Movers & Shakers
Being the last month of the Indian financial year, March usually sees a spike in demand from corporate houses & businessmen looking for depreciation benefits. No surprise that last month’s 2.43 lakh shipments were the highest in 12 months. Still, manufacturers aren’t entirely satisfied, simply because that’s a massive 37,000 cars lower than March 2012. Everyone works for year-on-year growth, some accept a flat year, but a shrinking market gets your goat.
An ICRA report states that dealers are reporting a worrisome drop in customer inquiry rates. This drop has been observed both in urban markets as well as in smaller towns and rural areas. ICRA says that profitability metrics of the industry will be impacted over the near term in view of:
(a) Higher expenses related to the launch of new models
(b) Increase in employee costs as several manufacturers have announced substantial wage hikes
(c) Likely sustenance of discounts-led sales push
(d) Restricted pricing power in the wake of intense competition.
Because of cars based on the Swift platform (Swift, Dzire & Ertiga) and the ever dependable Alto + WagonR, Maruti did the best it could, closing the month at 1.07 lakh dispatches. While that’s 5K units down from last March, the % fall is lower than the overall industry…Maruti actually gained market share points YOY. The Dzire is on a roll, touching a whopping 20,000 units, with Maruti clearly trying to minimize waiting periods of the diesel variant. After all, it’s finally met a formidable competitor in the Honda Amaze. The Ertiga crosses the 6,000 level after 3 months of trying. Its upcoming CNG variant should expand the customer base a little. Speaking of UVs, the Omni isn’t doing too bad for being a petrol-only 30 year old van.
Despite a smaller base, Hyundai also lost 5K cars year on year. In fact, the Korean giant didn’t realise any gains from the month of March, with overall sales being lower than Jan & Feb! Even though the Eon, i10, i20 and Verna put up a respectable show (as always), and the Elantra does lead the D1 sedan segment, Hyundai hasn’t expanded its product portfolio in tune with the times. The next-gen i10 diesel still isn’t here, and there is no compact SUV, sedan or MUV coming up in the near future either. Manufacturers that quickly adapt & react are kings of the future.
No year-on-year losses for Mahindra which continues to go from strength to strength. If you thought the Bolero had peaked, well, you were just plain wrong. The rugged UV sells near 12,000 copies in March! The Scorpio has a great month at 4.6K sales, but the XUV500 is no longer outselling its cheaper sibling. Mahindra ought to be concerned about the XUV’s slide for the 3rd month in a row. The Quanto is outsold by the bigger, more expensive Xylo after a long time. The premium Rexton is an unexpected success, second only to the indomitable Fortuner in the 20-lakh SUV category. For a niche 4x4, 700 units is a cause of celebration for the Thar.
Toyota is equally on a roll. One of the few manufacturers to record year-on-year gains, the big T has its best-ever month in India. Improvements to the Etios & Liva appear to be well-received and there is no stopping the Innova and Fortuner who attain all-time highs. Interesting to see how the Corolla demonstrates a massive improvement in performance, missing segment leadership by merely 2 units to the Elantra. I’m also pleasantly surprised by the Rs. 1 crore Landcruiser (my perennial favourite SUV) moving 30 pieces! The 1st April party sure must have run long into the night at Bidadi.
No such celebrations in Pune though, as Tata Motors loses 2/3rd of the sales volume from last year. March 2012 had 37,000 Tata cars shipped, March 2013 saw a mere 12,000. These are incredibly trying times for Tata. The competitive scenario has intensified and mess-ups of the past 3 – 5 years are catching up. It’s depressing to see a competent vehicle like the Aria move a mere 13 copies, and the brilliant Nano only 1,500. The Indica & Vista do bring some sunshine while the Sumo remains a consistent performer. The Storme doesn’t appear to have made any difference to the Safari range.
After struggling with under-utilization of its factory for a year, things are finally brightening up for Honda. The company has made use of its entire production capacity in March 2013. The Brio’s score of 4,000 is its best in 6 months. The City goes up to the No.2 spot in the C2 segment, defying the market’s obsession with oil-burners. As if to match, the Accord has quite a recovery too. We’ve bid adieu to two cars from Honda’s portfolio, the Civic and the Jazz. That’s not the real news though: The upcoming Honda Amaze is. Hope you’ve read our detailed review elsewhere on Team-BHP.
It’s nice to see the competent Beat climb back up to the 3,000 mark. The entry-level Sail sedan outsells its under-performing hatchback sibling for the 2nd month in a row. Both cars however look old and this doesn’t go well with the market. The Tavera remains one of Chevrolet’s most consistent performers. Yet, the company knows there is no real good news in these numbers. Chevrolet is very close to getting lost in the crowd and it’s going to take some marketing brilliance to get its otherwise competent products gain traction again. The Spark, Beat and Cruze have sold a fraction of what they did in the same month last year. Along with Tata, Chevrolet faces the biggest branding challenges.
Last year, Renault was second from last in the manufacturer rankings. This year, it’s moved up the grid to position no.8. What’s more, year on year volumes shoot up an astonishing 8 times! Reason? One word = Duster. The surprise performer from Renault’s portfolio is the Fluence which has recorded a sharp increase in volume, having outsold cars like the Cruze, Jetta and Laura. That’s quite a feat. The backseat-oriented Scala sees 4-digits for the first time in its life.
The all-rounded VW Vento goes past the 3K milestone after a long time. VW’s premium range of cars move up, with the Jetta, Passat and Touareg having a strong month. On the other hand, the Polo is missing a cylinder and records its 3rd month of decline. A cutting-edge TSI engine is coming up later in April, albeit pricey petrols don’t usually get far in India. While VW’s performance has improved over the recent couple of months, year-on-year growth is in decline. The brand has lost over 20% in volume.
Not much of a month for Ford and Nissan. Compared to March 2012 numbers, they’ve lost 42% & 64% respectively. Within Ford’s portfolio, the Figo is a respectable sales performer. For Nissan, there isn’t a single car that can be termed even as an average success.
Skoda’s numbers have dropped to a dismal average of 2,000 / month since July 2012. Trouble is, there are no signs of improvement. After spending 13 years in the country, the company doesn’t have 1% market share; later entrants like Renault & VW enjoy a share that’s 3 – 4 times higher. Tough times that call for tough measures, if you ask me.
There’s only one happy face at the back of the classroom and that’s Hindustan Motors! HM's report card shows year-on-year growth yet again. The vintage Ambassador and 20+ lakh Pajero Sport are doing well for their respective market positions. Whatever Fiat does, it just isn’t enough for the market.