In the Indian car market, only the early birds seem to find the worms. Sales data for financial year 2009-10 once again reflects the complete dominance of India’s ‘big three’ carmakers — Maruti, Tata Motors and Hyundai — with all but one of the top-10 bestsellers coming from their stables.
The results warrant a reality check for all manufacturers looking to enter India’s car market, as 2009-10 was also the year that saw the maximum number of new car launches from both established and new players.
The Maruti Alto held on to its numero uno position for the sixth consecutive year even as a Hyundai car came in second for the first time in three years.
Most of the small cars that were launched last year, however, came a cropper with only Maruti’s Ritz and Hyundai’s i20 hitting the bull’s eye. Experience shows that cars that have a sluggish start to sales in India are destined to be also-rans, and it is unlikely that Honda Jazz, Grande Punto or Skoda Fabia will ever clock brisk sales.
The Hyundai i10 sprang a surprise, climbing up three places to displace Maruti Wagon R from the second spot while Tata’s flagship model slipped further to the fifth spot from third in 2008-09. The i10 now has the fastest growing sales — a rate of over 40 per cent — among small cars, though it may have eaten into some of stablemate Santro’s share. The Santro was the only car in the top-10 to witness a decline in sales last year.
“The i10 is a very practical car and sets new benchmarks in performance in its segment,” said Arvind Saxena, director marketing and sales, Hyundai Motor India Ltd. “The Santro continues to do well and what it sold last year was much more than what many new cars sell, so there is no question of its discontinuation in the market.”
Winds of change
A flurry of new entrants in the small car space led by Chevrolet Beat, Ford Figo, Volkswagen Polo, Nissan Micra and Toyota Etios may however see widespread changes in the pecking order in 2010-11.
“The three companies have a definite first mover advantage and they also have a sound understanding of what the consumer wants,” said Abdul Majeed, leader automotive practice, PriceWater-HouseCoopers. “But the next two years are going to be very competitive with the number of small cars launches and I do expect many new entrants in this list.”
With five cars on the list, Maruti dominated sales followed by Hyundai and Tata with two each. Not surprising, considering that India continues to be predominantly a small car market, which is almost entirely captured by the three carmakers. In 2009-10, the small car segment accounted for over 78 per cent of total car sales and Maruti (56 per cent), Hyundai (24 per cent) and Tata (12 per cent) accounted for 92 per cent of that segment.
“India will continue to remain predominantly a small car market and despite the number of new cars on offer, Indian consumer is very value conscious,” said Mayank Pareek, executive officer sales and marketing, Maruti Suzuki India Ltd.
“Sales and service experience, maintenance costs and resale value are part of the package and we have a competitive advantage in that.”
For the last five years, Honda’s best selling sedan, City, despite its steep price tag, has been the only outsider in the top-10. So much so that the City easily outsells some of its cheaper rivals like Ford Fiesta, Hyundai Verna and Maruti SX4.
“The City is a segment defining model that has broken conventions in all parameters, whether it is styling, performance or fuel efficiency,” said Tatsuya Natsume, director marketing, Honda Siel Cars India.
There are some big movements in other segments as well. Toyota’s new sports utility vehicle Fortuner, which was launched in August last year, has literally stormed the segment selling more units in seven months than what all the other SUVs put together managed in 12. As many as 6,280 units of the Fortuner were sold last year followed by Ford Endeavour in a distant second slot with 2,597 units.
The premium car segment also got a new leader in Skoda Superb, which saw phenomenal growth in 2009-10. Skoda sold 3,170 units of the Superb against the mere 713 units it had sold in 2008-09, in the process breaking t1he stranglehold of Honda Accord, sales of which slid from 4,107 units in 2008-09 to 2,775 units in 2009-10.