; Ciaz anyways was doing well from regular Maruti showroom. In last 5 years Hyundai and Honda expanded their market coverage by bringing in products to cater newly emerged and fast growing segments (like compact SUV, sedan).


For apple to apple comparison of competitiveness, let us have a look at the market share of the only segments where the automaker has a presence. For example Mahindra KUV 100 caters to only one of the possible 4 segments of hatchback.

  • It is surprising to see how Mahindra is the one who has lost its competitive edge big time in past 5 years. Scorpio (2002) and XUV 500 (2011) were game changing products but post that nothing is working for them. When other players started newer segment, Mahindra (TUV300 & KUV 100) failed to make a mark. Upcoming products (MUV-Innova rival, 4m monocoque SUV/Crossover-Brezza rival, 4.3m monocoque SUV/Crossover-Creta rival, Ssangyong Rexton) seems promising but competition is really fierce and Mahindra needs to be really good, to be in the game.
  • Due to lackluster legacy products of 2009 and before, Tata has ceded lot of ground during past 5 years. Horizonext strategy (2013) is finally working for Tata now. Future product line seems promising. If they could turnaround Safari Storme just like Aria (to Hexa), they could beat Mahindra in its own game. Remember how Mahindra was caught off guard when Tata won the Government’s electric vehicle contract, fair and square.
  • In last 5 years, Maruti has tightened its competitive grip in each and every segment it has its presence in and it started reflecting in competitor’s number, particularly Hyundai. However, given the Hyundai’s track record, upcoming 4m SUV/Crossover looks very promising and might help in big way to assert its dominance.
  • India focused product development approach (Kwid) has improved the standing of Renault. However, to continue the momentum they need to stay focused. Product planning and positioning debacle, like Captur, has just derailed that momentum.
  • Nothing was working for Nissan then, nor now. Perhaps they need to quickly bring in new Micra body styling, even if they choose older underpinning, as what Renault did for Captur. Given company’s global position it could have done better in India. They may end up like Chevrolet, only, if they wish to.
  • Honda is finally shedding Brio platform which is good for their future. Amaze’s new design language borrowed from City might work well.
  • With exception of Etios and Liva, Toyota has been very competitive in Indian Market, upcoming Yaris will certainly correct their past mistake.
  • VW’s recent move to downsize the naturally aspirated petrol engine in fastest growing premium hatchback segment looks regressive competitive strategy. On paper performance figure is underwhelming. Potential buyers getting their numbers feed from internet, typically rely on paper figures. So, such a move in a segment which is predominantly petrol powered (75%+) is confounding. Japanese and Koreans are much better at making naturally aspirated petrol engine, at least on papers (power+torque+mileage), but on road performance and sales figure (observation : Mileage is directly proportional to sales figure) too corroborate this. If recently reported Skoda’s big Indian plan is pivoted on such engine (strategy) then perhaps in future Maruti, Hyundai and Tata have to wrestle among themselves in one of the fastest growing segment.

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

Is Maruti The Only Vehicle With Low Maintenance Cost?

Buying a car is just one part of the whole story. Owning and maintaining the car forms the second part. Manufacturers highlight features, space, and styling, but are generally silent on maintenance/service cost of their vehicles. In India, the automobile revolution started with the introduction of the Maruti brand in the early 1980s and it is generally believed that Maruti vehicles are cheap to maintain probably because the cars are being manufactured in India, even though in collaboration with the Japanese carmaker Suzuki.

The aim of this post is to compare the maintenance costs of cars of a few other brands with that of specific Maruti models and see if the belief that only Maruti cars are cheap to maintain is really true or a myth. This is because maintenance cost is an important aspect to be considered when buying a new car. The maintenance/service costs under normal running conditions are worked out for comparison purposes.

Let us now compare the maintenance costs of a few brands to understand this aspect a little better.

#1: Maruti vs Toyota

When it comes to the mid-range cars, the two models that can be compared are Maruti Ciaz and Toyota Platinum Etios. Whereas the price of the base model of Ciaz is INR 7.66 lakh, the base model of Toyota Platinum Etios comes to only INR 6.80 lakh. The mileage claimed by the manufacturers for these models are 28.1 kmpl and 23.6 kmpl, respectively. In terms of engine capacity, Maruti Ciaz is powered by a 1,248 cc engine, while Toyota Platinum Etios has a 1,364 cc engine.

When it comes to the maintenance cost, it runs up to INR 23,631 in the case of Maruti Ciaz petrol variant for six years and eight services. For the diesel variant, it is INR 30,377 for the same number of years and services. The regular maintenance cost for Toyota Platinum Etios is less. For six years and seven services, it works out to around INR 18,200 (INR 18,176 for Petrol and INR 18,196 for Diesel) for both petrol and diesel variants. So the diesel variant of Ciaz, the maintenance cost is almost double that of Toyota Platinum Etios.

Now, if you are wondering as to how Maruti Swift and Toyota Etios Liva fare, it is as follows. Both the cars share the almost same specification, price, and mileage. You have to spend about INR 21,103 and INR 28,312 on regular maintenance for eight services over six years for Maruti Swift petrol and diesel variants, respectively. In the case of the petrol and diesel variants of Toyota Etios Liva, it is INR 18,200 (INR 18,176 for Petrol and INR 18,196 for Diesel) for seven services over six years.

#2: Maruti vs Mahindra

Maruti’s Wagon R and Mahindra’s KUV100 are comparable models in terms of price range, mileage, and engine capacity.  The price of the base models of KUV100 and Wagon R is INR 4.51 lakh and INR 4.14 lakh, respectively. While the KUV100 is powered by a 1,198 cc engine, Wagon R’s engine capacity is just 998 cc. The fuel efficiency claimed by Maruti and Mahindra for these models is almost the same.

Now let’s talk about the maintenance cost of both the vehicles. The total estimated maintenance cost of Wagon R (Petrol Variant) for 6 years and 8 services under normal running conditions works out to INR 27,000 and for the CNG variant, it is INR 25,257 for six years and eight services. In the case of KUV100, the total estimated maintenance cost for six years and seven services it is just INR 18,580. Even for the diesel variant of KUV100, the maintenance cost comes to only about INR 19,570 for six years and seven services. So here Mahindra KUV100 won hands down.

The maintenance costs of even Maruti Celerio variants, which can be included in the same category as Wagon R, is also higher than KUV100. Another aspect that is worth mentioning at this point is about the availability of OEM spare parts. Both the customers of Mahindra and Maruti can get the OEM parts from their authorized service centers, but only Mahindra customers can enjoy an additional benefit of online OEM spare part purchase.

#3: Maruti vs Hyundai

Among Hyundai cars, the model that can be compared with Maruti models Celerio, Wagon R, and Swift is the Grand i10. The base model of Hyundai Grand i10 costs about INR 4.70 lakh and has an engine capacity of 1,197 cc. The fuel efficiency claimed by the manufacturer is 24 kmpl for the diesel variant.

When it comes to the cost of servicing Grand i10 petrol, petrol automatic, and diesel variants eight times over six years is INR 14,274, INR 14,522, and INR 20,599.00, respectively. Which means you can get your Hyundai Grand i10 serviced at a half price when compared with Maruti Wagon R.

#4: Maruti vs Tata

Finally, how does the Indian brand Tata Tiago fare against the Maruti models discussed above?. The base model of Tata Tiago fitted with 1,199 cc engine comes with a price tag of INR 3.26 lakh. The manufacturer claims a fuel efficiency of 27.3 kmpl for its diesel variant. Tiago is rich with engine spec, mileage and badged with competitive price while comparing with Maruti’s Wagon R and Swift. Now let’s check with the maintenance cost.

The cost of servicing Tata Tiago seven times over six years works out to INR 21,980 for the petrol variant and INR 23,860 for the diesel variant. It is obvious that the maintenance cost of Tata Tiago is lower compared to Maruti models. One can enjoy good spec and less maintenance cost vehicle with less price if opt Tata Tiago over Maruti equivalent model.

Another important factor needs to be considered is that the price and availability of OEM spare parts. The well-known place to get OEM spare part is the authorized service centers. The availability of parts will be higher if the number of service center is more. Maruti is not the only maker which covers a nationwide service center. Manufacturers like Hyundai, Mahindra and Tata are also delivering a nationwide service support to its customers with a great number of service centers. With the emergence of E commerce platforms now Mahindra customers can get OEM parts through their online platform as well.

It is now very clear from the above that Maruti brands are not the only ones which come with low maintenance cost as is being commonly believed even now. We have now so many Indian and foreign brands delivers less maintenance cost, some even give less service cost than Maruti models. In general, the maintenance cost of Maruti cars was low when the long-gone Maruti 800 model was in vogue. Over the years, a number of Indian and foreign brands have introduced entry, mid-range, and high-end cars. Now some of the models introduced by these brands can definitely be categorized as low maintenance cost cars as is evident from the above discussion.

Maruti v/s Others – The Myth stands broken!

(Elizabeth Mathew is an entrepreneur, digital journalist and a photographer. A life-long generalist, she writes for various blogs covering digital entertainment, social media and tech. She can be followed @raisamathew)

India is a small car market, indeed!

Cars having length of 4m or less has completely cemented their position in Indian passenger vehicle market, with close to 75% of cars sold in last three years are small (4m or less in length). Driver of the change is the tax structure introduced by the Government way back in 2006, to make India a manufacturing hub for small and fuel-efficient cars.

In reality, small vehicle doesn’t solve road congestion problem but an efficient public transport system may. On small cars, James May (earlier with Top Gear-BBC) once said “Length is not an issue, as roads are infinitely long but finitely wide, it is just easy to park.” If you look at the larger picture, cap on engine size (1.2L for Petrol & 1.5L for Diesel) ingrained in tax structure, has promoted vehicles which are emitting relatively less pollutant and consuming less fuel per unit.

Hatchbacks are not the real beneficiary of the tax structure out here. Rather it’s the sedan and SUV body shape which has shown remarkable growth. Reason – it is culmination of buyer’s aspiration to own a Sedan or an SUV, with limited budget and manufacturer’s ability to package the same in such small footprint and passing on the lower tax incidence as benefit to customer.

What made this happen?

Roots of sub 4m length car segment or small car can be traced back in 2006 Budget speech of the then Finance Minister Mr. P. Chidambaram. Government’s idea was “To make India a hub for the manufacture of small and fuel-efficient cars that will drive economic growth and employment.”

Tax is compulsory contribution. It is one of the major source of revenue for Government. At the same time Government can use tax system to alter the market forces of demand and supply, as in the case of small cars. Lower taxes will reduce price and spurt demand. Also it can be used as a tool for redistribution of wealth, for fostering economic equality, thus the idea of higher taxes on luxury items.


“On cars, I propose to reduce the excise duty to 16 per cent from 24 per cent, but only for small cars. A small car, for this purpose, will mean a car of length not exceeding 4,000 mm and with an engine capacity not exceeding 1,500 cc for diesel cars and not exceeding 1,200 cc for petrol cars. I am confident that industry will seize the opportunity to make India a hub for the manufacture of small and fuel-efficient cars.”- Budget speech – Mr. P. Chidambaram (Minister of Finance-Government of India)


“I have looked at specific sectors where growth is flagging. These sectors are important because they are growth and employment drivers. Some of them also have large externalities. Therefore, I propose to reduce the excise duty on small cars from 16 per cent to 12 per cent and on hybrid cars from 24 per cent to the general revised rate of 14 per cent.”- Budget speech – Mr. P. Chidambaram (Minister of Finance-Government of India)


With GST coming into effect from July 2017 and subsequent revision in September 2017, very idea of 2006 tax structure is cemented now, till another new policy framework comes into effect.

Fuel preference

As per 2017 data, small cars are predominantly petrol and as body size increases, buyers opt for diesel engine. Most of the buyers want to keep their SUVs on strict diesel diet, would 2020 BS VI emission norms be able to change that?

Body Type

Below table shows that over the years SUV growth rate actually outpaced the growth rate of other segments by leaps and bounds.

If you consider perfect 4m length, across all the body shape, with every new product launch, you will see that there is lot of jostling for top spot. With more number of 4m SUV lined up by manufacturers (Datsun, Hyundai and Mahindra), SUV will soon be undisputed leader.


Hatchback sold in India has always been less than 4m in length. Only exception was Chevrolet SRV launched in 2006, which was 4.3m long and found very few takers. Overall hatchback growth rate is pretty low in comparison to overall industry growth rate, thus decline in overall market share. So it is difficult to establish direct impact of tax structure in promoting hatchback which were inherently small in first place. Essentially government is incentivizing small cars over larger cars. In below table you can see that smaller hatchbacks are losing market share and buyers are migrating to larger hatchback. A clear sign of rising aspiration level backed by purchasing power.


Tata Indigo CS (2008) was the first sedan to take advantage of the tax structure for its diesel version. What Tata essentially did, was to chop-off the boot of Indigo, to make it fit into 4m length and passed on reduced tax incidence as benefit to customer. Major boost came in 2012, when Maruti Suzuki decided to latch smaller boot on Swift to make 4m-Dzire, and despite its odd proportions it was much bigger success than Swift. Now every leading car maker is having at least one product and some did really good work in designing a sedan with such small footprint and carving out generous interior and boot space.


First sub 4m SUV was launched by Premier Auto, called Rio, in 2009. It is the same company which used to manufacture one of the most popular sedan before 90s, called Padmini, but popularly known as Phiat (that’s how it sounds). Ford Ecosport has actually brought the segment into limelight and Maruti Suzuki Brezza later turbocharged the segment. Segment is poised to expand further with upcoming Hyundai 4m SUV.


Tax structure hasn’t had any significant impact on MUV segments. MUV are meant to carry large number of passengers or large amount of luggage or both together. Carving out usable 3 rows of seat in such small footprint is not that easy, unless they make it a boxy-van, which again is not very aspirational from buyer’s perspective.

Utility Vehicle (UV) Chassis

With the advent of new breed of urban, pseudo, compact UV, whatever name you prefer to call them by, monocoque construction is the most preferred chassis.

Company Wise

Maruti Suzuki is champion of small cars indeed. Pick up any segment under 4m, and you will find a Maruti Suzuki product standing at top of podium. On the other side of spectrum it is Toyota with its deeply entrenched and high margin products, namely Innova and Fortuner. For others it is just a pipe dream.

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)

2018 Auto Expo – India

The Indian Auto Expo is primarily a biennial automotive show (held once in 2 years) and is Asia’s largest and  world’s second-largest motor show! The Auto Expo was conceived in the year 1985 and had its debut showcasing in 1986.

Auto Expo had always been a platform for OEMs to showcase their upcoming product portfolio and create a buzz beforehand. Customers get a preview of the cars that a brand is going to launch in the coming time. Some cars which were showcased in the earlier Auto Shows have seen phenomenal success in the Indian market (For Ex: In 1998 Auto Expo the showcased products were – Tata Indica V1, Hyundai Santro, Ford Fiesta, Honda City, Tata Safari, Mercedes E-Class etc). Nowadays, OEMs are also using Auto Expo as a platform to launch New Models – this time Maruti launched the New Swift & Hyundai launched the New i20. The OEMs also showcase the Concept/Futuristic models to highlight on their technological superiority.

We have collated the list of cars which were either launched at the Expo, along with the Future Lineup, Concept & Electric Vehicles –

Key Highlights –

  • Kia had a grand stall and showcased the highest number of cars (12 Future Models + 3 Electric Concepts). It has given Kia a nation-wide visibility and has helped it gain the initial buzz it would want before launching new models. It also clarified that it’s first launch for the Indian market shall be a SUV and also ran a contest on naming the Concept.
  • BMW had the highest New Model Launch (5 nos) at the Expo! We also saw the longest line at BMW stall during public days (as they were offering free calendars 😉 ). BMW has been pretty aggressive with their participation and 5 New Launches at the Expo highlights the product offensive strategy by the German OEM.
  • Maruti & Hyundai realized the money spent at the Expo on launching the Newer Models of their legendary Swift & i20! They were the showstoppers at their respective stalls and had an instant connect with the audience attending the Expo.
  • Honda & Toyota neatly utilized the Expo in generating buzz for their upcoming launches (Amaze, Civic & CRV for Honda, Yaris for Toyota). The Japanese OEMs had a similar approach and the pre-launch unveil shall definitely help them create enough buzz before the launch.
  • Tata’s Concept Cars (H5X & 45X) were the most talked about concept cars at the Expo. It really gives assurance that the future lineup of Tata Cars will be a big step ahead in terms of design for the Indian major.

We have shortlisted 6 cars which we believe are going to be instrumental to their respective OEMs in terms of gaining significant ‘volumes’ in the Indian market and seemed to be most promising out of the lot in the expo –