The Ambassador, Maruti 800 and Hyundai Santro may not count for much in the global automotive story but when it comes to the Indian chapter, these cars are nothing short of legends. Read more
2014 has bid us adieu and its time now to see if there has been any major change in the list of bestsellers. In the top 15, there are 7 cars from market leader Maruti, 3 from Hyundai, 2 from Honda and 1 each from Mahindra, Toyota and Ford. Surprise, surprise, there is no Tata car as the Zest has not been able to live up to the expectations yet. Last year wasnt the best for the industry at large, so while many of the brands have retained their positions their real performance varies from case to case. Here, is the top 10.
Maruti Alto : 264,544 units -0.46% over 2013
The Alto retains its stranglehold at the top of the podium with a comfortable lead over the rest of the field. This is the diminutive car’s 9th consecutive year at the top and there are no signs of letting up. The brand’s peppier K10 version got its first lifecycle change in the second half of 2014 and an automated manual transmission gearbox was also plonked on to it. It is too early however to guage the effects of that. This year will tell us whether the market has accepted them. Alto has withstood competition from the likes of Hyundai Eon, Tata Nano and the latest to join the bandwagon Datsun Go, but 2014 was the third straight year of decline for the brand. Nevertheless if there is a car that can challenge Alto’s supremacy at the top in future, it can only be another Maruti.
Maruti Dzire : 210,882 units +6.34% over 2013
Like the Alto, the Dzire also had its hands full staving off competition from all around. 2013’s big success Honda Amaze was joined this year by Hyundai Xcent and Tata Zest. The strength of any brand is best displayed when times get tough and Dzire is a great example of it. Not only did it manage to grow its numbers in a tough year, it became only the third car in the history of Indian automobile industry to clock over 200,000 cars annually. In the process it also displaced elder brother Swift from the number 2 slot. With a facelift round the corner and reports of an AMT version flying thick and fast, Dzire remains the benchmark in the compact sedan space.
Maruti Swift : 202,831 units +1.75% over 2013
Since its launch in 2005, Swift has been rewriting the rules of the game in the small car segment and for now it does not seem anybody will be able to match up to it. Its fan following is humungous and every year it defies logic on how it manages to grow itself. In 2014, it became the fastest to reach a million unit mark and it looks set to power ahead undeterred. From a Beat to Micra to Polo, there are almost a dozen cars trying to queer its pitch but curiously Swift’s biggest competition is its own sibling Dzire. In 2014, it became only the fourth car ever to clock over 200,000 units in a year and though it has fallen behind Dzire and on to the number 3 slot, it is not behind by much.
Maruti Wagon R : 159,260 units +0.02% over 2013
This boxy little car has been around for decades and though one would assume it is past its sell by date, it continues to shore up the numbers. One of Maruti’s original bread and butter models, Wagon R finds itself in great demand in small towns where people will only look at a Maruti. It costs more than an Alto but its tall boy design is a great hit with families. The imminent demise of Santro also helps its case. Its CNG version apparently accounts for over 10% of its sales and is a much sought after variant in select pockets of the country where the fuel is available.
Hyundai Grand i10 : 103749 units +33.16% over 2013
The Grand got its first full year run in 2014 and was the only Hyundai car to cross the 1 lakh unit mark. The addition of a small diesel engine is largely the reason for its over 33% growth that helped it break into the top 5 and displace the Mahindra Bolero from that position. Packed to the hilt with features it is in great demand in urban centres. Its sales tapered off a little bit in the fag end of the year with the entry of the more premium Elite i20 and one gets a feeling it maybe at its peak already.
Mahindra Bolero : 102045 units -7.66% over 2013
The good old Bolero easily retains its position as India’s best selling SUV (though I have a personal problem calling it that as it doesnt have a 4WD version anymore) but its near 8% drop in sales mirrors the problems utility vehicles faced in 2014. Elsewhere in the list, Toyota Innova and Ertiga also suffered dropping out of the top 10. Bolero has always been largely a rural centric product with small towns and big villages lapping it up for its versatility. Sturdy and prone to all kinds of abuse, Bolero and Scorpio are two products that are built to last in the Indian context. A second straight year of 1 lakh plus annual sales underscores its huge appeal in some sections of the market. You may scoff at its archaic design and lack of refinement but there is no denying a Bolero can do what a lot of other vehicles cant–take bad roads head on with 16 people squeezed inside.
Hyundai Eon : 80346 units -10.69% over 2013
The Korean company’s entry level car registers a not surprising 10.7% decline in sales clearly highlighting that its 1 litre version introduced last year is not even a patch on the success of Alto K10. Nothing takes away from the fact that it is the most modern and refined entry level car in India but it falls in the Maruti territory. Even a Hyundai can struggle there. Its noisy engine and notchy gearbox are some of its pitfalls but Eon’s lack of numbers essentially show that India does not trust Hyundai as much as a Maruti.
Honda City : 77320 units +259.16% over 2013
For a long time, Honda City has been the benchmark for mid size sedans. That tag came under a cloud in the last few years when diesel cars ruled the roost and the City suffered at the hands of Hyundai Verna and VW Vento. In January 2014 the inevitable happened. City got a generation change with a not so different exterior and a vastly improved inetrior but more than that, it got Amaze’s diesel engine. The results are there for everybody to see. Even though the 260% growth is just a statistical tomfoolery (it was out of production in the last 3 months of 2013), there is no denying the City is back. At #8 in the list, it can still climb higher and has already decimated competition in its own segment. It has its weaknesses–build quality has deteriorated and the diesel engine is very noisy and not very refined–but even then it will take one heck of a product to displace City from the perch.
Maruti Omni : 74498 units +21.99% over 2013
Omni shares its birthday with the Maruti 800 and while the latter rests in its grave, India’s best known van trudges along fine. From ferrying school kids to milk cans and farm produce, Omni is at the back bone of India’s last mile connectivity and ubiquitous in the country’s nooks and corners, highways and bylanes. It doubles up as a swift and efficient people carrier for short distances to a cargo van and the versatility is its biggest USP. Maruti does not offer a paisa discount on this nor does it occupy any mindspace in its marketing spends and yet it is the company’s fifth largest selling vehicle. And it has been so for quite sometime now. Stricter emission norms may put an end to its story in 2017 but for now the Omni is happy in its own place.
Hyundai Elite i20 : 69116 units -3.72% over 2013
The Elite i20 is without the car of the year and its low ranking in this list is only down to the fact that it came into the picture only with 4 months left in the year. Hyundai gave a complete makeover to the i20 with the Elite making it so outrageously stylish that there was no scope it can fail. With over 50,000 bookings in 3 months and a waiting period stretching up to 4 months, Elite has been outselling its cheaper counterparts –Grand i10, Eon and Xcent–for the last 4 months. Expect this car to go up much higher in 2015–a top 5 slot may not be too much to ask.
The others : Maruti Celerio a new entry at #11 with 67616 units, Honda Amaze at #12 in its first full year with 65501 units +20% over 2013, Maruti Ertiga at #13 with 61153 units down 1.7%, Toyota Innova displaced from the top 10 and at #14 with 59450 units down 5.9% and Ford EcoSport also in its first full year at #15 at 51,068 units up 51.53% over 2013.
There was a time when the mere mention of Nano–Tata’s wonder car–would receive a barrage of cacophony. It would make big headlines, induce zealous TV anchors to shriller tones and compel car reviewers to find bigger better adjectives. Read more
We all know driving in Delhi is one of the more dangerous activities one can do. In 2013, 1530 people lost their lives due to fatal accidents in the national capital, the most in any city in the country by some distance. Read more
In 2013-14, the most ubiquitous car on Indian roads–Maruti Alto–completed a full decade of dominance in the market. It first reached the pole position in 2004-05 when it ended the more than two decade rule of its predecessor Maruti 800. It is not a mere coincidence that as it celebrates 10 years of leadership in the year that also marks the end of the road for the M800. Read more
Globally, vehicle recalls are a part and parcel of automotive business. Every responsible manufacturer does so for reasons as grave as potential brake failures or airbag malfunctions to seemingly trivial stuff like a defect in the power window switch.
An estimated over 40 million vehicles have been recalled worldwide in the last 10 years (see table). Most of these are in developed countries like US, Canada, Mexico and Europe where there are stringent checks and balances on non reportage of defects in a vehicle.
In the last 5 years for example, recalls have become a major flashpoint in the US. In 2009, Toyota Motor Corp, which had just become the largest car maker in the world, faced a Congressional probe for delayed response to problems with brakes and floor mats in vehicles that could cause the accelerator to become unstuck. It subsequently recalled 10 million vehicles in what remains the largest such exercise till date.
In a mirror image of the Toyota conundrum, General Motors is facing much flak from US for delayed response to an ignition problem on its Chevrolet, Pontiac and Saturn vehicles that could prevent the airbags from getting deployed. The company apparently knew about the problem back in 2007 but dilly-dallied on its response. At least 30 accidents and 13 fatalities have been reported due to this in the last 10 years. GM now faces embarrassment and a potential million dollar penalty. A speedy response could have saved some lives.
What these instances prove, more than anything else, is that for all the technological prowess car companies harness, mistakes happen. From a Porsche in Germany to a Proton in Malaysia or Geely in China, everybody has to recall cars at some point of time or the other. No manufacturer can claim to make zero defect, perfect cars. And there is no shame in recalling a bad apple. It only shows you are responsible.
But for long, recall was considered a bad word in India. Till 2010, there are very few instances of manufacturers voluntarily recalling their cars here. The absence of mandatory recall laws meant there was no compulsion either. It created a vicious cycle. If some company went out of their way to recall a car out of transparency, it was seen as a sign of poor quality, bad practices and faced the ire of consumers. It made manufacturers cagey about recalling cars.
Nobody can claim we have perfect cars in India. In terms of quality we are perhaps not even half way there as US or Europe. And not all of it can be brushed under the carpet on price. We live with fewer features and lower safety and emission standards that bring down the price of vehicles anyway. If sophisticated factories in Germany or Detroit cannot make defect free vehicles, there is no reason to believe a factory in India can do the same. Sounds condescending, but so be it.
In the past, manufacturers would also identify defects and some would even replace the parts quietly when the cars came to the service stations for periodic maintenance. It served their purpose (a clear conscience perhaps) and to some extent that of consumers as well. But not all cars go to authorised service stations in India and so that discreet way was not foolproof. The need for a mandatory recall provision has been felt for long. And for long, it never materialised.
Thankfully though, there has been a marked change in stance in the last 4 years. Largely due to the deluge of recalls in the US and the explosion of media in India, manufacturers have become more confident about recalling cars here. The consumers today are more aware about recalls happening in other parts of the world and more willing to accept it as a goodwill gesture when it happens in India.
A decade ago, the recall of 972 units of the Ford EcoSport barely a week after its launch would have meant hara-kiri. Today, there has been absolutely no impact as consumers are emboldened by the fact that they are taking home a safe vehicle and that the manufacturer would still be working to find out if there are any belated defects even after it has exchanged hands.
Since 2010, almost 800,000 cars have been recalled in India. Last year was a watershed year of sorts with at least 11 instances of recalls. A lot of ground then, has been made. And as the Ford EcoSport’s example clearly suggests–recall isn’t a bad word anymore.
Yet a lot more ground still needs to be made. Our cars may not be as sophisticated as the ones in US and Europe and as consumers we may not be as paranoid as in US either, but there are still a lot of issues that need attention. Home grown car makers like Mahindra and Tata are still averse to calling their service campaigns as recalls. Famously, Tata never called its exercise to retrofit more safety elements on the Nano as a recall even when prima facie, it was one. Similarly, Mahindra vehicles are notorious for inconsistent braking. Yet, there has been only one instance when it has actually offered to replace them carte blanche.
Even on Wednesday, when Toyota recalled 6.58 million vehicles globally, its Indian subsidiary shied away from using the R word. And it happened a day after Maruti remained tight lipped about a problem in its compact sedan Dzire that merits a recall.
After four years of progression, this new found fear of the R word is not only regressive but also perplexing. I just hope it is not the start of anything more sinister.
Early morning on Sunday, a 25 year old youth, high on alcohol and a misplaced sense of power, rammed his speeding car into an auto driver and then into a road side tea stall. By the time the Chevrolet Cruze came to a stop, two people were dead and three others grievously injured. Read more
The government’s decision on Monday to reduce excise duties on cars, SUVs and MPVs across the board was so unprecedented that it has created a peculiar problem for the industry.
While the reduction in taxes was much needed and the industry had been lobbying hard for it over the last 6 months, the inventories piled up at with the dealers that were charged at the higher rate of duty is a headache for the manufacturers. And as the sales have been underwhelming over the last 7-8 months, unsold stocks are high both with the dealers as well as the companies’ own supply chain.
On an average, any car maker carries with itself an inventory of 2 weeks and in an ideal situation–10 days. But estimates suggest that currently the inventory level is at least 6 weeks and in some cases stretches to over 10 weeks. In effect, there are some companies where stocks dating back to 2013 are still unsold with the dealer.
On any given day, these cars are a problem and could be very difficult to liquidate. And in cases like this one, when taxes go down, it assumes significant financial implications. While the company and the dealer has paid a higher duty for the car as excise duty is charged at the factory gate, when it actually gets to the intended customer for delivery, the prices would change and customer would be obliged to pay the lower value. It is a situation that results in a windfall when excise duties go up but it turns into a loss to be absorbed when they go down.
Considering that around 150,000 cars are stuck as inventory across the country and the average ex-factory sticker price of a car is Rs 6 lakh (mind you it would include the marquee super cars as well), the entire industry is sitting at a potential loss of Rs 360 crore. This amount would either have to be absorbed by manufacturers entirely on their own, or in conjunction with their dealers. Or, some manufacturers could be inclined to pass on only part of the excise duty reduction to the consumers to account for the loss in inventory.
The peculiar problem is the reason most of the companies have gone into a huddle and were not able to decide by how much prices ought to be reduced. As a car buyer, if you were waiting for the budget you may now laugh your way to the bank at the expense of your manufacturer.
For the domestic automotive industry staring at a second straight annual decline in sales, the Auto Expo could not have come at a more appropriate time. The impact of the sundry concepts and launches on actual revival in demand may yet be notional but for motoring enthusiasts and scribes like us it has given good fodder to chew upon. Read more
With an estimated 70 new models and concept cars set to be unveiled – 15 of them for the first time globally – this year’s Auto Expo, which opens to public on February 7, couldn’t have come at a better time for the Indian auto industry. Read more