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India October 2014: Maruti Ciaz takes off to Top 10!

November 11th, 2014 No comments

Maruti Ciaz India October 2014. Picture courtesy of zigwheels.com2For its 2nd month in market the Maruti Ciaz breaks into the Indian Top 10.

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

The Dusshera and Diwali festivals is traditionally an auspicious season a lot of car buyers wait until to make their purchase. Not this year. The Indian car market is down 5% year-on-year to 216,808 registrations, however the year-to-date total is still in positive land at 2,097,750 units, up 2% on 2013. Out of the Top 14 manufacturers in the country, only Maruti (+1%), Hyundai (+6%), Honda (+18%) and Fiat (+13%) gain ground year-on-year, with the other 10 in the red including Skoda (-40%), Nissan (-43%) and Chevrolet (-47%).

Last week, the zero stars scored by both the Maruti Swift and Datsun Go at the Global NCAP crash tests made the news and prompted Global NCAP Max Mosley to publicly ask Carlos Ghosn to withdraw the Datsun Go from the Indian market! Max Mosley also said: “India has the potential to be a world leader in the automobile industry, but Indian consumers are not aware of how unsafe they are in case of a crash. We are pleased that India is launching an NCAP consumer testing programme. If this happens, every new car sold in India would have a proper crash structure and airbags.” See the harrowing crash tests above. It will be interesting to see how much impact these horrendous results will have on Indian sales. For now the Maruti Swift is down 31% on September to #4 as consumers await the refreshed model and the Datsun Go is back up 33% to a still tiny 1,354 units and 0.6% share vs. 1,654 for the Tana Nano.

Tata Zest India October 2014. Picture courtesy of motoroids.comFirst Top 20 ranking for the Tata Zest at home.

The Maruti Alto tops the Indian models sales charts for the 10th time in the past 12 months thanks to 21,443 sales and just under 10% share, while the Swift DZire is very robust once again at 17,950 units and 8.3%, cementing its #2 YTD rank. The Maruti Wagon R benefits from the weak performance of the Swift to climb to #3, the Mahindra Bolero is up one spot to #5 and the Hyundai Elite i20 is the brand’s best-seller in India for the 2nd straight month at #6 ahead of the Grand i10 at #7 and the Eon at #8. The big news in the models ranking this month however is the amazing 9th spot of the all-new Maruti Ciaz. It sold 1,375 units in September for its first month but wasn’t reported at the time, and now surges to 6,345 sales in October!

Maruti Ciaz India October 2014. Picture courtesy of zigwheels.comMaruti Ciaz

This is Maruti’s first entry in the compact sedan category and the Ciaz already smashes all its competitors, including the Honda City at which it is squarely aimed: the City ranks 13th with 5,124 sales this month, with all other competitors in the segment way below: the Hyundai Verna is #31 at 2,248 units, the VW Vento is #37 with 1,533 sales and the Skoda Rapid is #43 at 1,047 units. Another newcomer that is worth following carefully is the small sedan Tata Zest on whose slim shoulders rest the future of the brand, no less. The Zest breaks into the Indian Top 20 for the first time in October at #20 with sales up 6% on last month to a best-ever but still relatively shy 3,524 units.

Previous month: India September 2014: Hyundai Elite i20 up to 5th place

One year ago: India October 2013: Hyundai Grand i10 & Honda Amaze beat records, Nissan Terrano lands

Full October 2014 Top 60 models and 14 brands Ranking Tables below.

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Categories: India

India September 2014: Hyundai Elite i20 up to 5th place

October 9th, 2014 No comments

Hyundai Elite i20 India September 2014. Picture courtesy of rushlane.comHyundai Elite i20

* See the Top 60 best-selling models by clicking on the title! *

New car sales in India remain in positive territory for the third straight month in September at +5% to 217,050 registrations, which brings the year-to-date total to 1,879,487 units, up 2% on 2013. I give you the models ranking for now, brands sales charts will follow as soon as they get published. Below a Top 4 identical to the year-to-date ladder (Maruti Alto, Swift DZire, Swift and Wagon R), we have yet another tremendously successful launch from Korean manufacturer Hyundai: after the Grand i10 one year ago, the Elite i20 jumps 34% and 5 spots on August to rank 5th with 8,903 sales. This is the i20 nameplate’s strongest volume since October 2012 (9,058) and best ranking/market share since August 2012 (#4 and 4.5%). The Maruti Celerio lodges a third consecutive month inside the Top 10 at #10, the Tata Zest is up 25% to #21 and 3,331 sales for its 2nd month in market (still the brand’s best-seller) while the Tata Nano up 13 spots to #33 is back above the Datsun Go down 5 to #43.

Previous month: India August 2014: Hyundai Elite i20 up, Tata Zest lands

One year ago: India September 2013: Hyundai Grand i10 already up to #6

Full September 2014 Top 60 models Ranking Table below.

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Categories: India

India August 2014: Hyundai Elite i20 up, Tata Zest lands

September 8th, 2014 No comments

Hyundai Elite i20 India August 2014. Picture courtesy of mid-day.comThe Hyundai Elite i20 has revitalised the i20 nameplate in India.

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

Second month of euphoric news for the Indian new car market: after gaining 10% in July, it improves by an even more satisfying 16% year-on-year in August to 209,006 registrations, lifting the year-to-date total to 1,662,437 units, up 2% on 2013. In the brands ranking, Maruti breaks a leg and gains 29% on August 2013 to a mammoth 47% market share, followed by Hyundai up 19% to 33,750 sales and 16.1% share. In third position, Honda has established itself as a blockbuster player over the past few months, up a huge 88% on August 2013 to reach 8% share, well above Mahindra at #4 and 6.4% (-16%)… There are no other gainers inside the Top 10, the next brands in positive territory are Nissan up 16% to #11 and Fiat up 12% to #13.

Honda Amaze India August 2014. Picture courtesy of motortrivia.comNew to the Indian Top 5: the Honda Amaze (Thai model pictured).

Model-wise, the Maruti Alto reclaims the pole position it holds year-to-date off the Maruti Swift DZire thanks to 21,553 sales and 10.3% vs. 19,129 and 9.2% with the Maruti Swift and Wagon R stable at #3 and #4 respectively. The Honda Amaze shoots up 11 spots on July to break into the Indian Top 5 for the very first time at #5 with 9,198 sales, its 2nd best monthly volume in the country below the 9,564 units it sold in October 2013, also earning it a market share record at 4.4%. The Hyundai Eon is back above the Grand i10 at #7 while the Maruti Celerio lodges a 2nd consecutive month inside the Top 10 at 6,656 sales, its 2nd best monthly volume below the 7,323 units reached last February.

Honda Mobilio India August 2014. Picture courtesy of autox.inThe Honda Mobilio is already knocking on the Indian Top 10’s door this month.

Rounding up the August Top 10 with 6,627 units is the Hyundai Elite i20, the 2nd generation of the model it replaces in the ranking, up 22 spots on July. The Elite i20 delivers the i20 nameplate’s first Top 10 ranking since September 2013, its strongest volume since March 2013 and best share since February 2013. Another very successful recent launch is the Honda Mobilio, up 7 spots on July which marked its very first appearance in the Indian ranking, hitting an outstanding 11th place with 5,530 sales and 2.6%, a 64% improvement on last month.

Tata Zest India August 2014. Picture courtesy of rediff.comCapital launch for Tata: the Zest.

An extremely important launch occurred in India on August 12: the Tata Zest. On this model and its hatchback variant (the Bolt which will pop up later in the year) rest the brand’s future at home, no less. So far so good: the Zest lands at #24 with 2,671 sales – already Tata’s best-seller above the Indica (#25) and Indigo Manza (#26). Recent reports announce 10,000 bookings for the model and Tata has put their money where their mouth is for this brand-new nameplate: a revamp of dealerships, a new 3+3+3 program (free 3 years warranty + 3 yrs maintenance + 3 yrs Roadside Assistance), features/claims overload including “cheapest diesel automatic” and attractive price. The next few months will be crucial to establish this car aimed at the Maruti Swift DZire and Honda Amaze.

Fiat Punto Evo India August 2014. Picture courtesy of zigwheels.comLeft to die at home in Italy but facelifted in India: the Fiat Punto Evo.

Finally, a very interesting development which demonstrates the importance of the BRIC (Brazil-Russia-India-China) markets nowadays in the automotive world. Destined to die and left agonising without any design tweaks at home in Italy even though it topped the sales charts for 18 consecutive years between 1994 and 2011, the Fiat Punto just enjoyed a facelift and name refresh (to Punto Evo) in… India where Fiat struggles to get past 0.5% market share – it did so only twice in the past 12 months! Result: Punto sales are up 78% on July to 985 sales, granted still very shy but earning it a #40 spot, its highest since January.

Previous month: India July 2014: Is the Datsun Go a flop?

One year ago: India August 2013: Honda Amaze continues to amaze: up to #7

Full August 2014 Top 60 models and Top 14 brands Ranking Tables below.

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Categories: India

India July 2014: Is the Datsun Go a flop?

August 7th, 2014 No comments

Datsun Go India July 2014. Picture courtesy of livemint.comOnly 800 Datsun Go found a buyer in July.

* See the Top 60 best-selling models by clicking on the title! *

Great news coming from India: after two years of wobbliness, new car sales seem to finally be out of trouble: up a very satisfying 10% year-on-year in July to 194,042 registrations (temporary figures), lifting the year-to-date total back into positive at 1,453,321 units, up 0.5% on 2013. Last month I announced that if the Datsun Go, the most important launch of the year in India, fell below 1,000 monthly sales there would be reason to worry. Well this is exactly what just happened in July. After debuting at 2,068 units in March, gaining 30% to 2,690 in April, then dropping 26% in May and 45% in June, the Go is down a further 27% to a poor 800 units and out of the Top 40 in July, even falling below the notoriously unsuccessful Tata Nano (875 sales at #39). For more on the relevance of the Datsun Go in India check out Strategy: Understanding the Indian car market.

Datsun Go India July 2014. Picture courtesy of gaadi.comClouds are piling up for the Datsun Go in India…

On the Go’s shoulders rest Carlos Ghosn’s hope of creating a budget brand in India by resurrecting the Datsun logo. Although no sales objectives were communicated at launch, 800 units for its 6th month in market, while sales should be growing exponentially as punters get used to the new brand and word-of-mouth spreads, is surely not what Renault-Nissan had in mind for the Go in India. These figures are not end-consumer sales but factory sales to dealerships, however a declining trend indicates that dealers are not re-ordering any new cars and struggling to sell the ones they have as stock piles up. It is too early to be too formal about the Go’s success or lack-thereof, but sales do need to reverse back up fast or the Go will be remembered as another failed attempt at selling low-cost to Indian consumers after the Nano. And I don’t see how much traction one can get from just 800 monthly units. So my answer to “Is the Datsun Go a flop in India”?
So far, sadly yes.

Honda City India July 2014. Picture courtesy of indiaautosblog.comThe Honda City breaks into the monthly Indian Top 5 for the first time this month.

But wait there’s more action in the Indian models sales charts in July: the Maruti Swift DZire astonishingly takes the lead for only the third time ever after May 2013 and May 2014 thanks to 18,634 sales and 9.7% share, kicking the Maruti Alto down to 2nd place at 16,997 units and 8.8%. The Alto is still however #1 year-to-date by far at 155,145 sales vs. 124,407 for the Dzire. Another significant event inside the Top 5: the arrival of the Honda City for the very first time in the nameplate’s career in 5th place (previous best: #7 reached last March) with 7,697 sales and 4% and best-selling non-Maruti in the country this month. Notice also the Hyundai Xcent very solid again at #8, the Maruti Celerio back up 5 spots to #9 and the Honda Mobilio landing directly at #18 with 3,365 sales and 1.7% share for its very first month in market.

Previous month: India June 2014: Maruti Wagon R up to 2nd place

One year ago: India July 2013: Ford Ecosport breaks into Top 10

Full July 2014 Top 60 models Ranking Table below.

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Categories: India

India June 2014: Maruti Wagon R up to second place

July 10th, 2014 2 comments

Suzuki Wagon R India June 2014. Picture courtesy of gaadi.comMaruti Wagon R

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

Is this the rebound everyone had been waiting for? After gaining ground for the first time in almost a year last month, in June new car sales in India are up a splendid 13% year-on-year to 212,734 registrations (temporary figures), which brings the year-to-date total to 1,259,109 units, now down just 0.8% on 2013. If this return of fortune confirms itself it is great news for the world car market as India is one of the biggest potential engines of growth for the next two decades. After dropping to a paltry third place in May for the first time in one decade, the Maruti Alto is back in charge this month with 30,499 sales and 14.3% share, which are no less than the nameplate’s strongest volume since March 2012 and highest market share in at least 3 years!

Hyundai Xcent India June 2014. Picture courtesy of motorbeam.comHyundai Xcent

Up two spots on May to 2nd place, the Maruti Wagon R delivers an outstanding 17,119 sales for a best-ever 8% market share and hits its highest ranking since September 2012. Leaders last month, the Suzuki Swift Dzire (15,990 units) and Swift (13,632) are knocked down to #3 and #4 respectively but its June score enables the Swift Dzire to overtake its hatchback twin year-to-date to rank #2 with 105,773 sales vs. 104,872. The Hyundai Grand i10 (#6), Honda City (#7), Amaze (#8) and Hyundai Xcent (#9) all confirm they are now established as blockbusters in India.

Datsun Go India June 2014. Picture courtesy of intoday.inHave we seen all the Datsun Go has to offer sales-wise already?

Now onto one of the (/the?) most important launches of the year in India: the Datsun Go. After debuting at 2,068 sales and #31 in March and growing to 2,690 and #22 in April (then totalling more than the entire Nissan range!), the Go has since lost quite a lot of ground: down 26% to 1,992 units and #28 in May and now down a further 45% to just 1,097 sales and #37 in June, by far its weakest result to date. The Go is now only marginally stronger than the Tata Nano (#40 at 1,001 units), widely considered as one of the biggest automotive flops of the past decade. Does this mean the Go is headed towards the same fate? Not just yet. Indian figures correspond to factory sales to dealerships (not end consumers) so the current evolution looks like the first factory batch is being used up. July-August figures should be much higher. If not and we see the Go fall below 1,000 monthly sales, then there will be reason to worry.

Previous month: India May 2014: Maruti Swift DZire and Swift lead, Alto down to #3

One year ago: India June 2013: Locally produced Ford Ecosport lands at #15

Full June 2014 Top 60 models and Top 14 brands Ranking Tables below.

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Categories: India

India May 2014: Maruti DZire and Swift lead, Alto down to #3 for first time in one decade!

June 11th, 2014 5 comments

Maruti Swift DZire India May 2014. Picture courtesy of indianautosblog.comMaruti Swift DZire

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

For the first time since last August, the Indian new car market gains ground year-on-year: up 5% 202,659 registrations, bringing the year-to-date total to 1,046,375 units, down 3% on 2013. Big events atop the models sales charts: first, the Suzuki Swift DZire is the most popular vehicle in the country for only the second time ever after May 2013 thanks to 18,953 sales and 9.4% share. This is only the third month in the past 119 that the Alto is not India’s best-seller, the other one was in April 2012 when the Maruti Swift took the lead. Second, the Maruti Swift also outsells the traditional leader, the Maruti Alto, at 17,936 units and 8.9% vs. 17,311 and 8.5%, kicking the Maruti Alto into third place for the first time since June 2004, exactly a decade ago…

Hyundai Xcent India May 2014. Picture courtesy of mid-day.comHyundai Xcent

Meanwhile the Maruti Wagon reclaims the 4th place it holds year-to-date off the Hyundai Grand i10 with 11,757 sales vs. 9,317 while the Mahindra Bolero remains 6th at 8,846 units. The Hyundai Xcent confirms its runaway hit status by gaining one further spot on April to a record #7 with 7,792 sales and 3.8%, overtaking the Honda City extremely strong once again at 3.6% share. The Maruti Celerio is down one rank to #11 but continues to impress, the Toyota Innova is above 5,000 sales for the first time since last October at a brilliant 12th place and the Datsun Go cools down at -26% on April to #28 and 1,992 sales, still Nissan’s best-seller however.

Datsun Go India May 2014. Picture courtesy of MotorBash.comDatsun Go

Further down: no improvement for the Tata Nano down 3 spots on last month to #38 with just above 1,000 sales, and the Toyota Corolla reappears in the ranking at #46 thanks to the new model now available in the country. Brand-wise, both Maruti (+16%) and Hyundai (+13%) defy the current doom and gloom and reinforce their domination, the latter delivering its highest monthly volume since March 2012. Mahindra rounds up the podium but drops by 23% while Honda and Toyota shine, both gaining 18% year-on-year. Notice also Ford up 51% and Nissan up 46%. Datsun is now #12 both in May and year-to-date with 6,750 sales so far this year.

Previous month: India April 2014: Hyundai Xcent instant hit, Datsun Go sells more than entire Nissan range

One year ago: India May 2013: Maruti DZire leads the ranking for the first time!

Full May 2014 Top 60 models and Top 14 brands Ranking Tables below.

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Categories: India

India April 2014: Hyundai Xcent instant hit, Datsun Go up 30%, sells more than entire Nissan range already

May 9th, 2014 5 comments

Hyundai Xcent India April 2014. Picture courtesy of IndianautosblogThe Xcent is already Hyundai’s 2nd best-selling model in India.

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

New car sales in India continue on their downward spiral at -8% year-on-year in April to 183,388 registrations. This brings the year-to-date total after 4 months to 843,716 units, down 5% on 2013. Is it the start of the Datsun Go-effect? The Maruti Alto has a particularly weak month in April at just 16,763 units, down 16% on April 2013, and as a result only owes its pole position for the month to a few hundred units more than the Swift Dzire (16,008) and Swift (15,874). The Hyundai Grand i10 manages to gain two spots on March to break into the Top 4 for the very first time thanks to 9,612 sales and 5.2% share, passing both the Maruti Wagon R and Mahindra Bolero.

Datsun Go India April 2014. Picture courtesy of motorbash.comThe Datsun Go already sells more than the entire Nissan range in India!

But the big event this month is the thunderous arrival inside the Top 10 of the all-new Hyundai Xcent, basically a sedan variant of the Grand i10: it is up a huge 25 ranks on March to land in 8th position with 6,663 sales and 3.6% share for its first full month in market. This already makes the Xcent Hyundai’s 2nd best-seller above the Eon (#9) and i20 (#16). Another very well executed market-exclusive launch for the Korean manufacturer, as the Xcent is only sold in India for now. In the Top 10, notice also the Honda City staying extremely strong at #7 and Maruti Celerio brilliantly climbing back to #10.

Honda City India April 2014. Picture courtesy of Yahoo IndiaThe Honda City stays extremely solid in 7th place.

The other model we are following with great interest since its first appearance in the Indian sales charts last month is the Datsun Go. The Go targets the Maruti Alto and of course cannot pretend at such a fast shoot up to the stars as the Hyundai Xcent just delivered, as it is actually launching a (kinda) new brand in the country and a new philosophy for the Renault-Alliance as I described in Strategy: Understanding the Indian car market. In this context, the 30% sales increase on March to 2,690 units and 9 spot-jump to #22 is very satisfying. Keeping in mind April is down 20% on March, we are looking at a seasonally corrected 40% month-on-month hike for Datsun’s baby. Symbolically, although the Go was below the Tata Nano last month (2,068 vs. 2,452), it sells nearly 3 times as much in April (2,690 vs. 1,027). Lastly and even more symbolically, this month the Datsun Go already sold more units than the entire Nissan range in India!

Previous month: India March 2014: Datsun Go and Hyundai Xcent land

One year ago: India April 2013: Maruti DZire threatens Alto for pole position!

Full April 2014 Top 60 models and Top 14 brands Ranking Tables below.

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Categories: India

India March 2014: Datsun Go and Hyundai Xcent land

April 10th, 2014 4 comments

Datsun Go India March 2014. Picture courtesy of What Car IndiaDatsun Go

* See the Top 60 best-selling models and Top 14 brands by clicking on the title! *

New car sales in India are down 5% year-on-year in March to 232,423 registrations (ex-Commercial Vehicles), bringing the First Quarter total to 660,328 units, down 4% on 2013. We have been waiting for this moment for almost a year, since Carlos Ghosn unveiled the Datsun Go in Delhi in July 2013. The first model in the relaunched Datsun brand is finally here: the Go lands at #31 in India this month for its very first appearance in the world with 2,068 sales, keeping in mind these are retail sales to dealerships. We will have to wait a few months to gauge the success or lack thereof of this all-new brand. More than just a model launch, it’s an entire new philosophy at play for the Renault-Nissan Group, as I described in Strategy: Understanding the Indian car market.

Hyundai XCent India March 2014. Picture courtesy of cardekho.comHyundai Xcent

Another very important model to launch this month in India is the Hyundai XCent, the sedan version of the extremely successful Hyundai Grand i10 – which just landed its 4th month above 10,000 monthly sales in March at 10,614. The Xcent appears at a more modest 33rd place with 1,716 sales for now. No doubt this ranking, as well as the Go’s, will improve drastically over the next couple of months and a Top 10 spot for both new entrants is definitely expected if we want to talk about successful launches here.

Mahindra Scorpio India March 2014Mahindra Scorpio

In other news, the Maruti Alto delivers a 7th month in a row above 20,000 monthly units at 25,590, the Mahindra Bolero hits its 2nd best monthly volume at 11,294 units (best is 11,675 in March 2013) while the Honda City smashes its sales record at 9,518 units in 7th place. The Honda Amaze is back inside the Top 10 at #9, the Maruti Celerio pauses its progression at #12 (-4) with 6,060 sales and the Mahindra Scorpio breaks its monthly record at 5,605 sales (previous best: 5,230 in October 2013), durably reclaiming the SUV crown off the Renault Duster and Ford Ecosport which is no mean feat.

Previous post: India February 2014: Update with Commercial Vehicle sales

Previous Strategy Post: Understanding the Indian car market

Photo Reports:  Delhi March 2014: Maruti Wagon R everywhere /Agra March 2014: Maruti Alto 800 king

Previous month: India February 2014: Maruti Celerio up to 7th place

One year ago:  India March 2013: Maruti DZire breaks record, Honda Amaze lands

Full March 2014 Top 60 models and Top 14 brands Ranking Tables below.

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Categories: India

India February 2014: Update with Commercial Vehicle sales

April 9th, 2014 1 comment

Tata Ace Zip India February 2014Tata Ace Zip

* See the Top 60 models and Top 25 brands by clicking on the title! *

Just before March figures come through, I thought I would give you a quick update on India as thanks to LMC Automotive I will now be able to share with you more complete data for this country including Commercial Vehicles (Light, Medium and Heavy). Overall, this means Indian car sales totalled 2.93 million units in 2013 (vs. 2.47 million passenger cars) which doesn’t change the country’s 2013 worldwide ranking. In February they are at 264,323 registrations (-6%) vs. 212,898 as counted previously. The year-to-date stands at 533,043 sales, down 7% on 2013.

Ashok Leyland Boss India February 2014Ashok Leyland Boss

Model-wise, we are notably adding the Tata Ace at a beautiful 7th place with 8,699 sales in February (-7%) and #6 with 18,611 year-to-date (+21%) and the Mahindra Bolero Pick-ups at #13 with 5,027 units in February (+26%) and 10,246 year-to-date (+34%). This is absolutely in line with my observations from last week in Delhi and Agra. Brand-wise, I now have a Full Top 25 for you. The excitement! We see that Tata is back up to #4 thanks to its core strength in Commercial Vehicles, Ashok Leyland up to #11, Force up to #13, Piaggio #19 and (new to me) Eicher #23. We can also now follow the premium race to the top with Audi (+34%) and BMW (+31%) catching up on Mercedes (+4%).

Previous Strategy Post: Understanding the Indian car market

Previous Photo Report: Agra – India March 2014 Photo Report: Maruti Alto 800 king

Previous post: India February 2014: Maruti Celerio up to 7th place

One year ago: India February 2013: Maruti DZire and Renault Duster hit records

Full February 2014 Top 60 models and Top 25 brands Ranking Tables below.

Read more…

Categories: India

STRATEGY: Understanding the Indian car market

April 7th, 2014 13 comments

Datsun Go India March 2014. Picture courtesy of What Car? IndiaThe Datsun Go starts at US$5,340. Only in India is such low pricing possible at the moment.

Staying in India for a couple of days has enabled me to get a much better understanding of the Indian new car market and its dynamics which have very unique characteristics. In fact, not only is India very different from any other new car market in the world, but its logic pre-empts that of many future developing markets, at the centre of which most of Africa. With the main notion to remember being ‘bottom-up innovation’ to achieve even lower selling prices, understanding India is essential in today’s worldwide automotive scene.

1. Why India matters

Ever wondered why so many India-exclusive new cars were unveiled at the Delhi Auto Show in February compared to the relative small size of its new car market (2.5 million units in 2013 vs. 20.9 million for China)? That’s because on top of the enormous growth potential, making and selling cars in India requires a very different set of skills. And the manufacturers that are getting good at it are taking a decisive advantage into succeeding in tomorrow’s developing markets, because they will know how to make cars so cheap they can sell at a profit even in Africa – which is, believe it or not, the new China (a much more detailed analysis of this last point will be published soon).

To be successful in India, cars need a price tag so much lower than in most other markets, that new thinking is needed. An Indian trademarked way of innovating that is adapted to local conditions, constraints and revenue levels. The ‘old ‘way of creating low-cost was to engineer down from more sophisticated products by cutting cost through tried-and-tested platforms and economies of scale. The new way is to engineer up from scratch a product that is game-changingly cheaper with a mix of bare bones elements and latest tech features. Example: the $100 laptop. This process has been dubbed ‘frugal engineering‘ (achieving more with fewer resources) by Carlos Ghosn, or ‘bottom-up innovation’.

Datsun Go What Car March 2014bNo radio and CD player in the Datsun Go

2. Bottom-up innovation at play

Indian manufacturer Tata was the first to bring bottom-up innovation to the car industry with the Nano, ‘the cheapest car in the world’ at US$1,700 when unveiled in 2009. The Nano turned a lot of carmaking conventions on their heads. It uses a modular design that theoretically enables a knowledgeable mechanic to assemble the car in a suitable workshop. It also includes numerous lighter components, from simple door handles and bulbs to the transmission and engine parts, enabling a more energy efficient engine. The Nano is one of the shortest four-passenger cars on the market, yet it allows for ample interior space. The fact that the Nano didn’t succeed doesn’t question this trend, as we’ll see below.

These ‘ultra-low cost’ cars can end up being more user-friendly, if sophisticated. One case in point that stroke me: the new Datsun Go does not have a radio or CD player (even optional), only an aux-in port and USB charging point, which means you can only listen to music stored on a portable device. On one hand I can hear you say “no radio? blasphemy!” After all, even Tata kept it optional on the Nano. On the other hand, most cars manufactured over 5 years ago don’t have these functionalities (even premium ones!), making listening to your favourite music without burning it on a CD impossible. See what I mean? All in all, for the target market, the Go driving experience as far as music is concerned is potentially more user-friendly for a fraction of the cost.

But just how low are car prices in India?

Renault Duster India March 2014What Car India says the Renault Duster ‘doesn’t feel premium enough’ for the price. Wait what?

3. Low cost is premium is low cost

Car prices are on a drastically different scale in India:  they are not just a little cheaper, but in a different ball game altogether.

This strategy analysis continues below.

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