Indian car makers rely on new launches to fight back sales slowdown
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Car manufacturers in the country are hopeful about their new launches, with a couple of them coinciding with the festive season, to generate decent sales figures. In the course of next 4-5 months the country will witness the launch of nearly a dozen of new cars. Notably, several of these new launches happen to be Utility Vehicles (UVs), the segment which has remained unperturbed even after the steep price hike of petrol and slow market growth.
This particular segment has reported a growth of 51 per cent with 79,643 units sold in the first two months of the current fiscal year (FY) as compared to last year. On the other hand, the passenger car segment marked an upward surge of just 3.10 per cent, with 3,31,580 cars sold in the same period. Customers seem to prefer diesel-run cars owing to the diesel rates being approximately Rs. 32 than that of petrol. More than 90 per cent of UVs sold in the market are diesel models, which is the reason behind the segment being the current favourite.
However, the price gap between a diesel-run car and a petrol-run car is around Rs. 1 lac. As per the reports by ICRA limited, the time required to break even the initial investment on a diesel car has come down to three years in 2012 from five years in 2008. Thus, most of the new launches happen to be diesel variants and the car makers are pinning their hopes on these cars to cash in on festive season starting August 2, 2012 with Rakshabandhan.
India's largest UV manufacturer, Mahindra & Mahindra (M&M) is all set to launch its mini Xylo and a compact model of its sedan Verito. The mini Xylo may make its début in July itself, however, the launch of the compact Verito is still a couple of months away. Chief Operating Officer (COO), Automotive Sector, M&M, Pravin Shah, said, “Any new model introduction expands the market as the novelty is welcomed by the customers.”
At the same time, seeing the overwhelming response received by Mahindra XUV 5OO and Maruti Suzuki Ertiga in the fast-expanding UV segment, Renault SpA is all set to launch its much-anticipated SUV, Duster, in July. Tata Motors too has been preparing its grounds to pose challenge to Toyota Kirloskar Motor India Private Limited and M&M in this segment. The company is ready to launch its new Safari Storme. According to a Mumbai-based dealer, Tata is expected to pull the covers off the new car in August. Suppliers anticipate that the car maker will offer the new Safari with a tweaked up powertrain delivering more power and better interiors. Tata Motors expects to sell 1,000 units of the new car every month initially.
Hyundai Motor India Limited (HMIL) is all set to launch the new Elantra, while General Motors India Private Limited is ready to roll out the new Chevrolet Cruze. Hyundai Elantra is expected to compete head on with Honda Civic, Volkswagen Jetta, Toyota Corolla Altis, Chevrolet Cruzeetc. According to the Director, Marketing and Sales, HMIL, Arvind Saxena, the new car will be launched in the country by this year end.
Facing low sales volumes due to lack of new launches, General Motors India too, is planning to launch Sail hatchback and sedan models by 2012 year end. The hatchback model will be pitted against Hyundai’s i20, Volkswagen’s Polo and Honda Siel Cars India’s Jazz and the sedan variant will compete with Hyundai Verna, Volkswagen Vento and Ford Fiesta.
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