Giants of Indian Car Industry - Battle for Supremacy or Survival

Prior to the year 2000, Indian car market used to be a sellers' market and was majorly dominated by few players such as Maruti Suzuki but since then things have been continuously hotting up in this auto segment. As on date, customer is the king with plenty of various options in each category and a battle of supremacy or survival is being fought at the centre stage. Let us look at few of the giants who had played a major role in the past and every one of those who are bound to be a key player in the future.

Maruti Suzuki: The Numero Uno

With almost over 45% market share, Maruti is the undisputed NumeroUno of Indian car industry and there is nobody in sight who can challenge its might in near future. Maruti can boast of the best after sales service and one of the most economic vehicle line-up in their armory. With blockbuster products such as 'Swift', 'Dzire', 'Alto' and 'WagonR', Maruti not only rules the entry level car segment but hatchbacks and entry level sedans as well where currently most of the big numbers are. But luxury sedan and SUV are the two segments where Maruti has faced not only stiff competition but they have failed to even register their presence significantly with all the models from 'Baleno' to 'SX4' and 'Grand Vitara' to 'Kizashi' proving to be duds. With models such as 'Ciaz' and 'XA Alpha' in pipeline, I hope that auto major will be able to stir upper segments as well but as of now it seems customers relate the brand with more of economy type of vehicles rather than the luxury type of vehicles and changing this perception will be a major task for our NumeroUno. Still the way market is changing with every new launch, Maruti needs to be on their toes in order to safeguard its position and further cement it in the market.

Hyundai: The Successor

When Hyundai launched 'Santro' in September 1998, nobody thought this company will be a major force in India but since then this Korean major has never looked back. Hyundai has always been holding its number two position and with stylish products as well as excellent service network, they have maintained this position in Indian market for long. With product range such as 'i10 and i20 Family' as well as recently launched 'Xcent' and stylish 'Verna', there is less doubt that they will have any threat to their number two position but with Honda hot on their heels who knows they may be in for a surprise in future. I feel Hyundai needs to address the growing demand in entry level SUV and MPV segment soon or their number two position can be in jeopardy in future since I can see that their fan following is not as loyal as people may think. But all said and done, as of now they are true successor to Maruti Suzuki and currently sitting pretty firmly on their runner-up position.

Honda Cars: The True Challenger

From starting itself Honda has been a very strong brand in Indian market and has been considered synonym to superior quality. It had legendary products such as 'Accord' and 'Civic' as well as all time heart throb 'City' in its stable but till last year with all petrol line-up they were never able to churn the required sales volumes. But with launch of models such as 'Amaze', 'Mobilio' and 'City' diesel, it seems their worry days are over. They have now almost perfect vehicle line-up (entry level SUV is still missing though), superb brand value and excellent after sales service to back their grand Indian dream. Honda is the one I believe every other manufacturer is currently worried about. It has already surpassed likes of Mahindra, TATA Motors and Toyota in less than one year and must be eyeing number two position in near future but I am sure the competition will not be sitting idle and Honda's journey to stardom will definitely be no cake walk. Another challenge which I believe with Honda is that their products are not only competing with other manufacturers' products but somehow they compete with their own products as well. Like for example one reason for sales volume of 'Amaze' going down is that of increasing sales volume of 'City' and I am sure 'Mobilio' will somewhere dent their numbers as well. When a customer goes to their showroom they go to purchase a Honda car and with easy financing available they tend to opt for a vehicle they like most even if that means stretching the budget a bit. So it clearly means that they still have to create a market pool of individual models like Maruti or Hyundai has and this may prove to be the winning stroke for them in the longer run.

Mahindra: The Niche Leader

Mahindra has always been known for their SUVs and Utility vehicles and is undisputed leader of this segment from quite long. Whether it is iconic 'Scorpio' (which definitely marked a new era for the company) or it is ultra-reliable 'Bolero' or uber cool 'XUV500' they had mastered the art of SUVs. Here by art of SUVs I not only mean making but selling as well but as you can see I also used 'had'. There are few reasons for my scepticism and primary reason being not a great response to 'Xylo' family vehicles whereas it should have been another success story for the home grown major. Secondly, with introduction of many new models in SUV segment and some like 'Duster' and 'Ecosport' which are still going strong, somehow Mahindra had left enough space in the segment for them to flourish. I believe they have yet to master the mind of urban clientele where expectations are high and lot of other factors such as excellent customer service do matter. I feel it is time for another revolution and lot of introspection like they did during introduction of 'Scorpio'. Another pain point for Mahindra has been entry to lower segments such as sedans. Whether it is 'Logan' or rechristened 'Verito', sales registers are not ringing and this is another proof that they are not urban customer ready yet. All said and done I do not see the niche leader as sleeping giant and with slew of upcoming launches and few strategic changes, leadership dream can be round the corner for our home grown SUV leader.

Toyota: The Consistent Performer

When you talk about Toyota in India, one can easily see consistency in performance. In terms of sales volumes, Toyota is neither in the top rung nor in the bottom and has consistently maintained its 4th or 5th position. Toyota products are always termed as reliable no-nonsense machines and customer service is nothing less than excellent. I am somehow always surprised why this global leader never seemed to be aiming for leadership in India. As per them, whether they are not able to find right fit mass products for Indian market or it has something to do with deep rooted appeal and approach of Maruti and Hyundai, with full packed armoury at Toyota's disposal I strongly believe Toyota has not reached where it should have been. Somehow it seems focus is always on MPV segment and no doubt 'Innova' is still the market leader in its class but with so many new models in the pond this strategy seems risky in the longer run. Anyways Toyota is always known for that as they had taken everybody with surprise in the past when they suddenly stopped selling their best model 'Qualis' in 2005. I still believe they shouldn't have stopped 'Qualis' as till date Toyota has not been able to launch anything in SUV segment and this segment is definitely churning good numbers in India at present. Nevertheless everything happens for a good reason and I feel Toyota is happy with the current going. Since both 'Fortuner', 'Innova' are front-runners in their segments and 'Etios' family, 'Altis' are not doing bad either, Toyota has plenty to gain and nothing to lose. With right strategy and approach, this global leader can be a serious threat to the current leaders as I feel its path is clear cut and well defined provided Toyota realises this itself.

TATA Motors: The Defender

With almost a drop of 40% in domestic sales volumes within last two years, this home grown major is somehow defending its turf mainly because of its saviour JLR (Jaguar Land Rover). Even with plenty of weapons in its armoury, everything either fails to fire at the right time or misfires altogether. I contribute this mainly to some wrong decisions as well as lack of creative approach and strategy. 'Nano' was positioned so badly in its initial phase that what could have been People's car today is now reduced to Poor Man's car. I am sure that the current sales volume of 'Nano' would not be more than 10% of what TATA would have anticipated when this dream car idea was formulated (I had predicted this in my earlier blog "TATA Nano: Has the dream gone wrong?" written on 10th July 2009 just after two months of its launch). I still hope that TATA Motors will find a way to get this dream car back on track soon and will not let it go down in history as a failure. Another model which could have done better was 'Aria' but the decision of launching it in 4x4 variant only and that is with highest price tag in its category was a very long shot and definitely it has missed its mark. Moreover, even though 'Indica' and 'Indigo' are good vehicles they failed to generate and garner consistent good response from the customers and mostly after sales service needs to be blamed for that. Now comes curious case of 'Safari', it is one very good vehicle with excellent reviews but unfortunately sales numbers are not so promising. This model was always overshadowed by models like 'Scorpio' and TATA never did anything out of the way to come out of it. This is probably true in case of all their models as one fails to see any innovative or creative branding and marketing campaigns. But you cannot count them out yet as with new models such as 'Zest' and 'Bolt' in launch phase as well as many others in pipeline, revival may be round the corner for our this home grown major and I firmly believe that this is one company which always had and will always have the best shot for the leadership position in Indian market provided they play their cards perfectly.

Chevrolet: The Bystander
Chevrolet is another manufacturer which has all the fire power in its arsenal but they refuse to use it. Sales volumes are dropping consistently but they seem to be acting just like bystanders and doing nothing about it. All the models 'Spark', 'Beat', 'Sail', 'Cruze', 'Enjoy', 'Captiva' and 'Tavera' have good reviews but somehow there is no push from the company to revive the sales or even network for that matter. This is one more company which I believe can do much better than what they are doing currently. There are certainly few gaps in the offering such as entry level SUV and entry level luxury sedan (space created because of discontinuation of 'Optra' model) but I guess that they will be taking care of it soon with models like 'Trax' and 'Trailblazer'. According to me this will not be sufficient if Chevrolet really want to be in the top rung and they need to focus more on 'Tavera', 'Enjoy', 'Sail' and 'Beat' where currently sales volume are in the market.

Ford: The Veteran
Ford is no new to Indian market and its roots can be traced back to as long as 1907 which makes it literally the first auto player in India but that innings lasted only till 1954 and Ford re-entered Indian market in 1995. Since then it's a satisfactory journey for them but it cannot be termed as outstanding since even with calibre Ford was never able to break into top three rankings. After a long time Ford launched 'Ecosport' which has proved to be its most successful launch till date but with so many players eyeing this segment journey can be tough in future. Apart from this we had already seen three avatars of 'Fiesta' and barring the first one sales volumes have been sluggish since then. Again 'Figo' was a success in initial phase but it is now content with sales of around 3000 nos per month but I feel it has the potential to do lot more. 'Endeavour' is a good vehicle but sadly there are hardly any numbers worth mentioning. 'Classic' again is slow in terms of sales but it has survived rough weather and will continue to do the same until there is a drastic strategy change from Ford. I have observed that customers perceive Ford as a costly maintenance vehicle which may not be true and company needs to change this belief as soon as possible. With 'Ka' and 'Figo Sedan' in pipeline, Ford still have some aces up its sleeve but these models will succeed only if ground work is done perfectly.

Renault / Nissan / Datsun: The Musketeers
Whenever I think about them I can only recall siblings, 'Duster' and 'Terrano', 'Micra' and 'Pulse', 'Sunny' and 'Scala'. One may always feel that what is the point of same models with cosmetic changes fighting with each other in the same space but it depends on the strategy of the companies and I feel reason behind it is to increase shelf life of a particular product. Among all the products launched, 'Duster' was the only noticeable success whereas most of the others have fizzled out after initial phases. Though products are good somehow they do not linger for long in customers' mind. Even 'Datsun Go', 'Evalia' and 'Fluence' have failed to garner sufficient numbers and hence probably it is time for company to think of some new strategies or major shift is required in the approach. All said and done, one thing is very clear that this trio is not here to go out meekly and bounce back may be on the cards anytime soon but something needs to be done or losses will keep on mounting at dealers' end.

Volkswagen / Skoda: The Global Giant
This global leader would be thinking that how come best products always fail to sell in India but that is the peculiarity which makes Indian market stand apart. From the beginning itself Volkswagen always tried to do something different, whether it is innovative marketing or creative approach they did all. I still remember opening newspaper on one fine morning and music coming out of it from Volkswagen creative ad. It is not that they have not tasted success in India but they were not able to keep the momentum going. I strongly believe that there were some basics which went wrong during the journey and company is trying its best to reverse its effect but the major point here is whether their understanding of Indian market is still right or not. Japanese and Korean companies have found that pulse as of now but as we know life changes every moment provided you have it in you to change it. Technically speaking all the products from their stable, 'Polo', 'Vento', 'Jetta', 'Passat' are superb except for few nook and corners or dwindling sales numbers. Even Skoda have fantastic products in terms of 'Rapid', 'Octavia' and 'Superb' though not much focus has been given to 'Fabia' and 'Yeti' but sales numbers are not as it used to be. So probably it is time for a rethink over strategy and a change in approach so that they can challenge the current market leaders and if Volkswagen fails to do so then I will be highly disappointed. With models like 'Up' and 'Taigun' in the pipeline, I hope things will change for this global leader.

Fiat: The Supplier
Fiat vehicles are always synonym to reliability but only with 'Punto' and 'Linea' in offering it has been a tough ride for the auto major. I am always surprised that a company which supplies diesel engines to many of its Indian counterparts is till now happy and content with its market position as vehicle OEM. I believe Fiat is maintaining its slow and steady approach and with introduction of its urban SUV 'Avventura', things will start rolling in its favour but it will be some time before Fiat will taste some major success in Indian market. One observation though that 'Avventura' as I can see is in its sporty edition and there should be an executive edition of the same as well or Fiat will be restricting its pond size to some extent.

Audi  / BMW / Mercedes: The Big Guns
These three players had launched more models / upgraded versions of their vehicles than even some of the full range players in Indian market which clearly demonstrate the upswing in ultra-luxury car segment. With 30000 odd vehicle sales among them, this segment is expected to grow in healthy double digits and these three may be able to literally affect course of Indian Automobile industry few years down the line. Moreover they are themselves launching vehicles in lower price range so that they can cater to bigger clientele and share a bigger pie. I am keeping a tab on them and waiting for the right time to bring their battle royale on paper.

In the end I can only see that none of the above players are at any disadvantage and only few have edge over others, so Indian auto sector is bound to have lot of action in near future. Players will move up and down, loyalties will change, models will come and go and a simple Indian family will be spoilt for choices. So it will be very interesting to see how these auto giants react to situations and what cards they play and at what time and how. This is going to be hell of a roller coaster ride of supremacy and survival so fasten your seat belt to enjoy and that is what my heart whispers to me.....