|
|
|
|
       
|
AUTO X-TRA The All New Cars Show 2001 may have been a bad year for car makers, but that didn't stop them from launching eight new models. Now, 2002 looks set to be worse but the companies are hoping that more launches will do the trick. By Swati Prasad Car makers are a truly determined lot. They never give up. In a year marked by a sustained slowdown in demand across industry, the 12 players in the Indian car market tried their best to lure the reluctant consumer. While some of them pruned prices and threw in additional features, others offered sweeter financing deals and other freebies. But the outcome was lukewarm. Although eight new cars were launched in 2001, sales of cars and multi-utility vehicles (MUVs) were down by 7 per cent during January to October 2001, with sales touching 555,046 units, down from 596,470 in the same period last year.
Yet, 2001 saw no let up on the supply side. In April, the government dismantled the quantitative restrictions (QRs) on imports, allowing imports of completely built-up units (CBUs), the official euphemism for fully assembled, finished cars. Although cars imported through this route attract a 65 per cent rate of duty, this allows car makers to virtually offer any car in their global repertoire to the Indian consumer. More help came in the form of a leg-up from the Union Budget, which reduced excise duties on cars by 8 per cent, leading to price cuts ranging from Rs 8,000 to Rs 35,000. Next, the Reserve Bank of India (RBI) slashed interest rates, reducing car finance rates by an average of 2.5 per cent. Consumers could find finance at rates as low as 13.5 per cent, and financiers went a step further, offering even more attractive options like cash discounts, free gifts, and zero interest schemes. Not that they helped. The general economic slowdown, widespread retrenchments, cost-restructuring across industry and a stagnation in salaries all added up to keep demand for cars depressed. Says B.V.R Subbu, Director (Marketing and Sales), Hyundai Motor India: ''While the small car buyer settled for second hand cars, the gloomy business scenario forced the Santro-Zen buyer and the Esteem-Accent buyer to postpone purchase.'' New Launches In all, car makers went ahead and launched eight cars last year. What's more, two segments were introduced in 2001-the D segment (with cars at Rs 10-20 lakh) and the multi-purpose vehicle (MPV) segment. Five car makers introduced D segment models-DaimlerChrysler (then Mercedes-Benz) launched its C Class, Honda its Accord, Hyundai offered the Sonata, Skoda came with Octavia, and Ford launched the Mondeo. Maruti Udyog debuted with the first MPV-the eight-seater Versa. New launches, particularly in developing markets like India's, usually generate buyer interest and the Honda Accord, launched in July, sold 916 units till November. Hyundai's Sonata, launched in August, sold 842 units. ''New models help trigger a positive sentiment in the market and up sales,'' says Rajiv Dube, General Manager, Commercial Passenger Car Unit, Tata Engineering. The year also saw the entry of a new car maker. After sitting on the fence for all of five years, Czech marque Skoda, now a part of the Volkswagen group, finally rolled out the 1.9 litre- (petrol; the diesel model comes with a two-litre engine) size Octavia, priced at Rs 10.6 lakh. Skoda has kept its investments in the Indian market low and operates with just four dealers and 38 employees. It imports all the parts and assembles them at its plant in Aurangabad. In the first month of its launch, it sold just 175 cars. Ford's latest model, the Mondeo, touted as the country's first virtual reality car (because it was conceptualised, designed, and developed completely using the company's worldwide intranet), hit the roads on December 17, 2001, with a price tag of Rs 15.56 lakh (ex-showroom in Delhi) for the 2,000 cc petrol model and Rs 16.79 lakh for the diesel variant. The Mondeo offers new features like side airbags, pyrotechnic pre-tension seatbelts (which self-adjust to minimise injuries in the event of accidents) and an adjustable steering column. Earlier, in July, General Motors launched a station wagon variant of Corsa, the Opel Swing, and, in September, Fiat India launched Palio in the already overcrowded B segment (cars priced between Rs 3 lakh and 5 lakh). Consumers have been lukewarm towards station wagons and both Fiat India and Maruti Udyog sell only around 15-20 units each month of the Siena Weekend and Baleno Altura, respectively. But Rajeev Chaba, Vice President (Marketing), General Motors India, says his company has been able to sell over 100 units of Opel Swing each month, with the help of innovative advertising and aggressive pricing. Fiat India has pinned its hopes on the Palio, expecting it to lead a turnaround in the company's fortunes. During April to September 2001, Fiat India's sales were down by 23 per cent. But after the Palio was launched, things are looking up. ''Since its launch on September 27, 2001, we have sold over 6,000 Palios and we have 5,500 orders in hand,'' says a Fiat executive. 1 | 2 |
|
Issue Contents Write to us Subscription Syndication INDIA TODAY |
INDIA TODAY PLUS | COMPUTERS TODAY | © Living Media India Ltd |
 |
 |
SKODA
OCTAVIA
FIAT PALIO
HONDA ACCORD