luxury cars - All revved up?
Indian luxury car industry is all geared up. The reason is
the launch of Hyundai's Sonata and Honda's Accord,
which will create a whole new era of D segment luxury
cars. And the market will be aggressively competitive despite
the low passenger car volumes - a modest 5,000 to 7,000 cars
a year - with car giants like Honda, Ford and General
Motors promising to dish out new and more powerful cars.
The Indian car market has definitely come a long way in the
past two decades. Fifteen to twenty years ago, Ambassadors,
Premier 118s and
Fiats held court. However with the intervention of Sanjay
Gandhi, Maruti Suzuki came to India. In 1989 - 90 came
the Esteem priced at Rs 4 to Rs 4.5 lakhs. Following
it, were the Escort, Mitsubishi Lancer and others.
And the last two years have seen a phenomenal growth in the
A and B segments with the entry of the Matiz, Indica
and Santro. Then came the sensational Qualis
launched by Toyota. Despite a disadvantage in appearance,
it is often sported as a status and prestige symbol.
As of now there are four dominant segments. In the A segment,
there's Maruti 800,
Fiats and others. In the B segment, there's Santro, Matiz
and Tata Indica. Ford Escort, Mitsubishi Lancer, Ford Ikon,
Mercedes and others are the ones in the C segment.
But with bigger and highly disposable incomes, with people
who most often travel in Opel Astras and Honda Citys
willing to graduate to more expensive cars, the D segment
car manufacturers have chosen the right time to make their
presence in the market. Two companies that have made an entry
of late in this segment are Hyundai with the Sonata
and Honda with the Accord. These giants believe that
their target audience will not mind shelling out Rs 12-16
lakh for experiencing the best of the automotive sensation.
The price war that
has begun with these new entries had its beginnings with the
launch of the Mercedes C class, priced at Rs 19,90,000
(ex-showroom, Mumbai). Before this, all that was required
was to pick an exact price from the huge gap that existed
in the market between the most expensive car - Mercedes Benz
S320L at Rs 62 lakh (their least expensive until recently
was the E220CDI priced at Rs 30,46,509) and the next expensive
one was the Mitsubishi Lancer variant priced at Rs 9,94,719.
Comparing prices from launch of the Esteem, a definite trend
shows that prices drastically increased by Rs 6-8 lakhs with
every new launch.
But the introduction of the Mercedes C class changed the
whole pricing gamut. Even
the Honda Accord, despite being in the D segment, is priced
Rs 5 lakh below the C class. However the group can bank on
its international popularity and brand status in India, to
give them a head start. It is also a more powerful car with
a 2.3 litre engine. All these factors perhaps give it an upper
hand over the Hyundai Sonata.
However Hyundai is also a very strong brand in India thanks
to Santro. It launched the Sonata in mid-July with a pricing
of Rs 12-13.4 lakh. With over two lakh cars in the Indian
roads, Hyundai can today boast of an unparalleled product
support network, says Hyundai Motors Director (Marketing)
BVR Subbu. He is confident that the Sonata would be a
great success in India.
Despite their recent launch, both the cars have done exceptionally
well. Accord, within a few weeks of launching, had
already sold 300 units. And according to sources, Sonata
has created enough interest within 10 days of its launch for
Hyundai to deliver 55 units in July alone. This spurt in sales
clearly indicates the interest and the excitement that has
been created in the car market. Now we shall await the much
talked about car - Ford Mondeo. Here's cheers to a
revved up industry!
|Source: The Economic
Times, Business Today and others