It’s Maruti versus Mahindra this festive season
It can be said without any shade of doubt that the festive months of October and November are always crucial for consumer centric sectors like cars. Often a good festive season recharges the industry and at times like last year and in 2008, a bleak couple of months heralds a bitter dark winter.
So while all car companies line up launches ahead of the auspicious period looking to make as much hay while the sun shines, a few of them often break the clutter and leave an impact that goes beyond just the two months. This year, at least a dozen new cars would hit the roads and with the Scala ten days ago and the Mercedes B class earlier this week, the catwalk has already begun.
These two would be followed by many others including Tata Safari Storme, Chevrolet U-VA Sail, Nissan Evalia, Indigo Manza CS, Ssangyong Rexton II, Audi S6, BMW GT etc etc. But the two cars that would jostle among themselves to grab the maximum attention would be Mahindra’s sub 4 metre MUV Quanto and Maruti’s new Alto 800.
Quanto or the mini Xylo hits the roads today and at a price of Rs. 5.82 lakh, it is Mahindra’s cheapest and smallest vehicle till date. Many see it as Mahindra’s counterattack on the likes of the Ertiga, Duster and Ecosport, which are looking to penetrate into its forte of utility vehicles. Truly the Quanto, benefiting from the lower excise duties that cars shorter than 4 metres and powered by engines below 1500cc enjoy, is aimed at luring customers away from the B+ or premium hatchback segment.
In effect then, the Quanto would face off against Swift, Dzire, i20, Polo, Fabia, Etios and the likes. It is a game that Mahindra plays well. For good or bad it remains the king of MUVs and SUVs in India and though others have fancied their chances, none have been able to really trouble the company so far. Its bread and butter Bolero is having a dream run this year with sales in excess of 8,000 units per month in a market where the incentive to buy cars is little.
The Scorpio remains an old favourite and though it has started to look dated, continues to find customers new and old. There is no other vehicle that i know of where so many customers sell off their 5-6 year old Scorpios only to end up buying a new Scorpio instead. And the XUV5OO despite my many misgivings about the car was the show stealer of last year’s festive season.
So Mahindra has every right to feel confident about the Quanto. Developed on the same Ingenio platform that led to the Xylo four years ago, it is a perfect example of practical frugal engineering. Cheekily built, powered by a 1.5 litre diesel engine and priced under Rs 6 lakh, it has all the makings of a winner. I have not driven nor seen the car yet in flesh and blood, so I will refrain from commenting on its core capabilities though I must say I am always sceptical on that with any Mahindra or Tata vehicle.
If the success of the XUV5OO is anything to go by, the Quanto should propel Mahindra further into stratosphere. It is already breathing down the neck of Tata for the number 3 spot in the domestic passenger vehicle segment. Notwithstanding a new Safari or a sub 4 metre Manza, Quanto will easily pull Mahindra ahead of Tata. If it outdoes itself, then even Hyundai may have a few creases on its forehead.
Already the utility vehicle segment in India is galloping along at over 50% this year so far. Attractiveness of diesel as an automotive fuel and an inherent desire among consumer to own big burly cars have led to this surge. As an entry level vehicle into this segment the potential for the Quanto is immense. And it will also be well aided by the fact that Mahindra is also a favourite among rural customers.
Does this car need any introduction? A slow starter at the beginning almost 12 years ago now, it has been the bedrock of Maruti’s success after the decline of the original Indian people’s car Maruti 800. And the Alto has never looked back, reeling off seven consecutive years as the largest selling car in the country, sometimes defying laws of economics–of cyclical demand and base effect–and at times undermining gravity itself.
It has also defied time in an industry of shrinking product life cycles. Traditionally any car witnesses a generational change in design and engineering every 5 years and a minor change every two and a half years. In 12 years, Alto has remained by and large the same car. The only major change that can be attributed in its decade old lifecycle would be the discontinuation of its old 1 litre engine. But that happened way back in 2004 when the product was still trying to find its feet in the market. Till date the shape and platform of the car remains largely identical to what it was 12 years ago.
Later in 2010, the 1 litre engine made a comeback and the peppier Alto K10 was born. The impact of that was immediate. Sales rocketed from around 20-22,000 units per month to well over 30,000 units. In the process K10 also made Alto the largest selling small car brand in the world in any single market for the last two years. With sales of over 3 lakh units per year at the rate of more than 30,000 units every month, if the car alone were a company it would be the third and at times the second largest in the business.
The first full model change of this car then, is a big deal. It has to be. And though it was not planned this way, it comes at the absolute right time. As much as the popularity of diesel as a fuel has benefited Mahindra and Toyota, the fall from grace of petrol has hit the Alto hard. Since April its sales have slid and last month it hit a new low of just over 10,000 units a month.
It is not that Alto is suffering alone. All petrol run cars have become distress offerings for companies and their dealers. The Eon and i10 are a problem for Hyundai, the Spark is a headache for Chevrolet, every car is a tragedy for Honda and so on. The unpopularity of petrol cars itself was the main reason why the Alto versus Eon story fizzled out in such short time. But no company depends on one model as much as Maruti does on Alto. True it has the Swift, Dzire and more recently the Ertiga that are propping up its numbers. But none of them can compensate if a car that found 35,000 plus customers just 5 months ago suddenly finds the number reduced to a third.
Hence, a lot is riding on the second generation Alto. What we have heard so far is that the new car would be contemporary in design and practical in its usage. With a launch date somewhere in the middle of October bang in the midst of the festivities, we will know it for sure soon. It does not have a good luck charm of a diesel engine but nobody can write off a car that comes in at a price half that of any diesel car in the country. There is also that enviable legacy of being the bestseller for 7 years. And it is still ahead in the 8th as well.
Alto versus Quanto
Barring the fact that their names rhyme, there is nothing similar between these two cars. And the title of being the most awaited car this year is surely not something that they are very keen on. But there is an interesting spicy side story to this Maruti versus Mahindra battle. Even as we speak, it is being fought across segments, cities and dealerships.
When Maruti launched the Ertiga in March this year, it was the first time somebody was taking the battle to Mahindra’s home ground. Ertiga dived straight into the Xylo segment, the father of the Quanto. And it has held off well as many had expected. It is out lapping Xylo 3:1 and even Mahindra would admit there is little hope for the Xylo to hit back.
The Quanto though opens new frontiers for Mahindra. It dives into the Swift-Ritz-Dzire segment, a Maruti stranglehold. Nobody expects Quanto to outsell any of them but a decent showing would be sweet revenge for M&M. But the chapter will not end here. With a sub 4 metre Verito slated to come early next year, Mahindra will test Maruti’s resolve again in the entry level sedan segment. For its part, Maruti itself is developing an SUV based on the Swift platform–code name XA Alpha– that should be ready by 2014.
If that replicates the success of the Ertiga, against the Scorpio, then this nascent M&M rivalry (Mahindra and Maruti) promises to be no less juicy than the other Mamata-Manmohan (M&M) rivalry. And it may all be fought around festivities as well.