Indian Car Industry goes Automatic.The Future-AT

It took nearly two decades for the Indian Consumer to understand the need and importance of an automatic transmission car. Amongst the first few companies to bring Automatic Transmissin to India was Daewoo back in 1997, AT is still the lesser loved one from its sibling Gearbox MT(Manual Transmission) as far as Indian consumer choice is concerned. The shift will happen soon , infact it has started to happen it will turn the tables in the next 7 years in favour of AT provided all the manufacturers understand the need and indian consumer mindset. As on date AT car sales are 1 percent of total car sales in India. 

As always Maruti being the leader introduced a clutch less car which is nothing but an AT car , Celerio- A perfect car , Right segment to hit, and a pricing that couldn't have been better , they have also managed to hit the nerve of Indian consumer, a perfect answer to the question , kitna deti hai ? Claiming an average of 25kmpl , I think Celerio is one of the best combination in an AT any manufacturer has configured till date in india keeping the need of Indian consumer in mind. No one ever thought we could drive an AT on a price of 4 lakhs. For the first time in the history of automobiles in India AT had more bookings than MT , The very first day of launch of Celerio on 6th feb 2014 MUL dealers Booked 1000 cars out of which 51 percent were AT. 

Misconceptions about an Automatic Transmission Car - 

1) It's complicated and difficult to drive- It's a wrong notion , as nothing can be simpler and better than driving an AT , as you don't have to change any gears or press any clutch as there is none. Simply accelerate and brake and stop whenever you want. 

2) Lot of traffic in city what will we do with AT- My dear friends AT is suitable in a more traffic situation as a driver you don't have to change gears again and again and press the clutch at various speeds and while stopping , so you won't feel the fatigue of driving in a traffic situation . 

3) It gives v less mileage - Yes definitely it gives lesser mileage than a MT , but the difference is not much 2-3 kmpl not more than that , on the highway the difference is lesser, this difference is worth the comfort you are get from driving an AT

As a customer our limitations are that we don't have many options to choose from, but the change is definitely coming which can be clearly seen by the demand and sales of Fortuner AT , Verena diesel AT , all high end luxury cars come only in AT versions. Now Maruti has taken a step with Celerio to penetrate into the mass and I am sure MUL will be successful in doing it. The other model and brands AT which comes in various companies are not so successful for two reasons that either they are too expensive or they are only in petrol and that too claiming a v less mileage. The manufacturers need to understand that India is a price sensitive and a kitna Degi obsessed market , till now the manufacturers producing AT small or mid size cars have never focused on these two factors , their thought process is that AT is meant just for the super rich elite class . It's time now the thought process should change. 

The emerging India is young and have a good purchasing power apart from being educated and smart. They need and deserve all the comfort possible. The Auto industry can definately derive much higher volumes in AT cars , only if they start producing diesel AT cars for the mileage sensitive consumers and low priced petrol AT cars for the price sensitive consumer. Current example of successful AT cars with right engine and price configurations are - Fortutner AT price 25 lakhs approx , Ford Eco Sport AT price 10 lakhs approx , Celerio price 4 lakhs approx , All of these cars are over booked and have a waiting period . This clearly shows Indian consumer is smart enough and if the product has the right configuration we have the capacity to buy either it's a 4 lakh product or a 40 lakh product . We call it the power of Emerging Indian Consumer. 

RIP Honda Accord and VW Passat !

Accord and Passat the Flagship Saloon models of Honda and VW respectively are no more in production now and have been official discontinued. Sources reveal that they will not come back in the market before 2016, so the Passat and Accord lovers will have to wait and watch for sometime. 

The main reasons for the giants to discontinue their flagship saloon has been depreciating Rupee, increasing cost of production , v high pricing and tough competition from German Luxury car makers . Accord in a 2.4 ltr petrol engine was priced at around 25 lakhs where As Passat 2.0 TDI top variant used to be around 31 lakhs , A person spending 25 lakhs or more has a lot of options namely An Audi A4,Q3 or may be a BMW X1 , 3 Series, 1 Series or even a Mercedes A class, B Class, C class .It should be understood  that consumers and the ruling young generation of India is becoming brand conscious, If I can spend I want to be in a niche segment or own something exclusive not a brand which is owned by many. A person having a High income becomes a Honda Accord owner no matter how wonderful the car is but the fact is a person with an average income is buying a Honda Brio and is driving the same brand which the high income level person is driving. It misses the exclusivity factor.A mass product can never be a Niche product and vice versa. No wonder why Maruti and Hyundai have never been successful with Highend top premium Cars , All their high end cars have not done well ever in comparison to competitors viz Baleno, Grand Vitara, Kizashi, Elantra, Terracan, Tuscon, Sonata etc . They need to understand that they are a mass brand and not a premium brand . One can not be masters in every field , Either we can cater the mass or we can cater the niche . We need to understand the exclusivity factor when dealing with a high end product or brand .

Both the cars Accord and Passat together have sold less than 500 units in past 7 months, The factories and dealers have wiped out their stocks . We need to wait till 2016 when we assume Accord and Passat will be launched with a complete makeover in the bodyshell , interior , engine . I won't be surprised to see the diesel Honda Accord ! Let's keep our fingers crossed :)

Preowned Cars in India - Getting Organized and Booming ! Big Passenger Car Players focus on POC business to increase Profitability .

The Automotive Industry might be on a decline but there is some sunshine amidst the heavy rain , There are two sectors in the industry which are growing at a good pace and have still a very long way to go , The High End Luxury Car Segment and the Preowned Used Car Segment.

A data collection source indicates that in America for every 1 new car sold there are 3 used cars sold so the ratio is 1:3 where as in India this ratio is still at its infant stage 1:1.2 new:used , used car industry has surpassed the new car industry in India as well and this will go up to 1:2 by 2016 so for the (POC)Preowned car industry there is still a long way to go. No wonder we can see most of the new car manufacturers getting into the used car segment as well along with big multi branded Preowned car companies . It is rightly said the more the merrier so the more players coming in are making the segment more organized and hence increasing the numbers and trust of Indian consumers in the used car segment . The main  reasons for used car industry to lag behind in India has been its unorganized nature and unreliable broker network multiplied with factors like bad Indian road infrastructure and not so state of the art workshops and unskilled workshop manpower at various levels which results in deterioration of the condition of the vehicle much faster than it should , To top it up the Indian consumer sentiment of buying a new car and not a used one.

All of the above is changing fast , it is improving with good roads being built , express ways , companies investing on better technology , R&D and trying to hire trained and educated manpower , imparting technical know how and training them, it simply means less wear and tear in the vehicle.

The Manufacturers can foresee a lot of growth potential in the POC business hence to increase volumes and profitability all of them are trying to establish a strong foundation in this category of business, Maruti as always being the leader and having the first mover advantage launched Maruti True Value years back , Following their footprints are other manufacturers with their respective used car business models - Hyundai Advantage , TATA Assured, Honda Auto terrace , Chevrolet Certified , Ford Assured and  Toyota U Trust. This clearly indicates the focus of companies in the used car business and it's ever increasing scope in India as the POC industry in India is still at a nascent stage.

The Luxury Car Makers are not far behind , Most of the popular brands like Audi, BMW and Mercedes have a Preowned car section in their showroom to buy and sell Certified Preowned cars with warranty. For retention they also provide the new car buyer with a handsome amount of exchange bonus or offer programmes like Upgrade Challenge etc 

Their are not only brand specific companies jumping into this business but a few multi branded companies selling all cars under one roof are also trying to establish their names in this particular industry viz. Mahindra First Choice formerly known as AutoMart , Car Nation being run by Mr Jagdish Khattar. All these are at a National Level, The B towns and city specific dealers are also becoming brand conscious and organized. They are understanding the need of the hour and voice of the consumer and advantages of Selling a Certified Car from a branded showroom. At a city specific level there are famous brands like Big Boys Toys and AutoBest in New Delhi, The Car Mall is a famous brand in Agra, UttarPradesh and many more such names are there who believe in selling Certified Cars in an organized manner as they want to differentiate themselves from the unorganized used car broker market.

This would be the future of Used Car Market in India, I forecast 5-7 years down the line it will be all organized , if not all at least most of it, People would not hesitate to buy a Used Car from a branded Showroom which sells a certified Car with some quality Check, Assurance and may be warranty aswell. Banks are also joining hands with Used Car brands to provide Easy Finance to the Consumer. Used Car Segment will eventually be the winner against the New Car Segment, and will always Lead, The people adapting to the change will be the winner  in their business, very rightly said by Mr.Shiv Khera ," Winners don't do different Things, They do things differently"

Interim Budget - 2014 -Excise Duty Cut - Ease for the Consumer Burdenfor the Manufacturer

Interim Budget announced on 17th feb has some good news for the Auto Industry customers ! The government has decided to reduce the excise duty in the auto sector to boost the declining sales but this means that the manufacturers will have to take the dent of financial burden on them for the unsold stock lying at their respective dealers

Our car industry carries inventory of about 45 days production at dealership , transit and at Godowns . We have around 17 passenger vehicle manufacturers giving an output of around 2.5 million units every month , this adds up to approximately 14 - 15 million if we take in account two wheelers , 3w and  CVs aswell . As per data collected source indicates that this will add up to a financial burden of Rs600 crores for listed companies and for the entire industry it will be obviously much higher .

The dealerships are not in a position to take such dents  ever so these are always absorbed by the manufacturer as the dealer has no option but to charge the reduced pricing from the buyer 

The excise duty has been reduced by 3-6 percent across various sets of vehicle , the prices will be reduced starting from 3000 in entry level segment to a few lakhs in the top premium segment . A similar excise cut happened in 2008 aswell to boost the demand in the auto sector. 

This step definitely will boost the demand and increase the numbers of auto industry but will those numbers be sufficient to set off the excise cut financial burden being absorbed by the auto companies ! How long will the industry take to set off the burden ! Should the government have a provision to adjust the excise duty being charged on the unsold stock lying with the manufacturer or dealer unless billed to the consumer !

Superbikes Getting Hot in India- Auto Expo 2014

No matter how much slow down the Indian Auto industry might be facing but there is one segment which is getting hotter and better,  The Super bike Segment. Global Players like Harley Davidson has also started taking India seriously as they can forecast good chunk of sales number from India, They have left no stones unturned with the launch of Street 750  at an aggressive pricing of 4.10 lakhs Ex showroom to dig out real volumes from India, They have left their competitors astonished and all are wondering how could Harley manage to launch a bike at such a price keeping in mind Indian taxation structures at various levels !!!

Even the Indian Manufacturers are trying to make an entry in the 250 cc plus Segment , Bajaj displayed the muscular and stunning Pulsar CS400 and its faired sister the SS400.
Hero was not behind in fact a step ahead , they displayed a futuristic 620 cc Hero Hastur Concept. This clearly indicates even the Indian manufacturer are seeing future in the Super bike Segment as we have never seen them so focused on high engine power bikes, Is it the New Emerging India which is more obsessed with Power than Mileage !

Coming to Honda, they had their full Superbikes range on display from the CBR to the GOLDWING,

Japanese Motorcycle Manufacturer Suzuki showcased and Launched V Storm 1000 priced at Rs.15 Lakhs, Exshowroom, they also displayed other current models like the Hayabusa and Intruder

Now Lets talk about the South Korean DSK Hyosung which I feel is the most affordable Superbike Manufacturer in India, They displayed the GT250 R, GT650 R and ST7, Aquila Pro, GT650 Naked and launched the most awaited Cruiser GV250 Aquila, pricing it at 2.69 Ex showroom Delhi. Its a V twin cylinder with 27 BHP of power combined with good looks though I feel its slightly over priced, A price just below 2.50 Lakhs would have been an icing on the cake. But I am impressed with the use of lots of good quality chrome on the bikes, they have also used a v stylish chrome speedo meter which looks very trendy on the bike, We need to drive it to comment further on the product however the overall picture does look positive.

The British Triumph Motorcycle also launched Supersport Triumph Daytona 675 at 10.15 Lakhs, Exshowroom, Delhi, Its a 3 cylinder 675 cc Engine with 126 BHP of power, The Britisher now has 11 models for sale in the Indian market belonging to different categories namely classic, roadster, cruiser, sports and adventure

Besides the motorcycles displayed by the Italian Aprilla and Moto Guzzi, Piaggio will also launch Aprilla Shiver 750 this year, so we expect some action from the Italian motorcycle maker as well in 2014 for India

I remember times people used to say Superbikes in India , Are you kidding me !!! Now being an Indian I am glad to see the Americans/ British/ Japanese/Koreans/Italians and the whole world trying to lure and fascinate Indian youth by displaying the best of their bikes.

The kind of display and launches most of the motorcycle manufacturers had at the Auto Expo clearly indicates the Superbike segment is going to rev up and get even hotter, All we can say is that it is youth getting into Driving seat now, We Call it the Powerful India which needs power and adrenalin boost. We can surely expect huge growth in this empty segment in a few years to come, But who will have the early mover advantage !!! We need to wait and watch .