General Motors is launching a new Chevrolet Sail U-VA premium hatchback in India in an attempt to chip away market share from Maruti and Hyundai but may find the job a lot more difficult than expected, a local report said.
The Shanghai Automotive-devloped Sail is one of the fastest selling cars in China but Indian pundits are wondering if GM can use it to post a significant jump in its performance or will will it drop the ball, as in the case of the Beat and Cruze, and allow the car to lose traction, the Economic Times wondered
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The Sail U-VA offers space and a fuel-efficient diesel engine, which is what most Indian buyers are looking, but the “understated” design may not “pull in people in hordes”, the paper thought.
The Sail has been tailored for India with local engine and suspension calibrations and raised ground clearance. It is likely to be aggressively priced between INR405,000 and INR700,000 (US$8,200-$12,800) and may undercut Maruti Susuki’s fastest selling Swift. It will also compete against the Toyota Liva, VW Polo and Honda Brio. The segment accounts for 20% of the overall Indian car market and has grown at over 25% in the past few years.
The has a 1.3 litre ‘Smartech’ diesel engine based on Fiat’s Multijet diesel which power almost a dozen cars in India is geared to offer optimum fuel efficiency. The company claims the diesel engine will offer 22.1km/litre (ARAI) and the 1.2 litre petrol alternative – the same engine which powers the Beat – 18.2km/litre.
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The Swift and Hyundai i20 average about 15,000 and 7,000-7,500 sales a month respectively.
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By GlobalDataHM India chief Lowell Paddock said the Sail U-VA would give GM a presence in the fast growing diesel hatchback sector which it had been missing.
“There are areas where we are underperforming and we just didn’t have the right product. But now with Sail we have a solid vehicle and one of the most fuel efficient vehicles in the segment. We will have to tweak that marketing mix to get the best volumes out of it,” he added.
Deepesh Rathore, head of IHS Automotive locally, said GM products are among the best in the industry invariably get off to a good start but historically have not been able to sustain excitement levels.
“I am optimistic about the pricing of Sail and I think it should get off to a good start. But in the past also, the company has managed to introduce good products and then they fizzle out. The problem lies in the way they market their product and how the customers are treated at the dealer’s end leaves a lot to be desired.”
The Beat, sandwiched between premium hatchbacks like the Ford Figo and Honda Brio and A1 segments like the Hyundai i10, Maruti Suzuki Wagon R, Figo and Brio, has been averaging sales of 4,000-4,500 units a month.
The Beat offers a one-litre diesel engine and once sold 6,000 units a month but could not sustain the momentum due to overall economic conditions in India and stiff competition.
Nonetheless, GM India aims to double its annual volumes to 200,000 units in the next year.
It will also launch a Sail sedan and the Enjoy MPV.
GM India sold 111,510 units in 2011 and 110,804 in 2010. So far in 2012, the company has sold close to 80,000 units.
The market was likely to grow by 1-2% this year however the new models would help the company outgrow the market.
“We have been doubling our sales every three years but, with three car launches, we should be doubling our sales in one year itself,” a senior executive told Economic Times.
The target is still off the mark of 300,000 units it intended to reach by 2013, which was announced in 2010. The company said, since announcing the target, the overall market has tumbled to flat to single digit growth. The target also included light commercials, currently on hold.
