The year 2004 was a healthy one for the Indian passenger car industry. India’s booming economy underpinned growth in the market of around 25% with the light passenger vehicle market passing through the one million barrier for the first time. But 2004 in India’s light vehicle market was memorable on other levels too. As well as the continuing arrival of significant new models there were signs that India’s top selling model – the Suzuki Maruti 800 – is finally, after two decades, about to lose its number one position. Deepesh Rathore and Tilak Swarup report (article includes full year 2004 sales data by make and model).
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2004 was the third straight year of growth for the light vehicle market as the Indian economy continued to record economic growth in the region of 7-8%.
But the year 2004 will be significant in the history of the Indian automobile industry for two important reasons. First, domestic light passenger vehicle sales crossed the one million mark, a landmark breached after a phase of unprecedented market growth that has seen the Indian passenger car and utility vehicle market grow by nearly 50% in the last three years.
The second significant happening of the year was the Maruti (Suuki) Alto beating its stablemate and India’s best selling car for the last two decades, the Maruti 800 in sales volume for most of the year. The 800 did manage to end the year 2004 as the best selling car in the Indian market but 2004 will probably turn out to be the long-serving 800’s last year at the top of the pile.
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The Maruti 800 |
Indeed, the 800 suffered a 22% fall in sales during 2004 over the previous year – with annual sales for 2004 of 132,706. The Alto posted sales of 112,045 units, a whopping annual growth rate of some 166%. Alto sales are experiencing rapid growth because Maruti Udyog’s is strongly pushing the model in India right now. The company reduced the price of the Alto, and introduced a base version of the model which was priced only about INR 30,000 (euro 500) above the Maruti 800’s top-end model. At the same time, Maruti discontinued the five-speed transmission version of the 800, pushing customers towards the Alto. The Alto, with its low price and modern styling, has started to find favour with the traditional Maruti 800 customers.
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By GlobalDataIn fact, 2004 was the first time that Alto sales crossed the 100,000 units mark in annual sales. Three cars managed to do more than 100,000 units in 2004 (the third being the Hyundai Santro) while another model (the Tata Indica with 98,318 units) came close.
The Alto’s stablemate and architectural sister, the Maruti Wagon R, also saw a boost in sales of 69%. The car has received a facelift which has helped it to greater market acceptance in India. Also, the customer’s growing familiarity with the Wagon R’s boxy shape has helped the car’s sales.
Meanwhile, Maruti’s third model in the B-segment Zen (last generation Alto) stagnated in 2004. The facelift that the car received last year failed to ignite sales, Maruti customers preferring the makes other offerings.
Maruti’s major competitor Hyundai Motors India saw an 11.6% jump in Santro (Hyundai Atos/Dodge Atos) sales. This would have been higher but for capacity constraints and high export demand. Hyundai’s Indian operations are the global hub for the Santro/Atos.
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The Hindustan Ambassador |
The Tata Indica was the fourth largest selling car in the country in 2004. At 98,318 units, the Indica saw a jump of 27% in sales over the previous year. About 85% of these were the diesel variants. In apparent opposition to the growing modernisation of the Indian car market, the Hindustan Motors Ambassador (1950s Morris Oxford-based car) saw a healthy 10% growth in sales volumes to 12,758 units, riding on two new variants launched by the company.
The worst performing car in the small car segment was the Fiat Palio which saw a sales decline of some 45%. Palio sales were just 5,514 units in 2004, compared with 9,990 units sold in 2003. This huge decline in sales is indicative of a general loss of faith in Fiat India by the market. With no news models planned, further decline for Fiat is expected.
General Motors India’s Corsa Sail has also not been an impressive market performer and the year 2004 saw a further drop of 3% in its sales.
Hyundai India introduced the Getz in 2004 and the car has met with only modest sales success thus far. The Getz has sold some 5,483 units since its launch three months back.
The sub-compact segment has been the fastest growing segment in the passenger car market. The market leader is the Tata Indigo (three-box version of the Indica) which sold 36, 257 units in 2004, growth of 41% over the previous year, with the diesel variant once again proving very popular for Tata.
The new Honda City (three box variant of the Fit/Jazz) has been selling well. The year 2004 saw City sales grow by some 115% to reach 30,834 units.
The surprise revival of the year was the Maruti Esteem which registered 65% sales growth thanks mainly to a facelift and price correction. The Esteem is now selling briskly at about 1,500 units per month. Maruti’s other offering in this segment, the Baleno, also registered a strong sales growth – sales were up by 268% to end the year at 6,522 units thanks to a low end variant launched by the company.
The Ford Ikon sold 24,536 units in 2004, 32% growth over 2003’s sales. The Ikon’s sales benefited from several new variants and a price reduction. Ford also introduced the Fusion at the end of the year. Fusion sales have been slow thus far (329 units by end of the year)
Hyundai’a Accent sales remained stagnant with a minor 4% drop in 2004 over 2003. The company sold 24,087 Accents in 2004. The Accent did not receive any serious push in 2004 and a facelift is not expected in 2005.
However, several sub-compact models faced a fall in sales in 2004. Hindustan Motors-Mitsubishi Lancer sales dropped 15% over the previous year with 2,494 units sold in 2004. Similarly, the Opel Corsa saw sales slide by about 15% in 2004 with 5,635 units sold in the year.
The sub-executive car segment remains dominated by the Toyota Corolla with strong competition from the Chevrolet Optra. Toyota managed to sell 10,195 Corollas in the calendar year, growth of 24.3 percent over the last year. The rival Chevrolet Optra continued a strong sales trend throughout the year and ended the year with sales of 9,191 units. It is interesting to note that neither model has a diesel option.
Skoda sold 6,963 Octavias in 2004, growth of 26% over the previous year’s volume. Skoda is now offering six variants of the Octavia.
Hyundai sold some 3,962 units of the Elantra in its inaugural year and a high percentage of these sales came from the CRDi version of the car with few takers for the petrol variant.
Generally more attractive offerings in the sub-executive and SUV segments had an adverse impact on the executive segment as nearly every model, except for the Honda Accord, faced a decline in sales. The Honda Accord continued in its dominant leadership position. Honda sells the US market version in India and the company sold 2,977 Accord in 2004, 73% up on the previous year.
Both the Hyundai Sonata and the Toyota Camry failed to pose a major challenge to Honda’s leadership position in the segment. The Camry sold 942 units, a 7% drop over the previous year while Hyundai sold just 1,001 units of the Sonata, some 24% off 2003’s pace. Clearly, the ageing Sonata is now late in its model cycle and Hyundai will replace the current model with the newly introduced NF Sonata this year.
Skoda also sells the Superb in India, but in the absence of a strong push, the company sold only 243 units in 2004.
Mercedes had a remarkable year in 2004 as a buoyant economy pushed more well heeled customers towards Mercedes showrooms. The E-Class continued to be the best-selling Mercedes model, selling 816 units, 22% up on the previous year. The C-Class accounted for 785 units while S-Class sales stood at 126 units, 50% up on the previous year.
In the utility vehicle (UV) segment, the Mahindra Scorpio continued its strong run with 27,737 units sold in the calendar year, a 14% gain over the previous year. Significantly, Mahindra’s other UVs accounted for 73,673 units in 2004, a big growth of 29% over last year.
The Toyota Qualis remained the best selling UV in the Indian market with 36,699 units sold in calendar year 2004. Ironically, Toyota has now withdrawn the Qualis from the Indian market with the recent introduction of the Innova. This in a year when Qualis sales grew by 19%.
Tata presented a facelift on the Sumo and renamed it as the Sumo Victa. Sales grew by 16% to reach 30,006 units in 2004.
GM India had a good start with the Tavera and managed to sell 8,417 units. Sales were undoubtedly hurt by long waiting lists for the Tavera as GM India failed to hike up production in time. Now, with the introduction of the Innova, the Chevrolet Tavera will be under fire from Toyota.
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The Maruti Omni |
The Maruti Omni minivan sold 59,524 units, growth of 11% over the previous year, as the company introduced a LPG powered cargo version. The Versa people carrier also registered a growth thanks to a low-end version being introduced by the company. However, volumes were still low at 4,955 units.
In the imported SUV segment, Ford has been doing brisk business with the Endeavour (Everest in S-E Asian markets). Its huge size and diesel power have made the Endeavour a popular choice.
Honda replaced the CR-V with the European facelifted version and the model continued on its popularity graph, ending the year with 1,600 units sold.
