PANJIM: While the auto industry in India posted a negative 9.59 per cent growth in 2013 and a modest 2.46 per cent in 2014, the bright spot has been the compact SUV segment which has been growing at break-neck speeds.
Passenger car sales in the country during the January-December 2014 period rose to 18,51,475 units as against 18,06,965 units in 2013, a growth of 2.46 per cent. This is in contrast to the 9.59 per cent dip in 2013 which was the first time in eleven years that car sales declined. Further with the excise concessions now gone, the Society of Indian Automobile Manufacturers (SIAM) has revised downwards the growth projections for passenger vehicles for the financial year 2014-15 to around 1% despite December sales being up by 12.41%. The compact SUV segment has however been going at steady double digit rate despite supply constraints and this trend is expected to continue for the next five years. Cashing in on the new trend are early entrants Renault, Ford and Nissan.
The trend is no different in Goa. The first entrant in the compact SUV segment, the Duster, from French car maker Renault has single handedly driven sales for the company. Chetan Achrekar, general manager – sales at Quadros Automark Pvt Ltd, dealers for Renault in Goa revealed that 70 per cent of all Renault sales in Goa come from Duster. “The Duster has become the face of Renault. We sell a total of around 50 cars a month and 35 numbers come from the Duster alone.”
“Since the launch of the Duster in the sub Rs 10 lakh range, it has ended up creating a new segment in the auto industry in the country. It has become a style statement and an option for those aspiring to own an SUV but couldn’t afford it,” said Achrekar.
The sentiment was echoed by the representative of the current market leader, Ecosport from Ford. Prakash Takkekar, team leader – sales at Caculo Ford said the Ecosport has been a runaway success from the get go. “We sell about 60 units of the Ecosport every month despite having a waiting period of 2-3 months. It constitutes around 60 per cent of total sales. We do not have enough supply of Ecosports or our numbers would have been even better,” said Takkekar.
The Ecosport is showing such strong numbers because it provides the best value for those wanting to upgrade from hatchbacks and sedans. The very aggressive pricing also means that even the mini-segment buyers are dumping the hatchback for the Ecosport. It is also attracting SUV owners to pick it up as a more practical addition for city use. The car is feature-packed and one of the variants comes with the powerful yet efficient Ecoboost engine which has a big hit in the mileage sensitive market, said Takkekar.
The third player in the three-horse race is the Nissan Terrano. “We sell around 30 units of our compact SUVs per month though we are priced marginally higher than our competitors,” said Pradeep Jadhav of A M Ventures who are the sole sales, service and spare providers for Nissan in Goa.
While Renault, Ford and Nissan would be thanking their lucky stars that their compact SUVs have the whole segment to play with, the heavy-weights – Maruti, Hyundai, Mahindra, Tata, Honda and Toyota re all lining up launches in this segment.
Maruti Suzuki had showcased an SUV concept which is likely to hit the market this year. Mahindra and Mahindra Ltd plans to launch a compact SUV code-named S101. Hyundai Motor India’s compact SUV code-named HND-7 is also likely to be launched in the second half of the year close to the festival season and it is rumored that Toyota has begun feasibility studies in India for a subcompact sports utility vehicle (SUV).
Given the falling crude prices, lower inflation, change in RBI’s hawkish stance, improving sentiment in the Indian economy and the new car launches lined up, the stage is set for a rocking 2015.