Slowdown for some, fireworks for others

Consumer buying patterns has forced automotive comapnies to struggle to stay afloat even as their competitors charge ahead

Paradigm shift in buying patterns of the consumer has led to a significant upset in traditional rankings with some automotive companies struggling to stay afloat even as their competitors charge ahead.

The dismal performance by Tata Motors during the year after the failure of series of products like Aria, Venture and Winger has cost the company as it lost the third spot to Mahindra & Mahindra and later the fourth spot to Toyota Kirloskar.

While M&M grew sales by a robust 28% to 282,275 units till February this financial year riding on the back of new launches like Quanto and XUV500, Tata Motors posted sharp drop in sales across segments.

Sales of small car Nano declined by over 18% to 52,341 units in the period.

In February itself sales of the Nano crashed by a whopping 84% to 1,505 units from sales of 9,217 units registered in February 2012.

Two-wheeler major Honda made rapid gains in India and within 12 years of its debut dislodged TVS Motors and later Bajaj Auto to claim the third and second spot, respectively, in the list of India's largest two-wheeler manufacturers.

The Japanese brand in now challenging market leader Hero MotoCorp's stranglehold on the Indian market and predicts to surpass the Munjal-family led company by 2015, a full five years ahead its earlier set target of 2020 if the slowdown persists in India.

Honda's share presently stand at 18.6% while Hero commands a share of 43%. However, the story does not end here. More such examples emerge in different segments where incumbents have been challenged by newcomers resulting in their position loss.

French car maker Renault riding on the success of the Duster overtook sales of alliance partner Nissan and European car makers such as SkodaAuto and Fiat in India, despite its noted exit from the loss-making joint venture with Mahindra & Mahindra.

Renault, which sold 2,661 units between April-February the last financial year, increased volumes 15-fold in the same period this year with sales of 44,231 vehicles. Nearly 75% of its volumes came from only the Duster sports utility vehicle.

What is also notable is that Renault has surged ahead of car makers such as SkodaAuto which commenced operations in 2001 but yet only command market share of 1.11% after a 12-year stint. After several years in operation Italian car maker Fiat is still struggling having a share of 0.27%. Renault's share stands at 1.82% ahead of partner Nissan at 1.43%.

While high demand for utility vehicles pushed M&M ahead of Tata Motors in passenger vehicle segment, M&M has also trumped Ashok Leyland to become the country's second largest commercial vehicle manufacturer.

Mini trucks such as Maxximo and pick up like the Genio have garnered new volumes for M&M. Chennai-based Ashok Leyland, a market leader in buses has made a late entry into the light truck segment with the Dost, whose ramp-up is at a nascent stage. The general slowdown in demand has hit Ashok Leyland harder as its portfolio heavily depends on medium and heavy trucks.

M&M's share in the CV segment stands at 18% while that of Ashok Leyland is at 13%. Tata Motors remains the leader in the segment with a share of 56%, as of February.

Meanwhile, Venu Srinivasan-led TVS Motors is struggling to keep pace with the market even as the company lost its position in the scooter segment to Hero MotoCorp. Hero is now the second largest player in scooter category while TVS slipped to third. TVS was the market leader in scooter segment before Honda made its entry with the Activa.