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Are all those fancy new luxury cars in India really selling? By Swati Prasad
The premium car segment is abuzz with activity. Last month saw the launch of the new Hyundai Sonata and the sixth-generation Toyota Camry. There is more to come -- GM plans to launch Vectra before the close of 2002. For once, Indian roads have some of the wheels that can be seen gliding down the streets abroad. But are these cars selling? Yes, they are. At least in numbers that fit in with their price tags. Or rather, the price-value equations. The upper-end Indian car buyer, it seems, is not as brand-struck as some have imagined. This is perhaps why the Skoda Octavia, the German engineered car with Czech costing, is doing so well. Priced at Rs 10.8 lakh, say technical experts, this BMW-proxy is a steal for the tightly crafted product it is. And the Octavia is selling more than the Hyundai Sonata, Ford Mondeo and Honda Accord put together. From a sales of 105 units in January, Octavia's sales stood at 601 units in August 2002. Skoda India has already sold 3,669 units of the Octavia this year, while sales of Sonata, Accord and Mondeo for calendar 2002 stand at 1,803, 964 and 672 units, respectively.
And the other contenders? Toyota Camry, priced at Rs 18 lakh , was launched on October 20. This car has sold over 8 million units worldwide, and Toyota Kirloskar Motor Ltd hopes to clock sales of 1,000 units of the sixth-generation Camry in the first year of launch. Another recent unveiling has been of DaimlerChrysler's new E-Class, which bears the same elegant front face -- with those unmissable headlamp 'eyes'. At around Rs 33 lakh, this is not the fanciest set of wheels on the road (that prestige rests with Mercedes' S-class cars), but is quite something nonetheless. Choice in the luxury sedan segment is sure increasing, despite its small size (around 4,000 units a year), and this is good. Since these cars are imported fully-built, marketers can try out other models as well, without much ground investment. This will add variety to five-star parking lots, if not the roads. Choice is important. The affluent, remember, are thought to be the most conscious of the wheels they travel on. This would mean that they're more brand conscious, too -- as far as the brand signifies something about who they are, what they like and what they think. Clearly, Camry and Mondeo -- and even Sonata -- are better known than Octavia. Or at least better recognised by most people in the country. Yet, what most recognise is not always important to the elite. Octavia is simply a better value-for-money deal, as several analysts seem to be saying. And it is reasonable to assume that sophisticated buyers know what they mean by 'value' -- an issue that marketing advisor Shunu Sen once said has been under fierce debate for ages and ages. In the West, in any case, at least since the days of Lord Leverhume, the founder of Unilever.
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The only car that could come close on
price, is the Sonata two-litre (for around Rs 1.1 lakh more). But this
Jaguar lookalike has found the going tough, sustaining sales on just its
looks and attractive pricing. Despite its classy interiors, it was
perceived as underpowered at an engine displacement of 1,996 cc -- even as
the auto magazines were giving better ratings to Ford Mondeo and Honda
Accord, which are better known globally as well. Little wonder then that
within 15 months of its launch, the Korean chaebol has introduced a more
powerful version of the Sonata, with a 2.7-litre V6 engine, priced at Rs
15.9 lakh.