Sales of Indian
automobile industry is going through some tough times as it has decreased to
the lowest when compared to the last 18 years. The worst-hit segment are the
domestic passenger vehicle sales which has seen double - digit decline which
includes Hyundai, Honda, Mahindra & Mahindra, Tata Motors and Toyota.
The vehicle sales among
all segments has declined by 12.35 per cent ( 60,85,406 units from 69,42,742
units for the period of April-June 2019) similarly the passenger vehicle sales
declined by 18.42 per cent (7,12,620 units from 8,73,490 units in the year-ago
period), whereas the domestic car sales declined 24.97 per cent (1,39,628 units
from 1,83,885 units in the year ago period) as per SIAM.
The following factors has
further aggravated the decline in sales
- Application of BS-VI emission norms from 1st April, 2020 has created dilemma in the minds of people to buy a car now or to wait till the new cars with BS-VI engines arrive
- High Bank Loans rate of interest
- Rented or shared car platforms such as (Ola and Uber)
- High fuel prices
- Stagnation in rural wages has increased the rural distress
Government is also
pushing the electric vehicle by showing how concern it is about the green goals
and cutting crude oil import bills, hence urging the industry to develop and
produce EVs In the current year’s Union Budget generous incentives were
declared for the purchase of EVs: The government has reduced the goods and
services tax (GST) on EVs from 12% to 5% as well as announced tax rebates of up
to ₹1.5 lakh on interest paid on loans to buy them no such incentives has been
declared for petrol and diesel-powered vehicles, which led the industry to
flounder.
There have been massive
layoffs. The contracts of 3,000 temporary workers has not been renewed by Maruti
Suzuki which are higher in ancillary industries such as auto components makers
and dealerships automakers are cutting cost as the purchasing power of rural
and urban India has gone down.
The slow down is seen in
all the auto segments but still there is a segment which is not getting
affected the demand for these technologically advanced cars which are coming
out unscathed from auto market these cars do not really seem to be diminishing.
Sports Utility Vehicle (SUV) are silver lining in the dark cloud for the auto
industry, new technology features in these SUVs is appreciated by customers
even in a slowing market which signals the trend that Indian consumer are
probably ready to pay a slightly higher price for more premium cars which have
internet and safety features controlled by smartphone from inside as well as
outside of car and all of them are connected with sim card having 4G
connectivity which can also be upgraded to 5G.
The two SUV which we are
talking about are MG Hector and KIA Motors. MG Hector is owned by SAIC which
launched India’s First Internet Car and received huge bookings whereas KIA
Motors is well known South Korean Brand which entered in the Indian Market
where the Auto Slump is going down south and still garnered huge bookings KIA
and MG are using value and technology and targeting the sweet spot for car
upgrades the buyback plan and aggressive positioning are some strategies which
is bringing huge successes to them.
The increase in demand of
these cars indicates the evolution in the behaviour of Indian customers below
35 years and hence they were able to make people aware about their Brand making
people shift from price conscious to value conscious.
“Our MG Shield scheme
which offers five years of free service warranty has given confidence to the customers.
Having closed the bookings last month, we have a wait list of 15,000 customers.
The new products are bringing compelling value proposition in the market and as
a result, the consumers are coming to us," said Rajeev Chaba, managing
director, MG Motor India.
MG HECTOR has stopped
taking further orders due to the reason of production constraints at the
initial stage with 28000 bookings whereas KIA has received more than 30,000
bookings in the first six weeks also no car were launched in the same segment
by big brands and hence their silence helped the new brand.
Lot of millennials and
corporate executives were looking for a new option which is met by above brand
with the international appeal and design also the category of people has deep
pockets which can afford the vehicle even in slowdown.
Kia and MG Motor has
worked a lot on marketing promotions leveraging television, digital, print and
on-ground media across the country where they have collectively spent ₹100
crore or so in the last year and half even the brand ambassador have fan
following and they are role model for millennials Benedict Cumberbatch—brand
ambassador of Hector—and Tiger Shroff for SELTOS were huge success for the
brand. The price for Kia SELTOS ranges between Rs 10 lakh to Rs 17 lakh, MG
Hector ranges between Rs 13 lakh to Rs 18 lakh.
KIA kept all basics right
i.e. product, network, price, and promotion. Indian consumer wants were
identified by doing research for at least three years before the launch and
then they came out with a tailor-made vehicle for the Indian market. Its base
price of ₹9.69 lakh made it viable for people to purchase the car. The Unique
Selling Point of KIA SELTOS as compared with other players in the market is the
competitive price with quality a connected SUV which offers about 37 smart
features including remote engine start with AC control, emergency assistance,
geofencing, tyre pressure monitoring system and navigation. The brand
associates itself with sports which represent young age where it is official
FIFA partner and had sponsored 2002 FIFA also it has various sponsorship in
cricket as well as tennis too.
KIA SELTOS is able to
attract consumers through mass media; trade shows, electronic media, online
blogging, broadcasting, brochure, flyers etc while focussing its below-the-line
promotional strategies including direct customer contact, direct mail
campaigns, sales promotions, targeted SEM and sponsorships they also have online
portal to establish and strengthen relations with customers online while
working for environmental issues by inculcating an urge among people for
planting trees.
MG HECTOR holds over 50%
market share in its segment within few months of launch. The unique as well as hi-tech
experience which it is delivering is the reason for becoming consumer favourite.
It is to be noted that HECTOR is the first car in the country which is delivering
over-the-air software updates directly to the car’s head unit.
The introduction of
Internet cars along with the introduction of luxury car features in the mass
and premium segments has attracted many people to these brands HECTOR has also invested
₹2,200 crore in upgrading its manufacturing facility in Gujarat (Halol), and the
investment for the upcoming three-four
years will reach ₹5,000 crore as said by Rajeev Chaba, president and managing
director, MG Motor India
The brand gives the
options for multiple fuel available in automatic, hybrid, petrol, and diesel
while rivals like Tata Harrier and Mahindra XUV500 are limited to diesel.
“Hello MG” is a voice
command feature which allows you to operate the sunroof, windows and air-con,
apart from infotainment functions. In terms of safety it has features like six
airbags, LED headlamps with LED DRLs, front/rear parking sensors with 360°
camera, traction control system (TCS), electronic stability program (ESP), ABS
with EBD and brake assist, all-wheel disc brakes, and is of fix child-seat
anchors.
MG HECTOR price range is
between Rs 15.28 lakh to Rs 16.78 lakh, other features such as space, comfort,
premium feel and a road presence where the price offered is great
value-for-money compared to its competitors 5-year/unlimited km standard
warranty and roadside assistance with different maintenance plans attracts huge
people MG is educating one girl child for every two weeks if a customer has to
wait for delivery of the car which is Worth Waiting For’ programme started by
them. The slogan “It's a human thing” helped to position the combination of
technology and Emotions and were able to achieve popularity in such a short
span of time.
The winning strategy of
MG HECTOR and KIA MOTORS is as follows, India is largely a cost competitive
market and these car making company are able
to offer feature rich product with value for money proposition and customer
delight along with wide sales and service network which has helped them to
retain esteemed position worldwide with great design and quality backed up by
the partnerships and sponsorships with sports and are getting attention in
the market accounting for Vows and Wows they have put forward.
MG Hector has broken the
jinx that no Chinese company can do well in the Indian market because of the
perception. Industry watchers say new brands like Kia and MG have to be
observed for around two years before they can be called successes whereas ACES
or autonomous, connectivity, electric and shared mobility, is the way forward
for the industry.
