Ever intensifying competition in the domestic automotive landscape, and an increasingly fickle consumer mood has set off an unprecedented game of musical chairs that may result in radical changes at the top of the pecking order.
At the heart of the battle, the traditional big three in the market are struggling to hold their dominant positions. The leader, Maruti, is not growing anymore, Hyundai is stagnating, and Tata Motors is fast fading away.
Maruti, which has grappled with labour unrest in the last two years, saw its share fall from 45% to less than 40% in this period. Tata, clearly in a crisis situation now, is left with less than 13% from 17% a couple of years ago.
And it is not Hyundai that has gained from this erosion, but utility vehicle maker Mahindra, which notched up double-digit marketshare for the first time.
Toyota has doubled its tally, and suddenly, there is a churn at the top order of the domestic automobile sales chart.
“The real surprise is the slip of Tata Motors,” said Pradeep Saxena, executive director, TNS Automotive. “Such a rapid decline is not seen often. This has opened up the game and while Mahindra has already made inroads, it is definitely in the realm of possibility that Toyota and Honda may cause major upsets in the next few years.”
Mahindra, Toyota and Honda have sniffed a chance and cranked up their volumes. The former is racing ahead slaking the increasing thirst for SUVs.
Toyota too is in this race. Waiting in the wings with a slew of new launches is Honda, finally ready with a whole portfolio of diesel cars ranging from Amaze to the City. A new cola war has hit the roads.
“Our focus remains on volume growth,” said Pawan Goenka, president (automotive sector), Mahindra and Mahindra. “We have grown primarily for two reasons — one: the core of our portfolio is UVs, and the UV segment has seen very good growth in the last 12 months.”
“Second: we did not slow down investment at the time of industry slowdown in 2008-2009. This allowed us to be ready with two new vehicles — Quanto and XUV — which have given us fresh volumes without cannibalising existing products.”
The top three are also gearing up for the fight, but it may not be easy for them. Maruti has time and again stressed its desire to get back to the 50% marketshare, and has expanded its utility vehicle portfolio with the Ertiga last year.
“Maruti remains the company that best understands the Indian market, but unless they do something radical, there is a chance their marketshare will fall further even as they continue to grow,” said Saxena of TNS Auto.
Tata faces the biggest challenge. It says it wants to be a strong number 2 player and harbours ambitions of becoming the market leader some day.
Ditto for Hyundai, which has commissioned a new diesel engine plant in the India to give it more flexibility to launch new cars.
“We plan to launch a new car every year for the next three years and aspire to be a top performer on volumes and be a market leader in product introduction and innovation,” said Rakesh Srivastava, vice-president, sales and marketing, Hyundai Motor India Ltd.
“We are the only manufacturer that has continuously grown in the last 15 years and are confident of increasing our current tally steadily.”
The next few years will decide whether the wannabes can establish a new order. Or will it still be the old guard that will hold firm.