Earlier this month, the largest car maker in the country announced a cut in production of its big-sellers: the Alto, Wagon-R and Ritz. If anything, it was the clearest indication of the drop in buying. In this market situation, are some car makers doing better than others?
CarToq looked closely at car sales for small cars in the January to July period this year. Since Maruti has cut production only in the smaller hatchbacks and not the premium hatchback or its sedans, we looked at what is happening in the smaller hatchback market only.
The drop in sales is nearly 30%. Look another way, in July compared to January there was almost 31,000 drop in sales in small cars. That is a very big drop in such a short time, and it explains why Maruti has actually cut its production.
Maruti sold 16,200 less small cars in July compared to January. So the drop in volume has been the biggest for the market leader. But there is an even more interesting trend for buyers beyond the drop in volume.
We studied whether the market share for the car makers has any changes. In other words, in these tough times, are some brands being preferred more over others?
Well, the results had a few surprises. The market leader, Maruti Suzuki, has actually increased its market share in July compared to January, though marginally. Its share moved up from 58.3% to 60.3%. So in a tough market, more buyers are choosing Maruti over others.
So who is losing out? The second-largest car maker, Hyundai – its small car sales (Santro and i10) market share dropped a bit from 19.7% to 18.5%. This is a bit surprising considering the strong value proposition of both its cars.
While some Hyundai buyers seem to have gone to Maruti, some others have chosen GM cars (Spark and Beat). GM small car market share also inched up from 6.1% to 8.7%. Hyundai has responded in the last few weeks, with offers on both the i10 and the Santro. Read our story here
The company that has lost the most market share is Tata Motors. Its small cars (Nano and Indica) have dropped from 16% in January to 11.8% in July. In terms of actual cars sold, the volume has dropped by more than 47% for Nano and Indica if you look at January sales and July sales.
Tata Motors also came out with an aggressive scheme for Indica buyers, and there is a big marketing campaign on for the Nano.
The entry-level or the small car market accounts for a little less than half of all cars sold across different segments. Buyer sentiments are shaped more here than in any other segment. This shift in market share among the top four car makers – Maruti, Hyundai, Tata Motors and GM – could mean different and more responses from them in the coming two months.
We will be closely tracking this and bringing you updates about how buyers can make the best choices based on what car makers have to offer. Stay tuned!