Trends in the auto market

The Indian car market is seeing green and the total sales for cars have increased 14 per cent annually in the past four years. But what is to be kept in mind is that the average unit sales per model have gone down 12 per cent in the Indian market. Talking in terms of numbers a small car launched in the market sells about 13,000-15,000 units per quarter, the number was once at 22,000-24,000 units about three years ago.

This trend and shift in the numbers has led automakers to come up with new versions or new models of cars one after the other. Fresh products with great features need to be rolled out constantly to feed the ever growing consumer demand. This trend has no doubt increased costs for the car makers who are already battling the rising raw material costs.

aValue-addition and offering premium features as standard is becoming the norm and options like ABS, EPS and keyless entry are also being provided even in slightly lower end models. Indian car market is attracting global car makers who are launching global products and some designed for India specials at a rapid pace. The year 2010 has seen the launch of products like Ford Figo, Volkswagen Polo, Chevrolet Beat et al. The competition in the car market is at an all time high.

The result is a drop in the average sales. If you compare the likes of Volkswagen Polo, Ford Figo Fiat Punto and Tata Indica Vista to Maruti Swift, Hyundai Accent and Ford Ikon, you would notice the dip in the average car sales of the newer ones. The older models received much better sales due to lack of competition. The sedan segment is also not untouched by competition and is facing a similar trend.

The situation is beneficial for the customers who are now spoilt for choice as each car maker is coming up with a better than the rest product to woo them. But the leadership enjoyed by country biggies like Maruti Suzuki and Tata Motors would be hard to keep in the face of so much stiff competition and the ever increasing demand for newer products. There are more than 20 car makers competing for a piece of the domestic market with model after model of cars yet to be launched.