Let us Judge Cars by its Sales (Volume)
New Launches Performance Analysis
It is always too early to judge the performance of any new product based on early sales figure, as there could be production and delivery stabilization going on in the background. But a full year is good enough to do so. So let us have a look at the performance of mass market products launched in the year 2016. Cells highlighted in green are doing exceptionally well, whereas orange indicate growth, but far less than expected and red ones are warning signals for respective manufacturer.
Maruti Vitara Brezza
Blockbuster! This time Maruti got the shape right with such small size, unlike S-Cross. Design seems to be inspired by Range Rove Evoque and that is working big time for Brezza. Packaging and pricing is spot on. Given the lifestyle oriented personality of Brezza, it makes more sense, to be sold through premium dealership of Maruti, called NEXA. But as per media report, Maruti’s traditional showroom owners protested against the move, hence it is sold through regular dealership. Does that mean, it is the product that counts and not the showroom ambience? That’s food for thought, keeping in mind the investment which goes into setting-up NEXA showroom.
After 11 long years Toyota decided to bring in new generation of Innova. Price has gone up, so is the premiumness, engine & transmission options and power output. Numbers are stronger than ever before. It is astonishing to see how Toyota got the right recipe for high margin product which is MUV! It is just a pipe dream for others.
It is an indication that, personal car buyers are returning to Tata’s showrooms to buy cars, as 80% of Tiago sold are petrol powered. YoY sales grew by 60%, no wonder if it breaches 9,000-10,000 monthly sales mark and catapult Tata in 3rd spot. Indica did the same for Tata Motors in late 90s and Tiago seems to be perfect replacement for Indica.
New gen Fortuner’s sales numbers is astounding. Lexus inspired design makes it feel more contemporary, still it retains old school SUV charisma. With every passing year it has gained more buyers, except for 2016, which is transient phase. Similar to sibling Innova’s story, it is just a pipe dream for competitors.
In terms of numbers, it even cannot hold a candle to its predecessor. It’s not product’s fault. Rather it is the segment which is dying. Essentially it is fighting a lost battle. Appetite for sedan in the price band is over as buyers are craving for SUV.
Segment itself is on decline due to SUV onslaught in same price band. Still Superb is able to sell little more and expand the segment too. It is handsome, has nicely appointed interior, lots of space and modern gadgets, what essentially buyers look for. Audi A4 or A6 is just glorified Superb, so just imagine how much value for money it is. Jokes apart, 60% of Superb sold are petrol, that’s a surprising departure from the usual diesel dominance. Does that mean people are buying it for thrill of TSI engine?
Honda Accord (Hybrid)
It cost around ₹ 45 Lakhs (Ex-Showroom), for ₹ 1 Lakh more, you can buy Jaguar XF diesel. Need we say anything more? With high level of taxes, Government has already thrown the idea of hybrid vehicle out of window, to favor pure electric powertrain. So, if Honda really feels that there is demand for Accord like vehicle, then, they should transplant a diesel engine, or else keep on wasting money on importing hybrids, which virtually has no takers.
Redigo shares the platform with Renault Kwid, but it is not as successful as sibling. Whereas Kwid styling is inspired by SUV, Redigo looks like highly modified Tata Nano, wearing Datsun family look. There it loses the plot. 2k monthly average figure will go downhill only.
Mahindra KUV 100
Mahindra’s second attempt to enter hatchback segment, with an investment of ₹ 1000 Crore. First was Verito Vibe, a notchback based on Verito (earlier Renault Logan). Since SUV is flavor of the season and very much in DNA of Mahindra, hatchback was styled as mini SUV. But side profile was not pleasing to look at, feels like design team was more inspired by frog, unlike XUV which was inspired by Cheetah. This segment is dominated by petrol engine and buyers are spoilt for choice with refined products since long time. As first attempt to build petrol engine, KUV 100 was having many rough edges. Fuel economy was dismal due to larger capacity AC and ECU mapping, and owners complained of vibrations in higher gear ratios namely 1st, 2nd and reverse. Thus numbers took a dip and Mahindra started course correction, quickly followed by an update, as KUV 100 NXT. Seems that is not working too.
By the time VW developed a sedan to take advantage of 4m length based tax structure, by doing some genetic mutation of existing Polo and Vento, segment leader Maruti Dzire has not only raised the bar with 3rd generation product, but also changed the rule of the game. VW must better go back to the drawing board (or Genetic Lab) with new Polo and Vento, slated to be launched in late 2018.
It is just reincarnation of Honda Mobilio, which now has borrowed dress from City and high heel sandals from CRV to fit in the definition of SUV rather than MUV. Sales graph trajectory is similar to Mobilio too. High time for Honda to shelve the Brio platform and stick to successful City platform for future product development in India.
Sometime when companies become too overambitious, they fail to learn from their own past mistakes or hate to acknowledge one. Hyundai did not learn anything from Santa Fe, which you will find later in this analysis. Tucson seems to be overpriced by at least ₹ 3 Lakhs. Why marketing team made a tradeoff to let the product die rather than slashing price and giving it a new lease of life. If they think that such a move will hurt the brand, then, they must think on the write-off on investment they have to make when a product die, even before the normal lifecycle end(usually it is 6 years in India). Seems they don’t invite their accountants for product review meetings.
It started its journey as mini Xylo, also known as Quanto. Xylo itself was not very good looking. Wonder how they designed Xylo? They brought in hulk looking Scorpio in design studio and hammered it from all the directions, till it started sulking. Quanto failed miserably because of looks. Still Mahindra didn’t lost hope and rechristened it Nuvosport, gave it nice looking face, but awkward body style remain the same, hence one more failure. When TUV 300 was already there in the pipeline, then what sense it makes to invest on Nuvosport.
2017 – Discontinued Products
Honda has built its brand by selling highly desirable products like City, Civic and Accord. All were premium and that is buyer’s perspective. But then, in order to get into volume segment, it decided to sell mass market hatchback Brio. It was not premium at all, as per Honda’s the then standard. So every product built on that platform met the same fate, Mobilio became victim in 2017, as Honda insisted on premium pricing. It was pricier than segment bestseller Maruti Ertiga, but interior felt cheaply made. Its soul is not entirely dead, rather it reincarnated as an SUV called BRV, which you will find in the first table, standing again with a red flag in hand.
Hyundai Santa Fe
It lost all its steam within three years of its launch. Over ambitious pricing took a toll on its number. Younger brother Tucson is in first table, might appear in this table next year for very same reason.
Renault Pulse & Scala
Pulse and Scala are basically Nissan Micra and Sunny, respectively, wearing just a different color of tie, but asking higher price (20k to 60k). Product planners at Renault must have been very convinced that Indian buyers will simply pay premium, just because the car is having a Renault logo on bonnet instead of Nissan. But Indian buyers didn’t.
General Motors – Chevrolet
Not every year you will witness a car company winding up sales operation in India. But General Motors, owner of Chevrolet brand did that in 2017. Still they retained manufacturing plant near Pune and started exporting left hand drive models to Mexico, South America and other nations. GM has retrenched from Europe as well, by selling out Vauxhall and Opel Brand to PSA France. Detail analysis is available here – Source. We simply don’t want to see Nissan and Fiat doing the same next year.
2017 – Launches
Next year same time we will check the performance of below products, launched in 2017.
Imported Lexus SUV were quite popular in India when Mercedes Benz M Class was only Luxury SUV sold through company’s dealership. As several luxury car makers set their shop in India, around 2005, charm for imported cars started waning. Lexus is now very late to the Luxury car party. Brand has entered in India with mostly hybrid product portfolio. All the products are imported so price is quite exorbitant in comparison to competition. Local assembly is also on cards by leveraging parent Toyota’s plant near Bangalore.
Brand has not generated much excitement though, just like when Jeep entered India in 2016 with hefty imported price tag. Sometimes Lexus is also called glorified Toyota. For example Lexus ES model launched in India, priced at ₹ 58 Lakhs, uses drivetrain quite similar to ₹ 37 lakhs priced Toyota Camry Hybrid. Design language is very futuristic, more sci-fi kind, but front grill design is very polarizing, either you love it or hate it, even you can ignore it, as there are many good looking luxury brands on sale in India.
(The article is written by the Newest Pundit on the team – Rohan Rishi. You can connect with him at firstname.lastname@example.org)