While automobile sales continue to show patchy growth and manufacturers are pinning their hope on the festival season to rev up their numbers, there is some cheer as a result of new launches, which are doing well and eliciting good response from customers, as per sales data in the first five months of the current fiscal.
The top two manufacturers of passenger vehicles —Maruti Suzuki and Hyundai — have benefited immensely from the launch of their new offerings, including Ciaz (sedan) Celerio (hatchback) Elite i20 sporty (premium hatchback ) and Creta (compact SUV).
Analysts say the market has become product driven and companies that will launch new products at regular intervals will see growth in sales. The success of Hyundai Creta is a prime example of how customers look out for new products. The South Korean automobile major launched the vehicle at a time when the SUV segment was losing volumes by close to 4-5% a month. When Hyundai announced the launch of Creta, it received 35,000 bookings in advance.
Since the commercial launch in June, the company has sold 15,897 units in two months till August. Last month, Hyundai sold a total of 40,000 vehicles, its highest ever, of which one-third of the volumes came from Creta. As a result, Hyundai’s market share in the SUV segment increased to 15% from around negligible before the advent of Creta.
“In July, Creta drew more volumes than any other model in the segment and we are hopeful the vehicle will continue to do well in the domestic market. We have ramped our overall manufacturing capacity by 20%,” Rakesh Srivastava, senior vice-president, Hyundai Motor, tells FE. Elite i20, which is not even a year old, sold 52,152 units during April-August.
The launch of Celerio and Ciaz brought the same results to Maruti. During April-August, Maruti sold 35,751 units of Celerio in the domestic market. The response for the S Cross, the newly-launched model, has been good, with the company selling 6,500 units in one and half months till August.
“New models are going to drive volumes in the market, but companies need to time them appropriately and price aggressively to reap the benefits. The number of pre-booking for some new launches indicate how eagerly custo- mers wait for new products,” says Rajiv Singh of KPMG.
The newly-launched Ford Figo Aspire registered sales of 5,176 units in the first month of its launch and is expected to increase volumes in the months to come.
However, there have been exceptions too. The newly-launched premium hatchback by Honda, Jazz, saw its volumes decline by 5% month-on-month in August.
New products have driven sales for Tata Motors also. With the launch of the Nano GenX, volumes during the April-July period increased by 70.87% y-o-y. Mahindra and Mahindra launched its new compact sports utility vehicle TUV 300 on Thursday and is looking to regain lost market share in the SUV segment. Another model, code named S101, is expected in the second half of FY16.