2011 – A year of Launches

Year 2011 will be always be remembered as the most crucial year in Indian Automobile Industry. It experienced the launch of segment-defining products and changed the overall perspective of the industry. No one had shaken Honda’s dominance in C-segment till date. Suddenly Fortuner fears its dominant as the most sought after Premium-SUV position is at stake. Alto slowly seems to ‘let it go’ and out of the blue entry-level car segment isn’t all that “entry-level”; we have an offering that oozes a lot more style/premium-ness than its costlier competitors.

A brief line up of the launches in 2011

  1. Hyundai’s all new fluidic design philosophy was showcased by the launch of New Fluidic Verna. With the right pricing, attractive design and striking diesel variant, it overtook Honda’s indomitable City within months of its launch
  2. Mahindra’s target to become an aspirational brand was strengthened with a giant “Cheetah” leap – XUV 500. The XUV ‘five double ohh’ not only re-defined Mahindra’s engineering process but also welcomed to the league of PREMIUM car makers. This surely has provided M&M a strong foundation before the launch of its international brands in lieu with Ssangyong.
  3. We were all anticipating a worthy competitor to the King of entry-level hatchs. Hyundai’s codenamed HA was one of the most awaited launch of the year. The product was launched as EON. The fluidic design philosophy was carried over by Verna and the breakthrough pricing has made it all more luscious. 
  4. Ford after its success of Figo, wanted to replicate the same with its sedan offering – Kinetic Fiesta. The Fiesta had already tasted success internationally and the extrovert Kinetic design was a sure eye-turner. But the product couldn’t really make a dent in Indian Scenario due to over-the-box pricing and cramped interior space. 
  5. Maruti’s second generation Swift had a Blockbuster launch. The longer and roomier swift has garnered over a lakh bookings till date. But the labor unrest at the plan disturbed the deliveries and has left a majority of its customers waiting for it.   
  6. Renault launched two of its premium offering – Fluence and Koleos. While both the products couldn’t bring numbers to the auto maker; Renault surely wants to build its image as a Premium Car Manufacturer. 
  7. Nissan’s Micra and Sunny proved to be instant successes. Even with its petite dealer network it has amassed an average of more than 1000 numbers for Micra and Sunny. As its network expands, we can expect more numbers and newer product launches.
  8. VW wants the top OEM slot internationally by 2018. India as a market plays a very vital role for VW for turning its vision to reality. Hence it has been very aggressive in its strategies in the sub-continent. Be it dynamic network expansion, break-through marketing or slew of launches – VW is trying all means to gain the market/mind share. This year Vento allowed VW to establish itself as a serious competition in the lucrative C-segment. Even the new Passat marginally increased the numbers and stood a threat to its sister brand Superb.
  9. Skoda is leaving no stone unturned to churn numbers in Indian Market. It has learnt from its mistakes and have implemented its learnings this year – a price cut was seen in its hatch-offering ‘Fabia’. Also the Octavia-replacement ‘Rapid‘ is expected to be priced competitively. With its mini-limousine type space and the Skoda badge, we expect the Rapid to heat up the competition in the C-segment.
  10. The Firodia’s led company launched the Force-One. The premium SUV has the design cues from the Chinese Guangdong Foday and the Benz-engine had high hopes from the product. But again the value-conscious Indian market couldn’t see value in the offering and the mass-mover brand image of Force acted as hurdles in its way to establish Force One as a Premium SUV.     
  11. Toyota’s ambitious ‘Made for India’ products Etios and Liva was also made public this year. Toyota’s expansion plans in India is backed by these two products. Toyota has almost grown more than 50 percent this year. Although both the Etios & Liva are bringing numbers to the Japanese car maker; but in sight to get the prices down the quality has degraded as well.  
  12. Honda’s new hatch ‘Brio‘ has a lot of expectations riding on it. With a competitive price and cute looks it has already harvested more than 5000 bookings.  
There were also some very exciting launches in the Luxury Car space. My personal favorite was the Indian launch of Range Rover Evoque. I believe there would be no other car in the world that would be as similar as its prototype/concept model. 
We expect the trend of launches to continue in 2012. Around more than 50 launches are planned this year. The Snapshot is as mentioned below –
Indian Car Launches – 2012

Analysis of the Indian Automobile Debacle

Everyone is discussing the downward trend of the Indian Automobile market. While India is in the hotlist of all the top OEM’s of the world; the recent downfall in the sales chart has raised a lot of questions on the lucrativeness of the market. The volatile trend is not a good sign. Analysts believe that the trend is to continue for another 3-4 months without any signs of revival. This has made the investors wary and the manufacturers scared. This amidst the fears have forced the OEM’s to announce heavy discounts in November and I’m sure the same will continue for December.

The most attributed reasons for the downfall are:
          *Rise in Interest rates
          *Increase in fuel prices
          *And Labor Agitation in the biggest Automaker

The bad times even got worse with the last point mentioned in the above list. Maruti Suzuki is reeling to supply the vehicles according to demand and the labor issues in past 3 months have hit the production hard and has turned out to be the worst nightmare in MS’s history. This had a direct impact on the company’s sale and was even reflected in its Q2 results – the company saw a fall of almost 59.8% in its profit. MS used to be the mascot of the Robust Indian Auto Industry and its decline in profits raised many eyeballs. Even though with an exhaustive booking list for its new Swift (almost a lakh booking), the signs from MS aren’t too upbeat.
October 2011 Passenger Car Sales Figure – OEM wise
India’s two biggest Automobile manufacturers MS & Hyundai experienced a de-growth of more than 52% and 5% respectively. Although the reasons for the de-growth in MS was explicit; Hyundai’s downfall was worrisome even after the launch of its much awaited Eon. The industry was expecting a boost in Hyundai’s sales chart after Eon’s arrival. 
While the growth of VW, Toyota, Ford and M&M was a sigh of relief for the industry. With festivities around these OEM’s performed as they were expected to do. The growth was primarily pushed by the introduction of new products in their stable – Polo & Vento for VW, Etios & Liva for Toyota, Figo for Ford and XUV 500 for M&M. We’re sure with the all new Brio and the re-worked Jazz will do similar wonders for Honda in coming days.   
But, the recent increase in petrol prices have again fueled the discussion on how is it going to affect the industry. And to fuel the fire, the increase in Repo rates from the RBI will also hike the already soaring interest rates. 
To explain on how these factors are going to affect the common man let us take an example of the following scenario –
From the above table the following points could be inferred –
  1. The product price (Maruti Alto) has rose a decent 2% which is acceptable.
  2. The EMI has increased by a marginal 10%. The loan rates which used to be once lucrative has now made the common man think twice before finalizing his/her purchase decision. And with the volatility of the interest rates; it has pushed many consumers postpone their purchase.
  3. A whopping 70% increase in the price of the Petrol. It is difficult to digest the fact that fuel prices have hiked unprecedentedly over just a short time of two years. As the petrol prices have been de-regulated by the government – we would not be surprised to see the petrol price touch the century mark in a nearby time.
  4. Considering all the above factors, the total cost of ownership has increased by a considerable 22%. 

We at Management Punditz do not understand on Why does the government do not think about the Auto Sector and the people associated with it and is just concerned about the Oil Companies??? We’re sure that the losses beared by the economy as a whole is greater than the losses of the Oil majors. We hope government realizes the truth pretty soon.

Trend – Diesel Price (Rs/Litre)
However to exhibit the sudden upsurge in demand for diesel cars is due to the sustained increase in prices of the diesel and the long term benefit associated along with it. Today the performance and refinement between a petrol and a diesel car is surprisingly similar. Even the maintenance costs of a diesel machine has rationalized over the period of time. This makes Diesel Cars a sensible buy for the consumers. A perfect example to describe this – Out of a lakh bookings for the new Maruti Swift; 80 percent of the customers have opted for a diesel variant.
We hope that the recessionary trend in the Indian Auto Sector is short lived and as with the array of new launches, we see the sure-shot signs of revival.        

Indian Car Sales Figures – October 2011

October 2011 Sales Figures – Pan India
·         Fortuner sales lowest in past 5 months – 763
·         Bolero – away from the recessionary trend clocks above 8000 numbers
·         Alto in its worst phase – once ruled the segment with more than 33k numbers has dropped to 15k
·         Sunny sees a brighter side – the value for money sedaaan from Nissan does impressive 1340
·         Chevrolet BEATs the heat with a successful more than 5k figure with its diesel offering (for Beat)
·         Verna stands tall as the king of C segment – again overtakes the Honda in its own game – does 4217 numbers
·         Etios proves to be a growth booster to Toyota – along with Liva gains 5851 figure
·         Micra clocks it’s all time highest 1619
·         Eon does a modest figure of 6315 and already is 8th in Top 10 selling cars of the month.
·         Brio does 1220. Honda is already busy with 6000 bookings of Brio and is reeling with components issue (due to flood in its parts/component base Thailand)
·         Sumo and Indica has their best offtake number in last 6 months – 2109 & 10812 respectively.

Mahindra’s Blue Ocean Strategy

In a recent interview Mr. Anand Mahindra made a remarkable statement – “We will create a system that is impregnable”. The same could be highlighted from Mahindra’s current position – it is the only company in the world to enjoy its presence in all mean of transportation, i.e. ‘Air’, ‘Land’ & ‘Water’. According to Mr. Mahindra the most defensible strategy is to do multiple things and the combination of those multiple things becomes very hard for a competitor to emulate.


Recently Mahindra Aerospace & Government’s National Aerospace Laboratories announced the successful maiden flight of their jointly developed C-NM5 aircraft, marking an important milestone in their collaborative aircraft development programme.
This is the first step of Mahindra Aerospace’s dream “To do something potent in the regional aerospace – similar to what has been achieved in Rural Transport“. This is backed by acquisition of Gipps Aero and Aerostaff in 2010. Both the Australia based companies were involved in manufacturing small aircrafts and thus suited Mahindra’s vision to achieve ‘economical air transportation around the world‘.
The group is now also seen as the Indian Embraer! Anand Mahindra believes Indians would take to the skies if flying became affordable and Mahindra Aerospace will do everything to realize this dream. The dream of “Giving Wings!”


The company’s vision is to lead the development of India’s waterways and grow the marine recreation industry by offering customers an experience they will cherish. This further fuels Mahindra’s ideology of having a presence in almost every segment of the transport ecosystem.


Mahindra & Mahindra (M&M) manufactures utility vehicles (UVs), tractors, commercial vehicles (CVs), three-wheelers and gensets. It is India’s market leader in UVs and tractors. M&M, through its joint ventures
with Navistar, manufactures and markets medium and heavy CVs in India.
In land, Mahindra has dominant share in all its segments –
Source: SIAM, Company Data, Credit Suisse estimates

Mahindra earns a competitive advantage via a combination of a tractor and UV business in rural India. Both its UV and tractor businesses face very little competition and given that people earn their livelihood through most of their vehicles, its sales are less discretionary in nature. And Scorpio has proven to be a game-changer for the company and has help it transform its image from a people-mover to luxury SUV manufacturer. It has also become the group’s flagship for expansion into new market. 
One in two tractors bought today in India is badged M&M after the acquisition of Punjab Tractors. Two joint ventures in China, one with Jiangling and the other with Yueda Yancheng, has made it biggest tractor maker in the world in terms of volumes!
Also the acquisitions of Reva & Ssangyong has strengthened its dream.
All this was keenly observed by famous strategist and thinker Mr. C K Prahlad and named the whole milieu as “FORTRESS MAHINDRA”. Fortress Mahindra means that if you go into a certain mobility business where you can share procurement, where you can share research and development synergies, where you can share logistics, where you can share brand, you can share channel and then create a mobility web where it becomes easier to enter a mobility business that somebody else can’t and easier to defend when somebody tries to emulate. 
And as the historic moment of the launch of its most-awaited XUV 500 arrives, we’re sure that with this product M&M is sure of achieving its international dreams. We would like to end this post with wishing M&M all the best for XUV 500.
Reference: Business Today

The Escape ain’t over my friend

Mahindra Great Escape – Mysore

The Great Escape – Offroad Adventure Series by Mahindra continued its trail in Mysore on September 3rd 2011. This was the second event held in Karnataka within past two months and have already lined up a third in Sakleshpur on 10th September.  The participants were very enthralled as the event was taking place for the first time in Mysore. The ROYAL city had welcomed the guests with mild showers the previous evening and the weather was all set to make the track all more exciting. All the participants were gathered at the very beautiful venue – Silent Shores Resort and had the initial briefing.

Silent Shores Resort, Mysore

The event took off with a slew of Thar’s, Scorpio’s, MM540’s and a single Xylo. It was open for both 2WD and 4WD vehicles. 

Flag off
The convoy had to cover a trail of 95 kms and a stretch full of mud, sand, slush, rock, sand, filth and damp soil. Although the track wasn’t all difficult to conquer, it did have some very exciting points which tested the driving capability of the vehicle to the fullest. It had a line of 28 vehicles which acted as brothers in arms and amazed the audience it had during the whole path. Most of the villagers thought that some Sandalwood (Kannada) movie was being shot and were searching for the Actor ‘Darshan’.
The excitement among the crowd kept us entertained too
The most amazing part of the drive was the unexplored and striking meet with nature. The lakes, fields, narrow ways, slush and the drizzle helped us “re-claim” our part of life.  
Now coming to the heart of the show – the participants itself!!! 

First initiated in 1996, the Mahindra Great Escapes have evolved into spectacular weekend events. The routes are meticulously chosen to ensure excitement without compromising on safety. All through the route, there are rescue vehicles to help those in need. In addition, there are experts along the route who are ready to guide the drivers through difficult terrain that may require skilful driving.
The Best Pic


Mercedes grows younger!

Mercedes Benz India is the one of the first entrants in the luxury car segment in India and has enjoyed dominance over the years (more than 15 years to be precise!). The growing Indian market obviously bought competition and Merc was challenged its leadership position by BMW. Even Audi has emerged as one of the fastest growing brand in this segment.

This has literally taken Merc to re-think its positioning and the equity it enjoys in the market. BMW’s growth was primarily fueled by its craze in the youth and the feel of a sportiness amongst its models. And as the average age of the buyer in this segment decreased, Merc lost in the race. Most of the Merc buyers were in the 40-50 age group whereas BMW/Audi were the choice of the younger lot.

This took Merc on its heels and thus came Mr. Peter Honegg, who has recently taken in charge as the MD & CEO of Mercedes Benz India. The most crucial part of his induction was to imbibe Merc as an young, lively and a sporty brand. One of the foremost actions were:

  • *Bombarding a TVC of Legendary F1 Icon Schumacher driving the uber-sporty SLS AMG. The idea was instill and associate a RACING image for the brand. This would attract the younger aspirants in the luxury segment. 
  • *Mercedes also tried to leverage the status of being the oldest automobile brand in the world. This was also reflected in their advertisements where they projected to grow with the growing desires of the customers. It not only reflected their pursuit of perfection in every car that they manufactured but also connecting each car with their drivers. The urge to re-invent and the technical expertise was depicted by the amount of their patents worldwide (almost 80 percent of Auto patents is owned by Mercedes Benz!)     
  • *It is also planning to sell the tickets of the much-anticipated F1 serie which is to be organized at the Budh International Racing Circuit of Greater Noida. The tickets would be made available through the company’s dealerships.
  • *Mercedes Benz India’s Facebook fanpage has already garnered more than 41000 fans and it eminently projects MBI as a fashionable, sporty and an entertaining brand. 
  • *MBI has also inaugurated a star lounge in Delhi International Airport with SLS AMG on display.  
The company is now sure of gaining popularity in the younger buyers and also revive its position as the leading luxury manufacturer. The intention could also be seen in its fresh design of its models.