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Year 2017 Analysis – What Price? What Fuel?

With over 3.1 million dispatches from the factory, 2017 has been the best year for Indian passenger car Industry. To be precise September 2017 has been the best month ever in the history, followed by July and August.

Maruti and Hyundai too had their best monthly numbers in same period, others didn’t, and that’s what makes them worthy #1 and #2.

Price Range

Close to 80% of cars sold in India falls under ₹ 10 Lakh price level, ₹ (5-7.5) Lakhs range being most popular. Certainly base (₹ 0-5 Lakhs range) of price pyramid is getting narrower, it is visible sign of improving purchasing power. Still 90% of petrol powered car had a price tag of less than ₹ 7.5 Lakhs.

Thanks to compact SUV and Sedan, sub 10 lakhs priced product has brought lot of excitement for the buyers. A pointer to automakers to shift focus from low margin sub 5 lakh products to 5-10 Lakh range, as buyers are migrating to higher price range.

Engine : Petrol vs Diesel

Maruti is most preferred brand across petrol and diesel variants. Also, petrol is preferred choice of fuel for hatchback and diesel for SUV, rest, fall in between.

90% of petrol engines sold are 1200cc or smaller in size. And that’s good news for public in general and environmentalist in particular. Smaller engine means lesser fuel consumption and lesser pollutants too.

People usually tend to buy diesel SUV, however, compact SUVs like Ecosport and Creta has made owning petrol SUV more affordable.

Hyundai has widest range of petrol engines to offer in Indian Market followed by Maruti.

Despite appalling YoY sales figures posted by Fiat India, almost 40% of diesel cars sold in India are powered by Fiat’s Engine. For Fiat India, it’s not the public, but, Maruti is the biggest customer.  96% of Fiat’s 1248 cc diesel engine is sold through Maruti, rechristened as DDiS and rest by Tata.

1500 cc engine block is quite popular too; Honda and Nissan deploy it across their entire product range. Economies of scale certainly bring the cost down by using common engine block. However, there is tradeoff to be made, as smaller cars with larger engine may become tad more expensive or larger cars with smaller engine may feel underpowered.

Tata has widest range of diesel engines to offer in Indian Market followed by Mahindra and Hyundai.

(The article is written by Rohan Rishi. You can connect with him at emailrohanrishi@gmail.com)