All but three passenger vehicle players lost their market share during FY16. While some of the players like Honda Cars and Tata Motors and Toyota have clearly lost some share, M&M and Ford are among the ones who have struggled to maintain their share, but lost marginal territories. Analysts point out that the loss and gain in market share has become more dynamic these days and revolves mainly around successful launches while significant long-term gain has more to do with strategy and reach of carmakers.
French carmaker Renault, which gained some share on robust volumes for its entry-level hatchback Kwid.
Maruti and Hyundai’s launches in the year, mainly the Baleno and Creta, served as a boost for their sales, apart from their older models like Alto, Swift, i20 and Grand i10, which have also continued to perform well. The other popular launches included Honda Jazz, Mahindra KUV100 and TUV300.
“Essentially what has happened in the last couple of years is that volumes have largely revolved around successful launches. Therefore, wherever there is a gain in share, you will find there has been a recent successful launch,” Kumar Kandaswami, senior director, Deloitte India, said.
Abdul Majeed of Price Waterhouse added that apart from successful model launches, what’s needed to sustain market is periodic new launches and upgrades.“No matter how big a player is globally, if there is no India-specific strategy, they will not be able to gain in the Indian market,” he said.”
At the same time, six of the 13 carmakers analysed reported decline in volumes in the year, compared to a decline for eight companies in the previous year. Of those witnessing a decline, Tata Motors, Volkswagen and General Motors have seen a fall in volume in both the years. The SC-imposed ban on the registration of vehicles having diesel engines of over 2000cc capacity has also had a significant impact on players like Tata Motors and Toyota, which have popular models that have come under the ban. While M&M, another OEM heavily dependent on 2000cc plus engines, introduced a 1.99-litre engine for Scorpio and XUV500 in the NCR region, Toyota and Tata could not make any such move.
During the year, M&M’s share in the utility vehicle market fell to below 30% in July and August. However, in the subsequent months, it regained its lost share with the launch of TUV300 and KUV100 in September and January, respectively. In the utility vehicle market, Hyundai’s Creta turned the dynamics upside down with jumping from a share of less than 1% in May to over 15% at the end of the year. With the launch of the Vitara Brezza in March and looking at the initial response to the compact SUV, Maruti is likely to gain further in the utility vehicle space as well as the overall passenger vehicle pie.
“Unlike the past good years, where longevity of a model was quite high, it is just that whenever there is a new launch, a lot of people tend to look at that. Look at the bookings that Kwid or Baleno had. It’s not about any brand or OEM, but about how the market has reacted to new launches,” Kandaswami said.