Numbers don’t lie and the Indian consumer is no longer ready to be taken for a ‘ride’. The vast choice and the increased variety of cars in the market has really made the consumer the KING. From the top-sellers and fuel-efficient cars from Maruti Suzuki to the top of the class European brands – everything awaits the consumer.
The choice and variety can truly be over-whelming for the Generation X, the middle aged Indians who in their hey-days could only choose from a handful of models – the Ambassadors, the Premier Padmini and the Maruti 800. The folks who wanted to stand-out bought the Contessa or 118 NE. Unlike, the choice to the Indian voter, there was no “None of the Above” option.
Now, there are probably a bit more than 20 manufacturers in the market with close to around 150 models and around 1000+ variants. The consumer is ‘smart’ and given the realization that he is the KING has surely made him ‘toss away’ the cars that do not appeal. At the same time, the consumer has an ego, an ego that remained suppressed through his childhood where-in he only state-of-the-art cars only on the centerfolds of magazines or being driven by the ‘filthy rich’. So much to say, owning the ‘cheapest car’ did not appeal to him.
Discussion related to cars is in terms of ice-breakers only second to that about cellphones. It even surpasses cricket. So price, features, quality, serviceability – everything and anything is a talking point. Such plain talk is the influencing factor for the next purchase and unfortunately there’s not much of purchase happening. The growth in the Total Available Market that was used as an input for the huge investments Ford, Chevrolet, Renault, Nissan et al have made is no where visible.
The market has been ‘flat’ at best and most of these manufacturers are happy even with the gain of a few points in the market share. Yet, there’s no eating into the slices of Maruti Suzuki and Hyundai.
Thanks, however, to the huge drop in the market share of Tata Motors, most new entrants have still managed to stay happy and rise up.
The adjoining graphs show the shrinking size of the yellow slice of Tata Motors. From a sizable 14% in early 2012 to 6% in the closing months of 2013, Tata Motors is the only shrinking slice of the pie. In the people carrier, Sumo and Safari struggle against Mahindra’s Bolero and Scorpio, the lack of a solid challenge to the Toyota Innova clearly indicates a big miss in the strategy.
As for the personal use, the Nano hasn’t even sold 2000 numbers per month, while the Indica and Indigo haven’t been able to keep pace with the Generation Y and Z. The Ambassador and the Padmini never appealed to the Generation Y, similarly the Indica and Indigo models haven’t appealed to the Generation Z who though isn’t behind the wheels yet, but prescribes the purchase to his parents. Honda and Ford have taken bigger strides. The biggest segment the Indica and Indigo’s now cater to is the ‘small taxi’ and the ‘city cabs’.
As cheaper options in this category emerge from Chevrolet, Nissan and Renault, this remaining ‘lean’ portion of Tata Motors is also at risk.
What’s the solution you may ask ? – Clearly they have to improve and chase – either the fuel efficiency of a Maruti or the quality of Toyota or the reliability of a Mahindra but most importantly Tata Motors needs a visual overhaul and move over from the Nano, Indica and Indigo.