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Small cars to outsell two-wheelers

Small cars to outsell two-wheelers
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First Published: Mon, Aug 06 2007. 03 34 PM IST
Updated: Mon, Aug 06 2007. 03 34 PM IST
New Delhi: Disturbing signals have started emerging for two-wheeler manufacturers in metros and semi-urban areas as a large number of consumers are keenly awaiting the budgeted Rs.Choti Kar’ or small car’s arrival to make a dent on the market which is expected to take away about 25% of the market share of two-wheeler manufacturers.
This was revealed by a Study undertaken by Assocham on ‘Two-Wheeler Vs. Small Car’.The Chamber’s findings are based on a random survey conducted by its research team in which 3000 potential customers participated in metros and semi-urban segments. However, in majority of cases it was observed that these would prefer to wait for the small car to roll down on roads than to buy new two-wheeler as their little cost differential
Findings
* In semi-urban segments, consumers are more inclined to buy budgeted small cars to satisfy their quest for prestige, metro consumers on the other hand feel that small cars will not only serve their needs better and tend to their requirements more efficiently as compared to two-wheelers but will also provide greater Rs.safety’.
* 90% respondents in the semi-urban segment categorically stated that they would rather manage their movements with what they currently own rather than invest in buying a two-wheeler. They felt that since there is still a year to go before the small car is launched, it would be judicious to wait and go in for the car when it comes.
* For owners of two-wheelers making the transition to being car owners, significant reasons were greater comfort and prestige.
* Young people who were earlier wanting their first vehicle to be a two wheeler would now be able to switch their aspirations to buying a four wheeler instead.
Current status
* Two-wheeler market in India has already shrunk to about 17.50 lakh units by June 07 as compared to little over 18 lakh units about a year ago which will further witness a decline since consumers henceforth would have many options in the four-wheeler segment with little price difference.
* Declining second-hand car prices, particularly in large cities also poses a threat to two wheeler sales. The small car segment offers a variety of vehicles to choose from. and with this re-sale, prices as low as Rs.40,000 for a five-year old Maruti 800, options seem to be available aplenty for vehicle owners.
* Most scooters and mopeds launched over the past year have met with poor response from buyers and this has further strengthened the claims of pessimists. Experts in the field continue to be sceptical of the higher engine-capacity motorcycles that have entered the cost-sensitive Indian market.
Relief for two-wheelers
The survey pointed out that in the past two and half years, slew of scooter and motorcycle models were launched. However, the response from buyers was by far betterin the case of motor cycles. The same however could not be said about scooters.
Also, since motor cycles are priced higher and often prove to be risk prone, this provides a psychological edge for car buyers and that is one more reason that the small car sales would be far more attractive and higher in number.
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First Published: Mon, Aug 06 2007. 03 34 PM IST