The Indian passenger car market is going through a paradigm shift in terms of customer preferences, with relative newcomers gaining traction at the expense of established market leaders. Manufacturers like Volkswagen (VW), Chevrolet and Ford have been able to increase their market shares while Maruti Suzuki and Hyundai have lost customers to them. These new entrants were able to sell more cars in India due to factors like aesthetic designs, attractive features and increasing popularity of diesel models.
According to the data provided by the Society of Indian Automobile Manufacturers (SIAM), models like Maruti Suzuki WagonR and Ritz, Hyundai i10 and Tata Indica were sold in fewer numbers in 2011 as compared to the previous year. On Year-over-Year (YoY) basis, more units of Ford Figo, VW Polo and Chevrolet Beat, which compete with the likes of i10 and Ritz, were sold in the country last year.
The total units of VW Polo sold between January and December 2011 were twice the number sold during the same period in the previous year. On the other hand, Ritz's sales volumes fell by 4.5 per cent last year against its sales figures in 2010. Ford Figo enjoyed resounding success in 2011, with 24 per cent increase in sales over 2010, earning itself a position amongst the 10 top selling cars of the year. However, models by Maruti Suzuki and Hyundai still retained the top 3 positions in the same list despite losses in sales volumes.
Maruti Alto maintained its position of being the highest selling car in 2011 as well. On the other hand, its sibling WagonR exchanged places with i10 to become the second highest selling passenger vehicle of the year in spite of 6 per cent lesser sales as compared to 2010. Hyundai i10's sales figures went down by 13 per cent on YoY basis, making it the third highest selling model of the year in the passenger vehicle segment. In 2011, Hyundai i20 moved up two places to attain the seventh place in this list, while its sibling Santro lost two spots and landed up on the ninth position. Maruti Suzuki Ritz took the biggest hit last year because of labour trouble at the company's manufacturing plant and could not make it to the ‘top selling cars’ list.
The cars gaining market share in 2011 had a very small sales base in the previous year as compared to models that were launched before 2010. However, it is still a small factor, considering that the consumers are opting for feature-rich, fuel efficient diesel models.
Executive Director of TNS Automotive, a marketing research firm, Pradeep Saxena, commented, “These new models were launched between April and June in 2010. So they are bound to have a low base and there cannot be a like-to-like comparison with older models. Having said that, there is no doubt that these models stand out in terms of what they offer to customers.”
As per Sugato Sen, the Senior Director at SIAM, “Lack of diesel options may have affected the sales of popular models and you have to take into account that Maruti’s production was also impacted due to industrial relations. The new companies are betting big on their design and innovative features. That’s their USP (unique selling proposition). In the coming years, we will see a lot more focus on these two aspects than ever.”
Though mileage remains the biggest factor for customers while buying cars in this booming auto market, car manufacturers are giving due importance to look as well. Most of the prominent auto makers operating in India are developing cars that suit the changing preference of the masses. Shashank Srivastava, Chief General Manager (Marketing and Sales), Maruti Suzuki, corroborated, saying “We have noticed that a lot of first-time buyers are skipping entry-level cars and buying slightly bigger cars. This means these buyers are looking for more features and a good-looking car.” Incidentally, Ford India has reported that more than 60 per cent of the people who ordered Figo were first-time buyers. The model belongs to the A2 segment and is placed just above the likes of Maruti Suzuki Alto and Hyundai Eon.
Srivastava also said, “With income levels going up, average age of buyers has come down. They have become more and more experimental. This is not only evident in the purchase of cars but other gadgets like mobile phone, laptops, etc. Emphasis on design has been a global phenomenon so far, which is trickling down to India.”
