Indian Automobile Industry:

The Indian automotive industry is about 3.6 million units huge and Maruti Suzuki and Hyundai have become the two automakers that has continued to dominate the market. In the initial months, April-August, of financial year 2017-2018, the two companies have increased their market share from 64.15% in the corresponding period of last FY to 67.29%.
In FY 2015, the companies enjoyed dominance over 61.18% of the market which rose to 64.14% in the next fiscal year FY16.

Maruti Suzuki’s market share strength continues to surprise us. With a strong order backlog (four-five months for new models) and a healthy launch pipeline, there is high demand visibility for the next two years. Hyundai also makes up for loss in car market share by reporting 13% market share in UVs, with Creta sales averaging a staggering 10,000 units per month,” said analysts at Axis Capital in a report on the sector.

Reason behind their dominant market hold:

The reason why Maruti Suzuki and Hyundai control such a big number of the market is that their vehicle range in the utility vehicle space are well liked and received by the Indian population and also, other carmakers like Honda, Ford, Mahindra and Mahindra are taking a hit because of their weak performance.

In FY 2012, Mahindra and Mahindra (M&M) commanded over 55% market share in the Utility Vehicle (UV) segment. While, in the first five months of this facial year, it’s market control slide down to just 25% in the UV space. It’s two new launches in the space- TUV 300 and KUV 100 did nit hit the markets well and hence, their sales remained slump. It received cut throat competition from Creta by Hyundai and Vitara Breeza from Maruti Suzuki.

Honda launched Jazz (hatchback) and BRV (Compact Utility Vehicle) but both those models did not bring back exceptional sales to the car-maker. The new version of the City range and WRV (Compact Sports Utility Vehicle) have helped the automaker to increase its sales volumes but they are nothing in comparison with the peak period Honda experienced in the FY13-14.
In FY17, Renault Kwid did create a good market for the French carmaker. During that period the company sold 10,000 units per month but the volumes have started to dip in the current financial year. In the first five months of this FY the sales figures dropped by 21.2%.

The third biggest automaker of America, Ford, is struggling to churn impressive sale volume in the Indian Market. It manages to sell 7,500 to 8,000 units on monthly basis but 75% of its sales comprise of exports. The carmaker has yet not tasted the same success as it did with its Ford EcoSport model.
Nissan is yet another car maker with maximum export sales but it’s performance in the domestic space is not up to the mark. It’s SUV Terrano recorded sale of 1,699 units in these five months while it’s compact hatchback range of Micra and Go brought average sales of 500 units in this period. Nissan Redi-Go, a small car space car, registered increase in sales figures to 11,328 units during the first five months.

Fiat is trying to make its comeback in the Indian markets with the introduction of the pricey Jeep Compass, but with its high price tag the volume of sales it will bring remains to be a question that would be answered over time.

Maruti Suzuki and Hyundai are themselves facing problems like capacity constraints and launch of new products. Hyundai does not have a new product launch scheduled for the next two years. In spite of this, other carmakers see, to be taking no efforts to take advantage of their weakness and capture their market.
“Well, most of the products launched by other carmakers did not generate enough volumes, barring (Tata) Tiago and Kwid. Going forward, this grip (of Maruti and Hyundai) in the domestic market will get further strengthened since these are the only two carmakers that have decade-old products in the portfolio, but still generate more than 10,000 units in a month,” opined a brokerage firm analyst.

For the first time in history the passenger vehicle market touched the 3 million mark and only Maruti Suzuki and Hyundai were the two carmakers amongst the top five brands to increase their sales volume .
While Tata Taigo came a close third by selling 5,500 to 6,000 units but Tata’s other models like the Tigor and Hexa did not contribute much to the sales figures.

 

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