Home / Industry / Manufacturing /  Renault Duster overtakes rivals as challenge looms from Ford EcoSport

New Delhi: Renault India Pvt. Ltd has upstaged the country’s biggest carmaker three months in a row and its biggest maker of utility vehicles two months out of the past three by correctly betting that a budget compact sports utility vehicle (SUV) is what the market wants.

The Renault Duster has sold more than Maruti Suzuki India Ltd’s Ertiga and Mahindra and Mahindra Ltd’s Scorpio thrice this calendar year to emerge as a strong contender in India’s fastest growing utility vehicle segment.

The model is less than a year old in the Indian market, having been launched in July 2012, and its performance has to be seen in the backdrop of Renault’s sales network that’s dwarfed by the dealership structure that Maruti and Mahindra have in place.

Renault has about 100 dealers in India while Mahindra has 250 for the Scorpio alone. Maruti has as many as 1,206 dealers in India. The Duster starts at 7.99 lakh, the Ertiga at 5.98 lakh and the Scorpio at 8.04 lakh in New Delhi. Scorpio is only available in diesel variant.

The Duster is a rare success story in a market that has seen few such amid a slowdown and rising fuel prices that has kept buyers away. UVs are among the segments to thrive, although a recent increase in excise on them has led to higher prices.

In the utility vehicle segment, the Duster is second only to the Bolero, which has a large following in rural India.

While the Duster outsold the Ertiga three months in a row to May, the Scorpio was marginally ahead of the Renault vehicle last month after trailing it in the February-April period, according to model-wise data obtained by Mint.

In May the Duster sold 5,146 units, the Ertiga, 4,306 and the Scorpio, 5,165.

“Duster is a right product that was brought to the Indian market at the right time," said Sumit Sawhney, executive director, Renault India. “All I can say is that it is meeting customer expectations."

The Duster will face competition this month when Ford launches its compact SUV, the EcoSport, which is also shorter than 4 metres, giving it the advantage of a lower excise bracket.

Meanwhile, sales of the only sub-4 meter SUV, Mahindra’s Quanto, have declined from 2,954 units in January to 1,279 units in May.

Experts are waiting to see whether the EcoSport’s launch will dent Duster sales, although it’s likely to eat into the share of other models as well.

A questionnaire sent to Maruti remained unanswered till press time .

According to Autocar India editor Hormazd Sorabjee, “no one has anything to offer that a Duster offers".

It opens up a new segment for small SUVs at around the same price as a mid-size saloon, he added. “It is a case of clever packaging. While it offers the emotional appeal of an SUV, it has got all the practical elements in terms of pricing, design, engine and off-roading capabilities," Sorabjee said. “They have managed to hit a sweet spot."

Renault’s success is prompting others to push their compact SUV offerings.

The Duster is derived from a model made by Renault’s Romanian unit Dacia. Other models that Renault sells in India are the Pulse, the Scala, the Fluence and the Koleos, which together account for just 10% of total sales.

Duster’s success is clearly part of the wider Indian fondness for UVs. Indian buyers bought 52% more SUVs in the last fiscal, according to Society of Indian Automobile Manufacturers data, while passenger car sales dropped 6.69% to 1.89 million units.

Pradeep Saxena, executive director, TNS Automotive, an auto sector specific research firm, said Mahindra’s launch of the XUV 500 in September 2011 also helped Duster’s cause.

“The XUV 500 cannibalized the Scorpio to an extent and secondly, the Scorpio seems to be getting dated in terms of design," Saxena said.

A Mahindra and Mahindra spokesperson said the company continues to update the Scorpio by launching variants and facelifts at regular intervals.

“Additionally, one can expect something new happening in this area in due course of time," the Mahindra spokesperson said. “We haven’t seen any pressure on the Scorpio from the new launches so far."

He added that Scorpio volumes have, in fact, not seen any decline. “For the period January-May 2013 vs same period last year, Scorpio has grown by 6%. In fact, in May 2013, Scorpio registered its highest ever monthly sales of 5,165 units, which incidentally is higher than the Renault Duster for the same month as we see it."

Of the three vehicles, while the Scorpio gives the impression of being a “heavy car", its “ride and handling" are a notch below that of the Duster, “while Ertiga is nimble and gives you a car feeling", Sorabjee said.

Saxena of TNS Automotive said that there was always a set of customers who wanted to drive an SUV priced below 10 lakh. “While price may not be a concern for these buyers, the sheer size could be," he said. “There have always been customers who wanted a real SUV but were not very comfortable with the ride and handling of a big SUV. Scorpio in that sense is a real big SUV with a 2.5 litre engine."

Ford India may have to fight hard to ensure that the EcoSport translates the high level of interest in it to sales, when it launches the product in the middle of the month. The firm tasted some success with the launch of its small car Figo but that seems to have fizzled out in a slowing market.

Still, aggressive pricing and packaging could see some prospective buyers of the Duster opting for the EcoSport.

Sawhney of Renault India is unperturbed. “For any competition, it is a big market. We see enough space for every product, while we will continue to grow on a month-on-month basis," he said.

Sorabjee of AutocarIndia doesn’t see the EcoSport having much of an impact on the utility vehicle segment. “This vehicle will eat into the sales of premium hatchbacks and entry-level sedans," he said.

Ford will be hoping that will hit another sweet spot for Indians.

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