[GTO]

This Analysis has been jointly prepared by GTO & Vasudeva. Many thanks to Vasudeva for his support.

Abbreviations used : MOM (Month on Month) and YOY (Year on Year).

Industry seems to have recovered with 8% growth in 6/2009 over 6/2008, and exactly the same as May 2009 (MOM decline a marginal 0.4%). The mid-size sedan segment has crashed by 20.1%, in favour of the A2 hatch segment that has grown by 23%. Evidently, the 4 – 6 lakh rupee hatch segment is where all buyers are running toward. The other positive news is the recovery in the Utility Vehicle segment which was declining since late-2008. That means Commercial & BPO markets are picking up. Does that mean that the bad economic times are ending soon??

[GTO]

Hatchbacks:

• The 800 has improved 4.4% month-on-month, but is down a massive 55% year on year. Piddly sales of a mere 2438 cars sold. While Maruti has succeeded in having the Alto take over the 800’s mantle, what about the 800’s future? It seems even Maruti hasn’t yet decided.

• Buoyed by its new launches (A-Star, Ritz), Maruti has managed to clock a massive 22.2% rise in the A2 segment, selling 46,000 hatchbacks in June! To give you perspective, that is more than all other competing hatchbacks – petrol & diesel – COMBINED. However, MOM sales are down 14.1%, partly due to the May surge of a fresh launch (Ritz). Further, reports suggest that the practical Ritz is outselling the previous best-seller Swift.

• As I’ve posted earlier, Hyundais hatches (primarily the Santro + i10) are maintaining a consistent 20,000 cars since the start of this financial year. Sales are down 2.6% MOM but up 12.2% YOY (i10 Kappa + i20 effect). Unless Hyundai gets in a well-priced diesel for its cheaper hatches, these numbers aren’t going much higher.

• The Indica Duo (old Indica + new Vista) are up an impressive 19.3% YOY (10,210 sold in June 2009), no doubt helped by the Vista. Still, I insist that the full potential of this hatch hasn’t been realized (thanks to botched up positioning). MOM up by 2%. Note the high UV growth in 6/2009 and it all becomes clear.

• Fiat is seeing these kinds of numbers after a long time! After selling 200 – 300 hatchbacks a month for ages (palio), the Punto has taken their monthly hatch tally to 1,563. If you consider the Palios average monthly tally of 200ish cars, the Punto managed 1,300 sales in just 13 days. Good start.

• The Honda Jazz may be overpriced, but it’s managed a good start with 2032 cars sold! A heck of a hatch, only marred by the high price tag. It must be noted that, if at the time of fresh launch, this car has sold 2,000 odd examples, we can expect it to settle to about 30 - 40% less eventually (once the new car euphoria dies down).

• In the hatch segment, General Motors is up a whopping 43.1% YOY with 3,173 hatchbacks sold (primarily Spark), parent’s bankruptcy notwithstanding. However, since they’ve cut the Spark's prices, volumes are slightly down, and lowest since February 2009 (MOM negative of 12.3%). Clearly, only a small percentage of potential customers are affected by GM USA’s bankruptcy. IMHO, GM India’s CEO Karl Slym did a fantastic job of managing the PR surrounding GM’s bankruptcy. Instead of playing avoidance, he took the news head on, gave long interviews to anyone in the media who was willing to listen, and personally appeared in ads & on their website.

• The Fabia continues its downhill run on all 3 cylinders. This expensive hatch sold a mere 196 cars in June 2009, the lowest ever, and down a whopping 70% YOY. Clearly, Indian hatch buyers are looking at value (not expensive service costs) and reputation. Consider hatch buyers to be the most risk-averse.

• I don’t get why Ford is producing (66) and selling the Fusion (58). Such low volumes have got to result in losses / too high a cost, and a failed product in the showroom dilutes the brand. The Fusion is 71% down year on year from what were already embarrassingly low sales.

[GTO]

C Segment sedan:

• Class-topper Dzire leads, and alongwith the SX4, manages a total of 6,100 cars moved off showroom floors. YOY up 5%, MOM minus 10%. Classic story of the average student leading the pack. The Dzire really doesn’t score highly on any one particular area, yet a Maruti diesel well-priced sedan provides enough value for the market.

• Tata trundles along with 3,522 Indigo’s. After the Dzire, the Indigo is the second-best selling sedan in India. However, when you bring the cut-price Indigo CS into the picture, no one will argue that market performance should have been better. MOM up 24.4%, YOY down 26%!. Indigo Vista anyone? Does the car have what it takes to fight the Dzire?

• Further, consider that the Indigo sedan is based on a 11 year old hatch platform (Indica) and that the Dzire is based on a best-seller sedan (Swift). Be assured that these cars are raking in enormous profits for their respective makers.

• Is it the Jazz effect on the Honda City (2,351 cars, down from 3,638 in May)? While YOY sales are lower by only 5.6%, MOM sales have crashed 35%. Consider that the C segment has posted a month on month loss of only 7%, no C segment sedan has gained substantially, and its clear that the City has lost out to the Jazz. Strange are the cross-shopping habits of our market.

• The Ikon & Fiesta are not doing anywhere as good as Ford would like them too (total 1737 in June). The Fiesta has lost its diesel USP to newer competitors (Dzire, Linea etc.). Somehow, the well-priced Ikon has not done as well as we’d predicted it to. The sedan may have gone long in the tooth, but it does provide great value, a fuel efficient diesel and a superb backseat. Fords sedans are down 40% YOY. No fuel-efficiency drives helping here!

• Just as Ford is losing out with the Fiesta, Hyundai’s Verna & Accent continues to slide (total 2,648). YOY sales negative by a whopping 29%, month on month by 2.1. Unfortunately, neither Ford nor Hyundai have a replacement sedan coming up anytime soon. They must be cursing the Japs (specifically the Dzire & the City).

• As we’d predicted earlier, the Linea seems to be settling down to an average monthly tally of 900 cars (911 in June). About the same as the previous month (901). If Fiat manages to improve its after-sales and brand image, they can maximize the potential of the Linea.

• You gotta hand it to HM. Come competition, come different market situations, but they will NOT change their style of working. It’s like they are oblivious to changing market conditions. The vintage Ambassador, old Lancer and competitive Cedia together manage to sell only 587 cars in June. Down 16.5% YOY and about 5% MOM. Remember the news channels showing how Chidambaram & Indian babu’s have moved on from the Amby?

• We’ve already bid adieu to the Aveo, but GM has yet to complete the farewell ceremonies. A mere 160 Aveos sold. Down 54.2% YOY. Likewise for the Optra with a miserable 97 cars sold. IMHO, GM’s got the diesel Optras pricing & marketing all wrong. It’s a heck of a sedan, great power and awesome ride quality (amongst the best in this segment). Yet, cheaper competitors are walking all over it from the bottom, and the Altis etc. from the top.

• A market failure = The premium priced albeit low cost sedan : Logan with only 500 cars moved out of showrooms. Taxi sales down as well. Hope this teaches the others a thing or two about pricing cars competitively.

[GTO]

C+ Segment:

• The Toyota Corolla Altis retains its position as champion of the C+ segment with 714 sales; its not hard to see why. Practicality inside out, excellent after-sales, healthy taxi sales (tourist) take the Corolla to the top. In fact, Altis seems to be the only car posting extraordinary growth in 6/2009. Lean times mean less flashy cars perhaps???

• The Honda Civic resurges, but only just so much, finishing off June with 451 cars. While MOM sales are up 102.2% (May was terribly low), YOY sales have crashed by 59%. Clearly, buyers are seeing value in the City (90% Civic for 75% price), or across direct better equipped competition like the Altis.

• The Laura & Octavia sold a total of 737 cars, down 28% YOY, but up 12.5% MOM (no doubt aided by the face-lift Laura). These are probably the only cars from their segment which arent able to capitalize on the diesel advantage. Is Skoda going to wake up on its shoddy customer care standards?

D Segment:

• Surprises at the 20 lakh point. Firstly, the premium sedan segment has crashed by approximately 46% (20 lakh+ sedans). The Superb outsells the Accord for the first time, but only just (212 Superbs versus 205 Accords). Clearly, the Superb is an outstanding sedan (hatch), filled to the brim with goodies and with a delicious price tag. I’m certain she’d be good for atleast 400 cars in the market, if it weren’t for the lousy Indian customer service + Skoda’s reputation. That said, the Superb is a 40 lakh car for half the price. I mean, even if you steal 10 lakh rupees worth of parts, one still ends up with a 30 lakh car for 20 lakhs. Okay, okay, PJ I know.

• Can anyone explain why Toyota drags its feet? Despite the Camry’s all rounded nature, and Toyotas badge value, the Jap company insists on importing the Camry as a CBU resulting in a stragospheric price tag. Market isn’t biting, hotel purchases down too. Only 4 Camrys moved in June. The otherwise competent Sonata has now resigned itself to 20 – 40 cars per month (34 cars in June).

Luxury Cars:

• The C-Class outsells the BMW 3 series by a significant margin (103 versus 64). The 3 series has never found consistent favour with Indian premium customers, probably due to the lack of space (vis a vis C Class) and stiff ride quality. And perhaps, the lure of the three-pointed star is too hard to resist for first-time luxury car buyers.

• No surprises in the 40 – 50 lakh luxury segment. The 5 series sells twice as many cars as the Merc E-Class (107 versus 50). Note that the 6 series in included in this total, but we can presume it contributed 2 – 3 cars at best. Mercedes desperately needs the new E-Class. And fast!

• The stupendously handsome 7 series finally takes the fight to India’s favorite 1 crore sedan : Merc’s S Class. The 7 and the S sold an identical 40 cars each in June. 3 of those 7 series belong to BHPians . For the 7th month in a row in 2009, BMW has overall outsold Mercedes Benz.

[GTO]

MUVs & SUVs:

• Mahindra dominates the UV segment just as Maruti does hatchbacks. Consider this : M&M sold a total 13,087 of its ‘utes (including Xylos, Scorpios, Boleros, Commanders etc.). Tata in comparison found only 3,502 homes for its UVs (including the Sumo, Safari etc.).

• While the Innova sold an impressive 3,649 unit in June, there isn’t a doubt that the Xylo has sent a missile or two in Toyota’s direction. One only need to look at the Innova’s last year tally of 4,539 cars to tell the difference.

• Omni + Versa : 6,890 cars, nearly identical in the YOY performance (minus 1%). Expect this to only improve, when you consider the recent budgets advantages on "petrol" UVs.

• The Safari is up 48% MOM, but down by 16% YOY. Make no mistakes, each one of those 1,774 Safaris sold in June 2009 has made Tata a whole lot of money (12 year old platform, part sharing, depreciated machinery etc).

• Its heartening to see India’s only affordable 4x4 – The Maruti Gypsy – still selling 190 cars across India. Offroaders rejoice!

• Best selling premium SUV? The Mitsubishi Pajero at a June score of 163, followed by the Endeavour with 151 cars.

• BMW managed to sell an impressive 78 X3s & X5s (combined). This is 3 times the volumes from last year. Clearly, premium car buyers are looking at SUVs, maybe for the image, or for their high stance advantages. The M-Class, in comparison, sold a mere 7 examples last month.

• Force Motors is performing miserably in the UV market. A total of 460 Trax & Travellers sold in June, 25% down YOY.

• Honda CRV + Suzuki Grand Vitara = ZERO. Is Hyundai still selling the Tucson? Stats show 3 sold. ICML seems to have encountered logistical issues, 0 Rhino’s sold.

[CarsPG]

Thank you! Excellent report. I think a lot of Civic buyers are looking at the Altis as a better VFM proposition. But if the Civic is available at a discount of up to Rs. 1.5 Lacs for some corporates I think July will tell a different tale.

Will be interested to see where the GP settles in a couple of months. Both the Linea/GP are tremendous VFM. If Tata can improve the A.S.S. experience and get the word out I think their sales will increase considerably.

As far as the Spark is concerned I think the GM news has impacted it a little bit. But the PR mechanism of GM is amazing. All the dealers have been given a spiel of what to tell customers when they talk about GM's bankruptcy. Also the dealers are trying extremely hard to push sales.

[pradster]

Good to see great numbers from FIAT, after skoda they have now overtaken Ford in the market share rankings!

My feeling is that they'll do a lot better if they advertise their wares properly, they seem to be banking on word of mouth publicity way too much.

Does anyone have ad spend numbers for the various automakers to let us analyze if ad spends translate into sales?

And TATA does need those profits from the Indica and the Vista considering the fact that they have been bleeding money at JLR.

Any figures from the JLR launch?

[rajneeesh]

Originally Posted by GTO

C Segment sedan:

• Class-topper Dzire leads with 6,100 cars moved off showroom floors. YOY up 5%, MOM minus 10%. Classic story of the average student leading the pack. The Dzire really doesn’t score highly on any one particular area, yet a Maruti diesel well-priced sedan provides enough value for the market.

Does 6100 for MSIL iclude SX4 or is it purely for Dzire? If not what were the figures for SX4?

[CarsPG]

I think the 6,100 includes the SX4

[tsk1979]

There is currently a vaccum in the 12-20L SUV market.
The affordable SUV(s) with appeal and image are Tata Safari and Mahindra Scorpio.
For a buyer looking for something better its straight jump to 16L with the GV (petrol) or all the way to Endeavor around 20L.
If Maruti can start assembling GV here, and sell it for 11-12L in petrol version, the sales will definitely jump.
People looking for premium SUV will be willing to pay an extra 2L for honda badge, but not an extra 8L.
This is a market where there exists a vaccum since so many years.
Currently we have sedans and hatches to cover all tastes and budgets, but in the SUV segment, either you are 8-10L kind of customer or a 16L+ kind of customer.
People with 12-14L to spend only have the tucson and that too old stock clearance.

Another vaccum exists in the affordable 4x4 category.
MUL can work on the Gypsy, give coil springs and plonk in the multijet and some decent seats with AC and Power steering, and they will have a comfortable extremely capable offroader for 7L
This will be very popular with Bolero and UV customers not to mention off roaders! Many shy away from the gypsy due to lack of comfort and the petrol engine!

[Spitfire]

One of the most eagerly awaited topics. Precise and clear.

Thanks GTO and Vasudeva. Appreciate the effort

[GTO]

Apologies. Post has been corrected.

[rupinder]

Originally Posted by tsk1979

There is currently a vaccum in the 12-20L SUV market.
The affordable SUV(s) with appeal and image are Tata Safari and Mahindra Scorpio.
For a buyer looking for something better its straight jump to 16L with the GV (petrol) or all the way to Endeavor around 20L.
If Maruti can start assembling GV here, and sell it for 11-12L in petrol version, the sales will definitely jump.
People looking for premium SUV will be willing to pay an extra 2L for honda badge, but not an extra 8L.
This is a market where there exists a vaccum since so many years.
Currently we have sedans and hatches to cover all tastes and budgets, but in the SUV segment, either you are 8-10L kind of customer or a 16L+ kind of customer.
People with 12-14L to spend only have the tucson and that too old stock clearance.

Another vaccum exists in the affordable 4x4 category.
MUL can work on the Gypsy, give coil springs and plonk in the multijet and some decent seats with AC and Power steering, and they will have a comfortable extremely capable offroader for 7L
This will be very popular with Bolero and UV customers not to mention off roaders! Many shy away from the gypsy due to lack of comfort and the petrol engine!

tanveer sir i am also eyeing this 10-13 lac suv segment and and i am keeping an eye for the skoda yeti which as the grapevine goes will be released at auto expo 2010 and if starting petrol 1.2 tsi front wheel drive is priced at some where near 10 lac .i will be game for the 2.0 diesel 4*4.

the figures are along expected lines hope to see fiat at 5th position in overall sales

[vasudeva]

Posting the June 2009 sales here

[amit]

Regarding the City sales, I think many people waited for the Jazz and hence the lower numbers. Many of them probably went in for the Jazz due to the new car euphoria. Next month should be interesting. If City numbers creep up and Jazz goes down then probably people would be preferring to spend a bit more and get a sedan rather then a expensive hatch. Honda's July numbers should be interesting.

Good to see great numbers from FIAT, after skoda they have now overtaken Ford in the market share rankings!

My feeling is that they'll do a lot better if they advertise their wares properly, they seem to be banking on word of mouth publicity way too much.

I agree. It's time for full page newspaper adverts shouting about them being the fastest growing car manufacturer in India - they wouldn't be lying either!

I am sure many potential Linea and GP sales are still being lost due to low customer confidence in the Fiat brand. If they scream about their 350% Y-O-Y sales growth maybe at least 50% of the lost sales would be retained by them. Fiat is still being lethargic about marketing their company and products. When will they learn?!