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Four Models Ride Popularity Wave To Beat Recession
When markets are down, and demands are slow to come by, it is natural to assume that in India cars will be the last products that people will go for. But that is exactly what is happening in Indian car industry. At least four car models have been able to beat recession blues, while riding on their popularity.
The passenger vehicle market may be slowing, popular manufacturers continue to have long lists of demands for some of their models. These models include the Maruti Suzuki’s Swift hatch and Swift Dzire, Mahindra and Mahindra Xylo MUV and Hyundai i20 hatchback. The manufacturers are struggling to meet the rising demand.
Maruti Suzuki Dzire, the sedan version of popular Swift hatchback, was launched in March 2008. Even today, the waiting period for delivery ranges from 3-4 months. The demand for diesel variant of Swift Dzire Sedan is higher amongst all models. The diesel variants costs Rs 5.47 lakh and the petrol variants costs Rs 4.61 lakh, ex-showroom Delhi. About 65 percent of the Swift Dzire sedan is for the diesel variant. Despite its higher selling price, people are ready to buy them, considering their low maintenance and running costs.
Talking about it to the media representatives, Chairman of Maruti Suzuki, Mr. RC Bhargava said “it is difficult to increase production of models with a higher demand, now. Initially, there were paucity of engines which are sourced from Suzuki Motors Corporation, Japan, but by the time that problem was overcome, the demand increased.”
The company initially produced 3,000 Dzire sedans a month, but scaled it up to 7,000 units when bookings poured in. Currently, the bookings have crossed 10,000 units a month. The demand is far ahead of the production capacity. The tremendous success of Swift hatchback prompted Maruti Suzuki to launch the sedan version and Dzire sedan has exceeded its predictions.
The Swift hatchback has a waiting period of over three months in most states in India. The fuel efficient diesel variant earns the top position in demand. The company is currently rolling out 9,000 units a month but bookings per month are in the range of 11,000 units.
The executive officer (sales and marketing) Mr Mayank Pareek says that any car that meets all the aspirational needs of a buyer will continue to see a healthy growth in demand, even in downturn.
Even, Mahindra and Mahindra are facing similar hitches. Mahindra Xylo the MUV that was launched in January 2009, has a waiting period of over two months. M&M raised prices by Rs 10,000 to Rs 12,000 about a month ago, but sales have continued to be aggressive. An unprecedented demand had forced Mahindra to raise daily capacity from 120 units to 130 -135 units. Currently, the base model of Xylo costs Rs 6.48 lakh.
The second largest car manufacturer, Hyundai Motors has had a successful run with small i10. The next in I-series i20 hatch, which is considered expensive for its segment, is also attracting huge demand. The base model Hyundai i20 starts Rs 4.79 lakh. However, bookings seem to be piling up, as now they range from 2,000 to 2,200 units per month.
A Hyundai senior executive said “Initially we had a waiting period of two months. We had to increase production to bring it down to 45 days, after demand increased. However, the response was not anticipated for a car that is costlier than other models in its category.” Hyundai is able to meet 1,500 units a month by sparing capacities meant for other models.”
Analysts have also noted that luxury car market is seeing an unprecedented growth. More than Apart frm these, the luxury car market
The unwaning demand for some models, defeats the theory of slowdown. Other models like, Chevrolet, Mitsubishi, Honda, Volkswagen are all facing a negative growth rate. While these signs are dangerous to the auto industry in India, the four models help haul them high. In addition to the four, the tremendous response to Tata Nano small car has sent a wave of fresh breath to the slowing auto industry.
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