General Motors India, it seems, is shifting gears: from manufacturers of bigger sedans and sport utility vehicles, the company’s focus seems to be shifting to smaller cars. This is evident as the company is losing grip in the mid-size and executive car category, where it is present through Chevrolet Aveo and Chevrolet Optra respectively.
While GM India?s market share in the compact car segment has gone up from 3.65% in April last year to 4.14% in February this year, in the case of the executive category (Chevrolet Optra), it has come down from 12.6% in April to 3.04%. In the mid-size sedan category (Chevrolet Aveo), the company?s share has slipped from 1.91% to 0.63%.
GM India had forayed into the domestic market with Chevrolet Forester, a high-end sports utility vehicle, followed by Chevrolet Optra.
?There is a steep competition in these two categories (executive and mid-size sedan). Since GM India has not reworked its product portfolio in the segment for quite some time, the company has failed to draw attention of buyers, who are more attracted to new products like Honda City, Maruti SX4 and Swift Dzire, which have a well-established brand equity in the market,? said Vaishali Jajoo, senior auto research analyst, Angel Broking.
According to the Society of Indian Automobile Manufacturers, on a year-on-year basis, sales of Aveo have gone down by 64.27% in February at 149 units, as against 417 units in the corresponding month last year. Sales of Optra have declined by 75.28% at 89 units last month, vis-?-vis 360 units in February last year.
The two segments have, however, seen an increase in sales on the whole. The mid-size sedan segment, which includes Honda City, Maruti SX4 and Dzire, and Tata Indigo, has seen a jump of 45.1% in sales at 23,768 units in February, as compared to 16,381 units in the same month last year.
Likewise, the executive car category, which includes Fiat Linea, BMW 3 Series, Mercedes C-Class, Skoda Octavia and Laura, and Toyota Corolla, has also registered a growth of 4.5% at 2,926 units last month, vis-?-vis 2,799 units in February 2008.
?Over 75% of the passenger car market is dominated by compact cars. Hence, there has been a shift in strategy for GM India, wherein the company is focusing more on the volume rather than value segment,? noted a Mumbai-based analyst.
?As interest rates continue to be high, there is not much demand for bigger cars and it will not be before the middle of this year that demand bounces back to normal,? said P Balendran, vice president, GM India.