Best seller
Tata Engineering is rightfully thrilled that its Indica topped
the sales chart in September to emerge as the best-selling car in
its class. But a bigger achievement that it hasn’t trumpeted
is the fact that the Indica became the second best- selling vehicle
in the entire Indian market. That includes vans and utility vehicles.
Tata has also managed to rattle market leader Maruti, by outselling
all its models except for the indomitable 800.
The significance is that Tata, with its home-grown Indica, is more
successful than all the global makers in India. Products from giants
like GM, Ford, DaimlerChrysler, Honda and even Toyota have not been
able to appeal to the Indian car buyer in the same way.
True, most of these biggies don’t have a small, affordable
car in their stable but who’s stopping them from developing
one? Why can’t they, for a change, give cars that 90 percent
of the car-buying public can afford? Companies like Ford, GM and
Honda have from time to time made noises about bringing in a small
car, but the fact is that they just can’t match the economics
of local producers like Maruti and Tata.
The quality and technology the multinationals offer don’t
hold the same attraction here as in developed markets. For years,
Tata has been at the bottom of the heap in J.D. Power’s quality
studies, whilst the Ford Escort topped it. The Escort is now dead
and buried and the Indica has gone from strength to strength.
The point here is that Indian consumers don’t want to pay
a premium for the best of quality but are happy with an acceptable
level of it. Which is what the Indica V2 has managed to achieve.
It still may lack refinement and have rough edges but the unscheduled
visits to the garage have stopped and that’s what matters.
Convinced that reliability issues are now a thing of the past,
the V2 has clicked with customers and is selling like hot cakes
whilst its rivals are floundering in a market that is in dire straits.
Tata’s success should also give it cause for worry. Global
car makers have realised that the Indica’s template of a large,
yet affordable car is the key to large volumes in India. The Fiat
Palio has been launched with a bang, Maruti is all set to fight
back with bigger models and Toyota is quietly working on its Yaris-based
B-segment car for India. These companies have the resources and
will to out-Indica the Indica just to get a strong foothold in this
market.
When the Indica was launched over three years ago, many subscribed
to the skeptical view that Tata just didn’t have what it took
to jump into the car market against global competition. I was one
of those disbelievers but am glad to have so far been proved completely
wrong.
SALES TWIST
When is a van not a van but a car and also a utility vehicle? When
you analyse the monthly vehicle sales figures. For example, the
Maruti Omni is classified as a car and Mahindra’s Voyager van
as a utility vehicle. Without any proper segmentation or classification
to follow, it’s a free for all and it’s difficult to track
market trends.
Auto companies categorise their products in a way that suits them.
By including Omni sales in the passenger car sector, Maruti’s
car market share goes up. Mahindra & Mahindra chooses to club
the Voyager with its utility vehicles to mask the fact that it hardly
sells. The problem is that the Society of Indian Auto Manufacturers
(SIAM) uses broad classifications like passenger cars and multi-utility
vehicles with no sub-segments clearly defined.
With more and more models being launched, the time is right to
lay down proper and detailed segmentation of cars based on internationally
accepted norms. Typically these are based on the market usage and
application of the products. Hence there should be separate categories
for vans, pick-ups and even SUVs. Even the passenger car sector
should be broken down into segments based on size and price.
The main problem is that manufacturers are not obliged to give
the SIAM model-wise break-ups. We manage to get these figures from
unofficial sources and this is the only way we can tell who the
winners and losers are in the sales war.
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