Manufacturers sit tight on upcoming new launches to speed up sales

Indian roads are soon going to see a major breakthrough that’s not happened for quite some time at least. There are 7 new models hitting the roads namely 5 cars, one bike and one scooter in October 2011 and November 2011. Even though these releases do coincide with the upcoming festive season, it’s still a rare occasion. The festive season, which accounts for highest sales in India, is thought to bring good luck among consumers when something new is bought.

In the past, models had been developed afresh in the market unlike at the present time where manufacturers believe in upgrades and cosmetic facelifts to their existing products. The launches that are coming up currently partly are due to the hike in interest rates and fuel prices. Potential buyers have delayed their purchases because of the current economic situation in India.

For 2 months in a row, car sales have gone down by 11% in August 2011 to 1,44,516 compared to those sold just over a year ago; however, there could be only less rejoice despite the new introductions according to analysts.

Manufacturers sit tight on upcoming new launches to speed up salesManufacturers like Hyundai and Honda are coming up with their Eon and Brio launches. These cars would debut in sectors where Maruti Suzuki had an upper hand for a long time. Due to this, there are factual rumours about Maruti coming up with a design close to Alto, their highest selling car, and price the new car much below the Alto price.

Honda plans to launch the Brio on September 27, 2011, at a price of Rs. 4 lakhs to 5 lakhs. Honda predicts good sales in this segment that constitutes around 75% of sales in local market.

The Brio is considered to be a big launch after Honda City, and Honda expects that this car would compete with Hyundai’s i10 and Maruti’s Swift and Ritz and assist in the company’s sales volume.

The petrol variant of the Brio is not disadvantageous according to Jnaneswar Sen, VP, Marketing and Sales, despite people shifting to buy diesel cars. The gap between the prices of petrol and diesel is now Rs. 26 per litre. Sen says even though diesel cars are on demand currently in India, ownership costs of the Brio’s petrol variant would find suitable buyers opting for it. In March 2012, Honda is expected to speed up its dealerships to 143 outlets in 91 cities when compared to 125 outlets in 2010 April in 77 cities.

India’s 2nd biggest car manufacturers, Hyundai, would be launching their small car Eon in October. The Eon’s price would be between Rs. 3.5-4.5 lakhs. Hyundai’s planning to compete against Maruti’s Alto that averages around 25,000 to 30,000 sales monthly. Analysts feel that since i10 comes with a number of trimmed levels, the Eon and i10 might eventually fight against each other when it comes to sales.

With introductions of both Brio and Eon, analysts feel Maruti would be facing tough competition against Honda and Hyundai, and they would have to come up with new approaches strategically to put off competition.

On Wednesday, Mahindra & Mahindra, would be introducing the XUV 500 (SUV) in a segment that aspires to compete globally. The company’s R&D Department in Chennai are responsible for this new vehicle, and the project is predicted to go higher than Scorpio in terms of developmental costs, scale and scope. Mahindra are basically considering entering markets globally. Mahindra & Mahindra aim to sell XUV in Western Europe, South Africa, South America and Australia.

Hero MotoCorp Limited, the earlier Hero Honda, would be launching their gearless scooter called Maestro and a dirt bike called Hero Impulse in October 2011. It could be noted that Hero ended their long alliance with Honda spanning 26 years and unveiled their brand name and their first 2 products at a celebrity-filled event in London some time back. Hero expects to sail alone with new strategies and expects both the Maestro and Impulse to do well in the Indian market.

Skoda Auto, Czechoslovakian car manufacturers, partly belonging to Volkswagen Group are changing direction too. They are planning to launch Rapid, a sedan, priced at 7 lakhs to 10 lakhs at the end of October 2011. The Rapid is one of Skoda’s first kinds to be priced below 10 lakhs in the sedan market. This sedan is expected to directly compete with Volkswagen Vento, Hyundai’s Verna Fluidic and Maruti’s SX4.

Analysts feel while these new launches by automotive manufacturers would aid in sales revival, manufacturers could expect dynamic sales only after the next year as buyers often buy models at the beginning of a year change as it aids in resale value.

Tata Motors have been allowing other manufacturers to gain over them in utility vehicle sector, but now they are planning to come up with a cosmetic upgrade of their old Sumo that would be introduced with a brand new engine too.

The SIAM does expect the current year to end with a 10% to 12% rise in growth, but it may still be difficult and end up with a modest rise of 5% to 6% gradually.

2 Replies to “Manufacturers sit tight on upcoming new launches to speed up sales”

  1. Thanks for sharing this. There is a tough competition amongst the car makers in India. All of the companies find a massive market in India. In India there is a huge demand of small cars. So, most of the companies launches mostly small cars with less price.

  2. Competition is only in cars in India. Car buyers have more choice.

    Bikes have remained the same old bikes with new stickers. New bikes are just modified old bikes. Also bike makers are removing kicker to make more profit. Bike segment is neglected in India. No new reliable models with kicker at all. Each bike intentionally lacks something, like kicker, rear disc, etc.

    No single 150cc bike has all features like monoshock, kicker, rear disc, low pillion seat, LED tailamp, etc. At least one of those features will be missing in each bike intentionally. Seems like bike makers have formed a cartel in India.

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