Big players gain share of car market, smaller ones lose

The domestic car market was abuzz last year as companies launched several new products with an eye on volumes. New products, along with declining interest rates and low fuel prices, helped sales of passenger vehicles — cars, utility vehicles and vans — go up by nearly eight per cent to 2.77 million units in the last calendar year. But not every company gained market share. In fact, there were more losers than gainers.

Of the top twelve domestic players, seven lost market share in 2015. Only five companies, mostly biggies, gained market. Those who gained share were able to generate volumes from the new products while maintaining or expanding sales from the older ones. But the new product strategy did not work for everyone.

Country’s largest car maker, Maruti Suzuki, was able to close the year with a market share of 46.5 per cent, up from 44.8 per cent a year ago. During the year, the company launched two major models — S-Cross and Baleno. It sold 15,000 units of S-Cross and over 13,000 units of Baleno till November. While S-Cross was launched in August, Baleno hit the market in October. Demand for older models in compact and super-compact segments has also grown.

Hyundai, the second largest player, was able to improve share from 16 to 17.16 per cent. Apart from strong demand for existing models like Grand i10 and Elite i20, Creta, the sports utility vehicle launched by the company in July, contributed significantly to the increased volumes. It made over 36,000 deliveries of Creta till November. The South Korean auto major’s market share in India was at a record high in 2015.

Rakesh Srivastava, Hyundai's senior vice-president (sales & marketing) said the company made the right moves in terms of new products and strengthening the rural presence. “We retained existing customers by offering them value products and options to upgrade within the company. The contemporary product portfolio helped us add new customers,” he said.
Japanese car maker Honda and homegrown Tata Motors were also able to defend share though the increase was only marginal. Honda launched the new Jazz while Tata launched Bolt, the hatchback, in early 2015. A number of players — Mahindra & Mahindra, Toyota, Ford, Volkswagen, Nissan and GM — saw their pie shrink in 2015. Mahindra launched a new utility vehicle TUV300 in October last year but the company saw many monthly declines in 2015. One of the factors behind the decline was the weakness in rural and semi-urban demand that impacted sales of Mahindra’s utility vehicles.

Japanese car maker Toyota did not launch any new product last year and saw share go down marginally. Ford launched two new products — Aspire and Figo. Volkswagen’s volume started declining after news of a global diesel vehicle emission scandal in September. French carmaker Renault, which launched entry-level car Kwid at an aggressive price of Rs 2.56 lakh in September, was able to expand market share to 1.94 per cent from 1.74 per cent a year ago.

Amit Kaushik, country manager (India) for JATO Dynamics, a UK-based automotive research firm, said not every new product succeeded in contributing to a substantial increase in sales volume of companies. “New launches that met customer expectations on pricing, features and design, along with overall cost of ownership, helped companies expand the market share,” he said. The year 2016 will see players get more aggressive in the market with more launches and network expansion.

SHIFTING GEARS