[WorkingGuru]

These are wholesale dispatches, I'm confident the retail numbers are not so bad.

Maruti : They should to offer Ertiga XL6 with a diesel while they can. Why have plant shutdowns when there's so much potential with existing products ?

Hyundai : Creta looks good in the present design. I hope they just upgrade the engine with the BS6 compliant 1.5L VGT.

Venue is the blockbuster eating into Brezza, EcoSport & even Nexon.

Mahindra : They need to rationalise the price of XUV3OO.

The Marazzo could do much better & even take on the Crysta with a proper TC automatic transmission.

Honda : When cars like Jazz and City sell half the numbers in comparison just 6 months, they really need to realise that the car is good and that sale numbers can be achieved if they sweeten the deal.

Renault : They've kept the Duster numbers ticking even in these conditions. It's truly a good car, and can be revived to reach 2.5-3k if they improve the service, warranty etc. If not, it'll unnecessarily meet the same fate as Nissan.

The Triber is a really good offering and IMO it'll meet the BS6 norms with small tweaks to that tiny engine. I understand people may say the it lacks on outright performance, but IMO that segment will be sensitive to fuel economy and the tiny engine will be frugal in the highway. Moreover, for those who have max usage within the city, I'm sure the company will offer a CNG option at dealer level soon.

Tata : The Harrier, Hexa, Nexon, Tiago & Tigor are excellent products and the company should aggressively market them all. Including Hexa - atleast sell maximum units (at whatever price possible) until March 2020. Their brand has diluted and can't go down further. An aggressive push will ensure small service center's have a good chance to stay feasible. Don't wait for Rock Bottom.

Toyota: Revise the prices 20% up with BS6 introduction (as reported in various websites) and then you'll see the downfall of the brand. Though Fortuner & Crysta don't sell based on VFM factors, there's definitely a glass ceiling which they're not seeing. Beyond a point, sanity will prevail and much more people will choose the Ford Endeavour over the Fortuner and a Marazzo instead of the Crysta. I hear even Hyundai is going to come up with an MUV.

Anyway, with the news about GST reduction etc, I'm sure the numbers post September will be great. I'm optimistic about the auto-lobby reaching an agreement with the Govt.

Why? Things aren't bipolar/rigid like earlier. If the auto sector wants a GST reduction, I'm guessing that the govt should possibly be negotiating with the auto-lobby with leverage of passing a stern consumer-centric law against car-makers selling lemons. Possibly detailed regulations for the warranty conditions.

Either the auto sector chooses that or they themself offer long term warranty (like Toyota offers for 7yrs) with either time based or usage based preconditions & Insurance deals etc (to tide thru the slowdown).

Originally Posted by B103

I too used to compare car prices between India and USA. Now, I feel it is more realistic to compare prices + taxes between India and Western European countries or with a country like Singapore...

The comparison is based on the affordability of cars to citizens of that country based on income levels, not the cost of infra etc

[TheHelix0202]

Came across an interesting article online.
More than the increasing fuel prices, I find that the point about job uncertainty is what irks me the most.

https://www.moneycontrol.com/news/te...s-4421211.html

[oxyzen]

Originally Posted by B103

Electric cars can reduce the pollution but it too cannot solve the traffic congestion even a bit. Mass transport arrangements like metro is the only and only way ahead for Indian cities.

Congestion is something that is bound to happen in India. We like to make cities overcrowded to a point after which it becomes physically impossible to move. Cutting car sales in not the answer. The problem lies in the fact that you create countless multi-storied apartments with no empty spaces, be that for a park or lake or any sort of greenery. Instead of taxing the cars more to reduce congestion, the govt should focus on proper city planning. Pass laws that allow something like ''only 10% of the land you own to be eligible of high rise construction''. Yes it will make things more expensive, but that is the price we need to pay for a sustainable future.

People need to travel. And a lot of them want the convenience to have their own car. You cant take that away to curb congestion whose primary cause is high population density in cities. Fix the root cause.

[tarik.arora]

Originally Posted by aniketi

I think what he said is right. He is talking about lower middle class people who are trying to buy a car somehow to fulfill their dreams to own a one. For families like husband and wife carrying 1-2 kids with some luggage for company on two wheeler, anything which runs on 4 tires is way more safe than his existing two wheeler. Now Imagine same scenario in rainy season when roads are very slippery with mud and water on the roads. So for such people, car is not luxury but it's a utility, life saver. For others it is M-800, Omni or Alto, for them its nothing less than Mercedes or BMW.

I am one of those bashing Mr. Bhargava for his views, and i have my reasons:

a) You say that making safety features mandatory has increased vehicle prices. I ask, by how much? May be 20-25k at best? For a lower middle class person graduating from a two-wheeler to say an Alto, the difference in EMI for a 5 year loan is hardly INR500 and it further reduces to INR400, if the loan tenure is 7 year. Do you think this can be a deciding factor? I don't think so.

b) Next he compares our per capita income with those of western countries and says that "safety norms, which are prescribed in the developed countries, have no practical logic for a country like India". What kind of statement is this? Are our lives any cheaper than those living in the US or EU? With the kind of haphazard environment on our roads, we deserve even better safety equipment than developed nations.

I want to ask Mr. Bhargava on what has he done to ensure affordability in the A segment? Has Maruti given up its profits in the segment to ensure low prices? Has Maruti lowered its margins in this segment? Is Maruti providing these safety features on no-profit no-loss basis? With every iteration, Maruti products loose 50-100 kgs of weight, where are these savings going? Is Maruti offering low cost maintenance package for A-segment cars? My point is, for a company pocketing more than INR7,500 crores in profits every year, a lot can be done to ensure affordability in a segment where people find it difficult to make the ends meet.

P.S.: There are certain points from his interview that i agree with. Increase in insurance costs, fuel prices, and road-tax have increased the burden on a buyer and Government should have planned it better. May be the implementation should have been spread across 1-2 years.

[B103]

Originally Posted by oxyzen

People need to travel. And a lot of them want the convenience to have their own car. You cant take that away to curb congestion whose primary cause is high population density in cities. Fix the root cause.

I am afraid that would not be practically feasible where population is high.

Japan has one of the highest population density. They don't have the geographical luxury to spread the population out thin and wide.There are lot of high rises and Government tries to discourage car ownership by taxing them high and incentivizing small cars.

Governments can plan to move people by deploying mass transport solutions. They have to think of moving every strata of the society and not just people with cars. It would need much more resources and money to move cars that can move people inside them. After some time, that solution again would not scale too.

http://bengaluru.citizenmatters.in/b...ted-road-33246

[CarBot]

Currently I have 2 cars from Renault . A Duster manual and Kwid Automatic. I am really worried with Renault now. Funny thing is my family is looking at buying another Renault - Triber. They don't understand the math behind car sales and how it affects brand value / sales / ASS etc. But the pricing, looks and 6/7 seats makes it value for money.

If you see Duster sales number has not increased inspite of new face lift model.

Ertiga's waiting period of more than 4 months during tough times is astonishing. MSIL knows how to market a car.

[cityslicker86]

I noticed something strange, Maruti's sales have dropped by 10K units like clockwork since April 2019. Isn't it strange? Also, Maruti seems to be suffering the heaviest sales drop. Tata and Honda have dropped too, but not as much as Maruti (maybe because Maruti has a larger base, but still).

If we take out Maruti's sales, the overall sales drop isn't that bad, definitely not alarming. Maruti's drop is mainly because of drop in demand for Alto. Mr Bhargava can cry hoarse about new safety regulations raising the price of Alto and all that, but Maruti killed all competition for Alto (including Eon) with its aggressive pricing and shoddy safety standards, keeping the A1 cake for itself. Now they are in soup.

Other than price rise, a factor in Alto sales drop could be dwindling interest of millenials in buying a car. Unlike popular notion, not all millenials are fancy MBA grads with fat pay checks. They earn modest incomes, but are highly aware and independent. They are a large chunk of Alto's customer base I suppose, and their lack of interest in buying a car must have had its effect on Alto's sales.

All said, the routine 10K sales drop of Maruti is strange indeed.

The auto industry then isn't struggling across the brands, just Maruti, Tata and Honda. The others were struggling anyway, so nothing new in that. Just bad business as usual.

Separately, interesting to note that Hyundai Group (Hyundai + Kia) now has an almost 23% market share. They are for sure not cry babies, and the anticipated GST cut will only push their market share further (Creta and Seltos sales will benefit immensely as they are already segment leading)

[gopalnt]

Originally Posted by cityslicker86

I noticed something strange, Maruti's sales have dropped by 10K units like clockwork since April 2019. Isn't it strange? Also, Maruti seems to be suffering the heaviest sales drop. Tata and Honda have dropped too, but not as much as Maruti (maybe because Maruti has a larger base, but still).

If we take out Maruti's sales, the overall sales drop isn't that bad, definitely not alarming. Maruti's drop is mainly because of drop in demand for Alto. Mr Bhargava can cry hoarse about new safety regulations raising the price of Alto and all that, but Maruti killed all competition for Alto (including Eon) with its aggressive pricing and shoddy safety standards, keeping the A1 cake for itself. Now they are in soup.

Other than price rise, a factor in Alto sales drop could be dwindling interest of millenials in buying a car. Unlike popular notion, not all millenials are fancy MBA grads with fat pay checks. They earn modest incomes, but are highly aware and independent. They are a large chunk of Alto's customer base I suppose, and their lack of interest in buying a car must have had its effect on Alto's sales.

All said, the routine 10K sales drop of Maruti is strange indeed.

I agree. It is Maruti which is severely affected by the sales slump. When the sales are down across the board, it should have been Maruti whose market share should have been intact given its reach, even if it had sold less number of cars. But its share has come down to 47% from 53% in the last few months. This is very interesting.

[AnandB]

3. These manufacturer-reported sales numbers are factory dispatches to dealerships. They are NOT retail sales figures to end customers.

I would say this is the main reason for such decline in MS. In last 1-2 years in Raipur itself MS has aggressively opened up at least 5-8 new dealerships including Nexa/Arena, which is not needed for the city size. I imagine they did the same all over India. Maybe it was to use the momentum and increase capital at the same time but i pity owners of these dealerships now.

I get the same dread thinking about it when i used to see loads and loads of cars just standing in the lot of so many dealerships in US. Where do they even go, they don't even have population like India

[Dsan]

Another reason for drop in MSIL sales in particular could be Rural Distress and unemployment.

Maruti sells around 1/3rd of it’s cars in rural India. With high input cost in agriculture sector, savings are almost non-existent for a poor farmer. This directly translates to drop in sales of alto and wagonR.

[5kmiles]

Originally Posted by AnandB

I would say this is the main reason for such decline in MS. In last 1-2 years in Raipur itself MS has aggressively opened up at least 5-8 new dealerships including Nexa/Arena, which is not needed for the city size. I imagine they did the same all over India. Maybe it was to use the momentum and increase capital at the same time but i pity owners of these dealerships now.

I get the same dread thinking about it when i used to see loads and loads of cars just standing in the lot of so many dealerships in US. Where do they even go, they don't even have population like India

Place where I live in Gurgaon (Sec 48), there are 2 Arena and 1 Nexa showroom in 3-4 kms radius. 1 more Arena is coming up. Weird.

Ford debt has been declared as JUNK in US. Expecting them to wrap up India soon in one form or another.

Cars are obscenely priced and manufacturers are collectively ensuring that slump lasts one more month to drive GST revision. Tata has increased the price of Hexa by around 25-30k this month and discounts are very low for a dead product. Tata Hexa will be stopped soon, it seems.

Collective loot by auto manufacturers had to stop at some stage. Hope it teaches them a lesson. Sad for the economy and suffering of those who are directly or indirectly employed by the industry. However, by not building export quality products and required capabilities, auto cos shot themselves in the foot.

During my ongoing car hunt, I find dealers not interested in or capable of selling cars. Toyota dealer in a massive Fortuner and Innova market like Gurgaon has 1 Innova and 1 Fortuner for TD that it rotates in dealerships across Delhi and 2 showrooms in Gurgaon. Don't have Fortuner and Camry even on display. No top-end Innova on display. They don't even ask for the name or phone number after the car is unavailable on display and for TD. Same for Tata - they are just sitting idle and salespersons are bad. Only marginally better than Toyota. They have to reminded on call to send the quotation. Only dealership that delivered wow experience was Jeep. Excellent interiors, well-trained staff, knowledge about the product etc.

[AutoSphere]

Originally Posted by Dsan

Another reason for drop in MSIL sales in particular could be Rural Distress and unemployment.

Maruti sells around 1/3rd of it’s cars in rural India. With high input cost in agriculture sector, savings are almost non-existent for a poor farmer. This directly translates to drop in sales of alto and wagonR.

Another reason (though simplistic) could be that car buyers can be divided into two categories:
1) Those who are really looking for a good car and NEED one- and so they do adequate research in terms of features and then buy the car.
2) Those who just WANT to buy a car, for a multitude of reasons (like neighbor"s envy, etc, etc)

With no offence meant to anybody, in my opinion, the second category contributed substantially to Maruti having a huge market share. With the economy slowing down, many buyers must have have decided to either postpone or cancel their decision to buy a car - and this affected Maruti quite a bit.

The first category, who really need to buy a car continued to look for features/VFM, etc and continued to buy a non-Maruti vehicle.

[chittybang]

A lot of these numbers could be attributed to companies reducing their stock. After all BS VI is around the corner. So this makes me wonder if all these sales numbers were inflated all this while. Especially maruti cutting down so much means they had stock far beyond what sells. Sure a part of this is because of low demand as well but it appears like one of the factors and not the only one. Are these manufacturers using this slowdown to arm twist the govt for a price cut instead of giving discounts

[neil.jericho]

Over the last few months, here in Cochin, I have noticed that the number of new Hyundai Cretas have steadily been dropping whereas the number of new Venues (almost all in white and being higher / top end variants) have been rapidly increasing. I am sure that many buyers who wanted a SUV-ish Hyundai are downsizing their purchases and preferring the Venue over the Creta. I know that Hyundai will take any sale over no sales in these economic conditions but I cant help but wonder if this downsizing of the SUV purchases will bode well or not for Hyundai in the long run. Kerala is a good market for Hyundai and I would assume that Hyundai prefers selling the Creta (in terms of profit/car) over the Venue, maybe Im wrong.

Also despite Onam, there have been very few new cars running with Temp registrations on the roads in the last week. I can count on two hands the number of new cars and bikes that I have spotted with temporary registrations in the last week. Even established shops selling white goods didnt seem to have the festive footfalls that we have seen in the past. I dont have high hopes for car sales in the coming few months.

[samaspire]

To me it feels like the car companies are playing chicken with the government. And they are hoping the government blinks first and offers them sops to stop the downslide.

I just wish the government can hold off enough to induce price reductions across the board.