AUTO PUNDITZ

Automotive Industry Trends

We read an interesting article on Economic Times with a similar topic and thought of presenting Auto Punditz’s view on the same. See what ET had identified as the Key Emerging Trends in the Indian Automotive Industry:


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We agree to the trends highlighted by ET; however we would want to rank it differently and is as follows:

  1. Word of ‘Digital’ – Though ‘Word of Mouth’ is still an important decision making criteria for the car buyer; Researching on Online Media has become an extremely influential tool prior to buying a New/Used car. We thus derive the term – Word of Digital to signify the impact Digital Media is making for a new buyer. Several comparison & review sites have blossomed in past few years and are seeing strong readership growth – No wonder 75% of buyers are Researching online in these sites before buying a new car.

  2. Petrol Resurgence – We had presented a statistical analysis on the subject a few days back and believe that Petrol models are the future and are going to dominate a much larger pie in overall sales. The Market Leader – 69% of Maruti Suzuki sales is currently contributed by Petrol models! Model-wise numbers is as shown – 

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  1. ‘UV’ology – The segment has grown a whopping 98% YoY; whereas the overall Auto Industry grew 11%. Significant volumes were added from the offerings of two biggest OEMs of the subcontinent – Maruti (Brezza) & Hyundai (Creta). Surprising is Brezza’s volumes with only Diesel offering as of now! See how the segment has grown –

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  1. Drive Automatic – AMT, CVT, Torque Converters and DSGs are collectively changing the way Indian’s are travelling! Don’t believe us? Than this fact will blow your mind – 57% of overall Skoda Rapid’s sales came from AT variants in Sep’16! Also a staggering 21% of overall Honda India’s Sep’16 sales was from their Automatic variants in the portfolio! Worsening traffic conditions in the subcontinent and more members of the family driving the car (ease of driving) are the primary factors for the increase in Automatic’s sales.

  2. ‘She’ is the man! –  Women today account for upto 12% of overall car sales, twice as much as five years ago. Not only that, the female of the household are emerging as the key influencer(s) in the purchase. Don’t be surprised that a car buyer prospect is not buying a car because his wife/girlfriend/mother does not like the brand/color/shape of the car! With increasing influence of Women power; automatics sales have also seen a hike. And so is the sales of Compact SUV’s seen an increment.

  3. Which Car? – Any segment should do! – Car buyers are not hesitating to explore higher segments (if value is sought). Ex: A friend of mine planned to buy an Alto, and ended up buying a Dzire instead. Seeking long term-value, consumers these days are ready to upgrade to higher segments and not keeping themselves restricted to a particular segment. Word of Digital is also proving critical these days, where buyers are influenced to buy other segment brands/cars.

  4. Power of ‘FINANCING’ -While entry level car buyers are inherently budget conscious, buyers up the segments are ready to flex the purchase cost. That’s the reason the tagged costly cars (like i20, Creta, Innova, City, etc) are doing exceptionally well in India. The reason being ease of ‘Financing’ – one would need to pay a meager Rs.2100/mth additional for extra per lakh financing. For Example: If a customer decides to buy a Hyundai Creta instead a Maruti Ciaz (and assume that the price difference is Rs.3 Lakh) – he/she will end up paying an additional Rs.6,300/month additional in the EMI than the planned EMI for Ecosport (considering a 5 year loan and interest of 9.5%). Aggressive promotion of pre-approved loans and other depreciation benefits also end up supporting a new car sale.