Lower sales posted by older car models in 2011

Volkswagen Group Sales India Pvt. Ltd and Ford India Pvt. Ltd introduced new hatchbacks by gained market share at the expense of old favourites in 2011 as buyers laid greater store by design and features, pointing to a shift in consumer preferences.

Models like the Maruti Suzuki India Ltd’s new WagonR and Ritz, Hyundai Motor India Ltd’s new i10, and Tata Motors Ltd’s Indica showed decline in sales last year compared with the previous year, data from industry lobby Society of Indian Automobile Manufacturers (Siam) shows. Ford’s Figo, Volkswagen’s Polo and General Motors India Pvt. Ltd’s Beat that compete with the Ritz and i10 notched up higher sales.
Last year from January to December, sales of the Polo doubled from 2010, while sales of the Ritz fell 4.5% in the same period. Figo became one of India’s top 10 best-selling cars last year, with a sales increase of 24% over 2010.
To be sure, Maruti Suzuki and Hyundai Motor models still remained in the top three. Maruti’s Alto maintained its position as India’s top selling car followed by the WagonR, which displaced Hyundai’s i10 as the No. 2, despite sales falling at least 6%. The i10 posted a bigger sales drop of 13%, bringing it down to third position.
The effect of a low sales base in 2010 partly explains the performance of the relative newcomers, which also benefited from customer demand for their diesel versions in the face of increasing petrol prices. Yet, the sales trend also points to a change in consumer preferences.
“These new models were launched between April and June in 2010,” says Pradeep Saxena, executive director of TNS Automotive, a marketing research firm. “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.”
Following the other changes in 2011, Hyundai’s i20 climbed two positions to the seventh place; its Santro fell two spots to the ninth. For the first time, the Ritz did not feature among the top 10 in a year Maruti Suzuki’s production was hurt by labour trouble.
“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,” said Sugato Sen, senior director at Siam. “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.”
Although fuel efficiency is still the most influential factor in shaping consumer choice in Asia’s third largest automobile market, car makers are focusing a lot more on designing models for changing Indian preferences.

“We have noticed that a lot of first-time buyers are skipping entry-level cars and buying slightly bigger cars,” said Shashank Srivastava, chief general manager (marketing and sales), Maruti Suzuki. “This means these buyers are looking for more features and a good-looking car.”
The Ford India says that over 60% of its Figo buyers are first-time buyers. Ford Figo is an A2 segment car, which is positioned just above entry-level cars such as the Alto.

“With income levels going up, average age of buyers has come down. They have become more and more experimental,” said Srivastava. “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.”

The change in consumers’ mindset has started having an impact on other automobile segments as well. The new Verna sedan launched by Hyundai is an example. The previous generation of the Verna had failed to excite customers, but with a new design, the car has been a best-seller in its segment.Automobile News