Active Stocks
Tue Mar 19 2024 10:11:06
  1. Tata Consultancy Services share price
  2. 4,030.00 -2.77%
  1. Tata Steel share price
  2. 149.65 0.03%
  1. NTPC share price
  2. 313.05 -1.29%
  1. HDFC Bank share price
  2. 1,442.05 -0.29%
  1. Tata Motors share price
  2. 964.60 -0.78%
Business News/ Industry / Manufacturing/  Tata Nano among top 10 best-selling cars of 2012
BackBack

Tata Nano among top 10 best-selling cars of 2012

In the 11 months ended November, sales of the Nano rose 18% to 74,545 units from the year-earlier period

The company is also preparing a diesel version of the Nano to take advantage of the price differential. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)Premium
The company is also preparing a diesel version of the Nano to take advantage of the price differential. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

New Delhi: It’s the kind of farewell gift that’ll please Ratan Tata, who steps down as chairman of Tata Sons Ltd on 28 December: Tata Motors’ Nano is one of India’s 10 best-selling cars in 2012, edging out such former worthies as its stablemate Indigo and Hyundai’s Santro.

In the 11 months ended November, sales of the Nano rose 18% to 74,545 units from the year-earlier period, and that too in a declining market for petrol cars on account of the huge price difference between that fuel and diesel.

Indeed sales of top-selling petrol models such as Maruti Suzuki India Ltd’s Alto and WagonR, and Hyundai Motor India Ltd’s i10 declined in the 11 months. And the contribution of diesel cars to total car sales has increased significantly from 28% in 2010 to 58% in 2012, according to industry lobby Society of Indian Automobile Manufacturers (Siam). That means almost six out of every 10 cars sold run on diesel, which is subsidized by the government.

Apart from focusing the marketing at women and young people, Tata Motors also began offering a new colour—orange—that’s become very popular, this executive said. The idea was “to change the perception that it’s a poor man’s car", this person said. The company is also preparing a diesel version of the car to take advantage of the price differential.

It is unlikely that December sales will change the pecking order—car sales are usually muted this month with most customers putting off purchases till the following year—a 2013 car is “newer" than a 2012 model—and manufacturers using the opportunity to shut plants for maintenance.

Interestingly, in a year that saw it roiled by labour trouble, Maruti Suzuki dominated the charts, occupying the top four positions, albeit with lower sales for some models. The launch of the new Alto doesn’t seem to have done much for the fortunes of India’s most popular car, with its sales declining 9.28% in the first 11 months of 2012.

In the first 11 months of the year, customers bought 1.87 million cars compared with 1.78 million in 2011. Out of the cars sold this year in these 11 months, the top 10 accounted for 63%. Indian customers can choose from 21 car makers and around 120 models.

According to Mahantesh Sabarad, senior vice-president (equity research) at Fortune Equity Brokers (India) Ltd, the Alto continues to be popular among car buyers 12 years after it was first launched.

“Alto has topped the sales chart in seven of these 12 years. Its low price backed by an enormous distribution network (more than 800 cities) has contributed to its success," he said. “(But) this year has been different for the Alto as it suffered its first drop in domestic sales in four years due to the ongoing slump in automobile sales in the country, contributed in part by a weakening economy and rising petrol prices relative to diesel."

The sales chart is dominated by small cars, with the Swift DZire being the only sedan.

Expectedly, models with diesel versions did well in 2012. Maruti’s Swift and Swift DZire, which have diesel versions, saw sales rise 52% and 56.31%, respectively, over last year and were placed second and third on the chart.

“These models also gained in sales from the pent-up demand that formed in 2011 due to a series of strikes/unrest affecting production at Manesar, the plant where they are made," Sabarad said.

The rise in demand for diesel cars affected the country’s second largest car maker Hyundai, forcing its Santro off the top 10. Sales of its i10 model declined 30% in the 11 months, pushing it to No. 5 (from No. 3 last year).

“In the early part of this financial year, the dieselization trend was strong and there was a decline in the demand of petrol cars by 15%," said Rakesh Srivastava, vice-president (sales and marketing) at Hyundai India. “We have also witnessed many launches in this segment resulting in market expansion."

Sales of the i10 have revived since August, Srivastava said. They rose from 6,300 units in August to 9,782 in November.

According to Fortune’s Sabarad, sales of the Santro and i10 may have been cannibalized by Hyundai’s new small car, the Eon, which was launched last October. “The launch of the Eon has not raised overall sales of Hyundai," he said.

Hyundai’s Srivastava disagreed. “Even after 14 years, the Santro continues to be extremely popular with Indian customers," he said.

Hyundai sold 45,612 Santros, 91,515 i10s and 85,729 Eon’s in the 11 months to November, down 34.54% and 29.85%, and up 309.69%, respectively.

That the revamp of the Nano marketing focus was successful is evident in the buyer profile. According to Tata Motors, women account for almost one-fifth of Nano buyers in the metros, and 42% of all buyers are under the age of 35.

“The Tata Nano is benefitting from the introduction of the Nano 2012, exclusive dealers in the hinterland (about 150) and increasing interest among young consumers about the car," a Tata Motors spokesperson said in an email. “But for the increase in fuel prices and high interest rates, the growth would have been better."

Indeed, sales of the Nano have been on a declining trend again since August, but so have sales across the industry.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 26 Dec 2012, 11:40 PM IST
Next Story footLogo
Recommended For You
Manufacturing Stocks
₹530.60.25%
ITC
₹417.4-0.4%
₹2,878.35-1.12%
₹1,571.45-0.47%
₹149.6-0.5%
Switch to the Mint app for fast and personalized news - Get App