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Highlights
Maruti Wagon-R continues to be the best-selling passenger vehicle in India.
Tata Nexon is the best-selling SUV/crossover, followed by Hyundai Creta
5 SUVs/Crossover occupy the top 10 rankings, followed by 4 hatchbacks and only one sedan
The top 30 products command 82% of the PV market share.
19 of the top 30 products were having some form of discount throughout 2022
Prelude: Understanding Product-life-cycle (PLC)
In the automotive industry, each generation of product has two distinct phases in the Product Life Cycle (PLC). Phase one starts with a new generation launch based on a completely new platform or modified existing platform or the same platform with a different body shell, followed by successive model year (MY) changes - mostly limited to feature upgrades to keep up with consumer’s expectation and continuously defend territory from the competition. Phase two starts with a facelift (FL), again followed by successive MY changes. The extent and depth of FL and feature updates depend on the company’s vision and past performance of the product in the competitive landscape. The Ideal PLC timeline in India is 3+3, i.e facelift after 3 years of launch and generation change after the next 3 years. Usually, a single platform supports two generations of product and varies widely based on the manufacturer’s platform development strategy. MUVs typically have long PLCs due to their utilitarian aspect.
Discount or sales promotion is a tactical approach to meet the value perception of the target customer segment. As products age during the Product Life Cycle, they may need higher discount provision in a business case to counter competitive challenges which change from time to time. Hence incremental discount with product aging is always provisioned in the PLC business case. So, the products selling with the least or no discount deliver better value to the customer and in turn create more value for the manufacturer’s investors. However, if products fall short of customer segment expectations, there will be a call for higher discount to lower transactional price and match customer value expectations and push product out of the showroom, thus eroding profit margin, worsening business case and in the extreme case, discontinuation of product from the market.
Discount is also used as a tool to support sales in declining product segments or adverse market situations to support volume to cover fixed costs. The extent of the discount will again depend on the product’s inherent strengths and weaknesses.
360⁰ Performance evaluation
Based on these key parameters of PLC, we came up with a comprehensive 360⁰ evaluation method, which takes into account several key aspects to know the correct health of the product in the competitive landscape.
PLC timeline: Longer PLC usually means higher discounts in a later phase, successful products are an exception
Discounts on offer: Manufacturer/dealer sales push indicator
Market share growth: Acceptance among customer segment
Volume growth: This need to be seen in tandem with discount
Waiting list: Proxy for quality of demand generation
Rating system: best first
1. Outstanding: Exceptional performer
2. Good
3. Average
4. Below Average
Analysis
The Top-10 list is still dominated by Maruti’s products, followed by Tata, now with two products, and Hyundai is left with only one product
SUV/MUV/Crossover is now taking over higher ranks away from hatchbacks and sedans
Except for Maruti Eeco, all other MUVs in the list - Maruti Ertiga, KIA Carens, and Toyota Innova - are doing quite great, as there are no discounts, and the order backlog is also good
A CNG drivetrain gave a new lease of life to some products despite soaring CNG prices due to geo-political conflict in Europe.
Maruti
Wagon-R with twin engine and bi-fuel option continues with the tag of best-selling PV in India. This is largely driven by CNG options, which contribute 43% of sales. However, on the downside, all variants were selling at a discount in 2022.
All Maruti products on sale carry discounts in 2022, except for the new Brezza, Vitara, XL6, new Baleno AMT, and Ertiga.
Maruti Alto and Celerio are struggling as the new generation is available with huge discounts within a few months of launch.
2022 Maruti technology and feature focus
For the first time in India, Maruti has introduced a sunroof on its cars. Brezza got a single glass pane sunroof and Vitara got a twin sliding glass-pane panoramic sunroof.
Digital technology was the key focus and Maruti introduced a heads-up-display and 360-degree camera, bigger touchscreen infotainment on several products
CNG-fication of products continued despite higher CNG prices due to geo-political tension in Europe
Maruti also introduced AWD and Toyota’s highly fuel-efficient strong-hybrid technology on the new Grand Vitara.
Hyundai-KIA
The Hyundai Creta is the best-performing product here. Even in the third year of PLC, the product is selling like hotcakes without any discount whatsoever in a highly contested segment, still with a long waiting list.
Other products from Hyundai-KIA that enjoy similar performance are the Hyundai Venue, KIA Sonet, and KIA Seltos.
KIA Carens got very good acceptance in the Indian market
Availability of BS6-compliant diesel engine is also a key driver of Hyundai-KIA SUV/Crossover products in India
The i10 and i20 slipped out of the top 10 category and are available with discounts for several variants.
2022 Hyundai technology and feature focus
Tucson came loaded with several new tech features for Hyundai: ADAS, 360-degree camera integration, and HD digital instrument cluster
Hyundai Venue facelift received the segment's first electrically adjustable driver seat
Tata Motors
Post-facelift in 2020, Tata Nexon has shown phenomenal growth in successive years with feature additions. BEV variants introduced around the same time now contribute 18% of the volume, and that came on top of the existing volume.
Punch too is following the successful footstep of Nexon, and made it to the top 10 tally by creating a whole new micro-SUV/Crossover category, having currently all to itself
The CNG and updated battery and motor of the EV version have given a new lease of life to the otherwise languishing Tata Tiago.
2022 Tata technology and feature focus
The new EV drivetrain was a key focus area as Nexon got a bigger battery pack, and Tiago got a new EV drivetrain
Mahindra
Mahindra’s XUV 700 and Scorpio N are doing exceptionally well, whereas the XUV300, launched around the same time as the Hyundai Venue, is struggling and has the highest discount on offer in the list.
Bolero, the workhorse from Mahindra’s stable, seems to be having routine success in an uncontested market territory.
2022 Mahindra technology and feature focus
XUV 700 tech cascaded to Scorpio N in half measure
Toyota
Innova - the lone product from Toyota in this list is back on track without any discount and remains uncontested so far
2022 Toyota technology and feature focus
Toyota is trying to make highly fuel-efficient strong-hybrid technology mainstream in India as a bridging tech till the full EV transition
Innova Hycross became the most feature-rich non-CKD/CBU Toyota product that includes ADAS features, and a panoramic sunroof.
2022 new technology and feature focus
ADAS level 2 features became more common, as Hyundai, Toyota, and Honda joined Mahindra and MG. Automakers have to be more selective here, as most of the features do not work properly in India due to poor road markings and signs. What really makes sense is adaptive cruise control, as it adds a safety net to already existing cruise control, and next are blind spot and cross-traffic alert systems.
A panoramic sunroof is a new standard feature coming to most SUVs and crossovers because it offers a great view outside and lets a lot of light inside, thus making interiors feel more spacious. Clearly a big draw for family-oriented buyers. What the manufacturers are missing here is that the non-openable panoramic glass roof with thick roller blinds is the best cost-effective solution for Indian conditions. This will take less headroom space as frame height will get reduced, it doesn’t need an electric motor and drainage system. The non-openable system will make it safe as no one can stick their half body outside the car, and doesn’t allow dust to come inside.
Digital cockpit technology (infotainment/instrument cluster/head-up-display/wireless setup/360 camera set up) is reaching its next level as consumers prefer both functional and wow features, akin to their smartphones.
Ventilated seats are becoming the new norm across segments, as it is very convenient in the hot and humid climate conditions of India. What automakers should focus on next is to offer it for rear seats. Just like heated seats are standard equipment in most European cars.