The year belonged to the UV segment. While passenger car sales grew just 1.28% between April and November, UV sales jumped 62%. As far as two-wheelers are concerned, the year saw the rise of HMSI
If last year had been a nightmare for the Indian auto industry, 2012 was more hopes dashed despite over 20 new launches and facelifts. While the year began on a positive note when the industry showcased its best wares at the Delhi Auto Expo, the enthusiasm waned as the year progressed. Policy paralysis, adverse foreign exchange movement and labour unrest gave manufacturers headaches throughout the year, while consumer demand also headed south on the back of slowing economic growth, rising fuel prices and interest rates.
However, there was one segment that saw good news—the utility vehicle (UV) segment. The numbers are explicit evidence—while passenger car sales grew just 1.28% between April and November (to 1.24 million units), UV sales jumped sharply by 62% to 3.57 lakh units. For Mahindra & Mahindra, which saw 95% of sales coming from UVs, 2012 was one big party—M&M’s sales grew 32% between April and November. While increasing production of its flagship model—the XUV500—and updating the age-old Bolero with new looks, M&M reaped the harvest by launching a new entry-level model in September, the Quanto, at R5.82 lakh starting price. Then, in October, it turned the focus on the opposite end of the segment with the launch of the Rexton, the first product from South Korean firm Ssangyong, which M&M had acquired in February 2011.
The growing UV market also gave Renault a chance to finally establish the brand in India, after its first innings where it had started an unsuccessful joint venture with M&M to make the Logan. Renault launched the Duster compact SUV, which made waves in the market by targeting the sizeable chunk of Indian buyers who aspire for a big car with a wide stance, but at an attractive price and driving comfort of a small sedan. The Duster and the Quanto gave birth to an entirely new segment of compact SUVs, where a lot more action is expected over the next 2-3 years—Ford, GM, Maruti, Tata, Honda, Toyota and Hyundai, all are reportedly developing products for this segment.
Market leader Maruti Suzuki launched its first serious UV contender in April this year, the Ertiga MPV. The Ertiga was responsible for keeping Maruti’s sales steady between July and September, when its other mainstays (Swift and Dzire) saw a production halt after labour trouble at the Manesar factory. Available in diesel as well, the Ertiga is not only a success in India, but in Indonesia also where Maruti sends knocked-down kits for assembly. Even Nissan jumped into the MPV fray with the Evalia.
Land Rover launched the new Range Rover, while parent Tata Motors also launched a new product after a long hiatus—the new Safari Storme. Toyota updated the top-selling Innova MPV and Fortuner SUV with new features and revised design, while Mitsubishi launched the Pajero Sport.
Another major shift seen in 2012 was the sharp tilt towards diesel cars and flagging sales of petrol cars that led to high inventory pile-ups and underutilised petrol engine capacities across companies. From about 30% of the market two years ago, the share of diesel variants in new car sales crossed the halfway mark in the middle of this year. In December, it stood at 58% and is set to rise as more carmakers start offering diesel versions—Honda Amaze diesel and Hyundai i10 diesel.
There were significant launches in other segments as well. Maruti Suzuki, which sells two out of every five passenger vehicles in the country, launched the new version of India’s top-selling car, the Alto. A major revision after over a decade, the Alto 800 saw bookings of over 40,000 units within two months, helping pull up flagging petrol car sales. (Hyundai’s Eon saw growth as well.) The Swift Dzire’s diesel variant pushed up volumes after launch in February, while the Ritz saw a face-lifted version being launched later in the year.
Hyundai, however, largely focused on the premium sedan segments with the launch of the new Elantra and Sonata models based on the ‘fluidic sculpture’ design language first seen in the new Verna. In fact, the Elantra has now climbed to the top of the executive segment, though the segment itself is declining. While a new i10 is expected next year, in 2012 Hyundai updated the i20 premium hatch with a design refresh. Renault also boosted its mass segment portfolio further with the launch of the Pulse and the Scala, essentially re-badged Nissan Micra and Sunny, respectively. Tata’s celebrated Nano, unfortunately, remained a nano performer despite revamped versions and new marketing campaigns. While sales were less than half of the 20,000 unit monthly target, there was improvement over last year with a 17% growth in the April-November period.
The world’s largest carmaker Toyota launched the new Camry, while GM made a fresh bet on the mass segment with the Sail U-VA, a replacement for the Aveo U-VA, though sales are yet to pick up.
A third trend to mark 2012 was the increased offering of competitively-priced automatic transmission options in cars—Maruti now offers an auto box in the Dzire, while Honda launched the automatic Brio. Ford also launched a fuel-efficient automatic for the new Fiesta. More automatic options are expected to come soon as buyers in crowded cities demand more comfortable driving solutions to deal with stop-and-go traffic.
In luxury cars, a segment growing fast in India as incomes and aspirations rise, many interesting things happened. While Mercedes pushed segment-starting prices further down with the B-Class sports tourer at R21 lakh, Audi’s new Q3 helped it push Mercedes to the third spot and challenge BMW for the pole. BMW, meanwhile, launched its Mini brand of small, sporty cars, which seems to have caught the imagination of the upwardly mobile with deep pockets.
In the two-wheeler segment, scooter sales pulled up the market with a 20% growth (to 1.94 million) between April and November, while bikes sales remained flat. The year belonged to Honda, which announced plans to commence a third facility (near Bangalore) by early-2013 and add 5-6 more plants by 2020 to take its annual capacity to 10 million units from 2.8 million today. Honda, which broke its partnership with Hero last year and then launched seven products, has its eyes on the top spot by 2020. Market leader Hero MotoCorp got its R&D act together by announcing tie-ups with three technology/design firms in the US and Europe, while Yamaha entered the scooter market with the Ray. TVS made a second attempt at the lucrative 125cc motorcycle segment by launching the Phoenix.
Among the big boys, Royal Enfield moved upmarket with the swanky new Thunderbird, though its ‘Cafe Racer’ is still awaited. Harley-Davidson strengthened its presence in India with local assembly, while its British competitor Triumph started work on its new plant near Bangalore.
