2018 YTD Passenger Car Industry Analysis
2017 vs 2018 (January to September YTD)
With three quarters of the year behind us and two big festive season to go before the year ends, situation has become little challenging for auto manufacturers, due to rise in input costs and fuel prices. As both these factors are impacting the consumer sentiments at large. Let us see how passenger car market has performed so far in 2018 compared to same period (January-September) in 2017.
Industry grew by 6.9% so far over 2017
Maruti is growing much faster than the industry and yet doesn’t seems to be complacent in any way with product and technology onslaught
Hyundai has to wait for Santro’s launch to match industry’s growth rate by the year end
Tata has come very close to secure 3rd position, ceded to Mahindra in 2012
Despite good numbers from Amaze, Honda is yet reach last year’s numbers, largely due to City and Jazz’s numbers, feeling intense competition in respective segments
Ford’s growth is propped by Ecosport, no surprise why Ford in India is called one product wonder company
Similarly, Toyota’s growth is coming from mighty MUV ‘Innova’, rest of the story is not so hunky-dory
Despite facelift Kwid available in market, Renault is deep in red
Car Size Car Size
Small cars (<4m) are major growth driver of the industry in the current year largely attributed to Maruti’s products
Mid-sized segment growth is pulled down by shrinking sedan segment
Large car growth is led by Toyota Innova, rest all are stagnant or declining
India too caught the global SUV fever and growth of SUV/Crossover is no surprise
Sluggish growth rate of hatchback is largely attributed to shrinking base of small hatchbacks like Alto or Kwid
Large hatchbacks are doing pretty well
Mahindra Marazzo and upcoming Maruti Ertiga may bring MUV category back in black till year end
Though sedan segment appears to be growing, there is more than meets the eye. So we tried to peel the layers of onion to see how market demand shift towards SUV has impacted sedan segment’s growth.
Except for sub 4m sedan, every other sedan segment is in decline mode. Growth of sub 4m is led by only Maruti Dzire followed by recently launched Honda Amaze. Decline in premium sedan segment has been covered in one of our earlier article. The latest victim of compact SUV onslaught is mid-size sedan segment.
Since segment is de-growing YoY by 5.4%, 3rd generation Hyundai Verna launched in late 2017 has eaten into the Honda City and Maruti Ciaz’s pie. Despite the latter’s inherent strength, they were left with no choice other than to cede market share. Right now only relief for them is suicidal pricing of Toyota Yaris.
Toyota’s highly ambitious and miscalculated step has backfired badly. Four months since launch sales tapered down, so, Toyota has started offering discounts, that too in festive season. Moreover, Yaris doesn’t feel any special or premium over segment benchmark for two decades – Honda City, and at that price point Hyundai Creta looks far more lucrative too.
For manufactures, choice is simple now – start investing money, time and effort in SUV, where future market demand lies, instead of sedan! It seems, Ford’s global strategy to kill sedan by 2022, a more prudent decision, because at the end of the day, marketer’s job is to meet the needs of buyers, functional and emotional.
(The article is written by Rohan Rishi. You can connect with him at firstname.lastname@example.org)