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Business News/ Industry / Manufacturing/  Auto makers line up slew of new models for 2015
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Auto makers line up slew of new models for 2015

Car makers bet that low fuel prices, expected decline in interest rates will bolster fledgling sales revival

In a market where only new models are selling, new launches will prop up sales to some extent, says an analyst. Photo: Ramesh Pathania/MintPremium
In a market where only new models are selling, new launches will prop up sales to some extent, says an analyst. Photo: Ramesh Pathania/Mint

Mumbai: Car makers are set to introduce more than 20 new cars and utility vehicles in the new year, betting that low fuel prices and an expected decline in interest rates will bolster the fledgling revival in car sales.

These include completely new models as well as new-generation editions of existing ones, according to spokespersons for the companies. Car sales in the current fiscal are expected to expand by around 2%, reversing a 7% decline a year ago.

In a market where only new models are selling, new launches will prop up sales to some extent, said Rakesh Batra, a partner and national leader for automotive sector at consulting firm EY India.

Batra expects a pick-up in demand only in the second half of the fiscal year starting 1 April, with the annual budget and the festive season seen as important triggers. “The next six-eight months are going to be challenging," he said.

Sports utility vehicles (SUVs) may dominate sales next year, with more than half-a-dozen such vehicles expected to go on sale. The new year will also see all those who had been lying low over the last couple of years get back into the market with full force, said Puneet Gupta, a principal analyst at sales forecasting and research firm IHS Automotive.

Mahindra and Mahindra Ltd, the maker of the Scorpio and the XUV5OO, plans to unveil a number of new models and model refreshes, to recoup the ground it has lost to rivals because of the absence of new models. Among other models, the Mumbai-based firm will start selling a compact SUV code-named S101, which will compete with the Ford Ecosport, Renault’s Duster and the Nissan Terrano.

The model, the first new one from Mahindra in four years, is most likely to go on sale by July, said a dealer declining to be identified.

The company also plans to introduce at least four refreshed versions of the existing models.

In the first eight months of the current fiscal, Mahindra’s market share in the utility vehicle (UV) segment dropped to 36.56% from 41.35% a year ago, according to the Society of Indian Automobile Manufacturers (Siam). In the same period, its sales volume fell 7% to 132,728 units from a year ago.

The new models should help Mahindra improve its market share, wrote Joseph George, an analyst at IIFL Ltd, in a 27 November note. “We estimate M&M’s UV volumes to grow at 20% CAGR (compound annual growth rate) over FY15-17 (fiscal years 2015-2017)."

Other important launches in the SUV segment include a new offering in the compact SUV segment from Hyundai Motor India Ltd, likely to be launched in the second half of the year close to the festival season. Similar to Mahindra, Hyundai also doesn’t have a model in the segment currently.

Maruti Suzuki India Ltd, which has lately been focusing on segments other than the small car, plans to introduce a cross-over based on the now discontinued SX4 platform, either in January or February next year, according to dealers. This will be Maruti Suzuki’s second offering in the UV segment after the Ertiga.

Renault India Pvt. Ltd plans to start selling the Lodgy multi-purpose vehicle in the first quarter of the calendar year. To be positioned as the people-mover, the seven-seater will compete with Toyota’s Innova, the Honda Mobilio and Chevrolet’s Enjoy. This would be the second utility vehicle offering from the French car maker after the Duster.

In the premium SUV segment, Fiat Automobile Group India Pvt. Ltd will introduce the Jeep Grand Cherokee model from the Chrysler stable to India in the first half of next year.

Despite the increased number of launches in the utility vehicle segment, the sales mix is unlikely to change materially as SUVs have already seen a big spurt in sales after the Renault Duster and the Ford EcoSport were launched, said Batra of EY India.

It’s the small cars, which have seen lacklustre growth in the last couple of years, that will drive growth for the industry.

Sales of utility vehicles expanded 5.2% to 363,006 units in the first eight months of the current fiscal, while cars expanded at a slower 3.82% to 1.21 million units in the same period, according to Siam.

The mass car market is also likely to see new models next year, including Ford India Pvt. Ltd’s compact sedan based on the Figo (small car) platform. The company will also introduce a new generation Figo called the KA. “Ford has a lot riding on the two models as it’s likely to help the local arm of the US auto maker grow its share in the mass car market where rivals Maruti and Hyundai have a head start," said an analyst, declining to be identified.

Tata Motors Ltd’s Bolt hatchback that is expected to go on sale either from January or February will be another important launch in the small car market. With the Bolt, Tata Motors is hoping that volume growth, which has shown some traction after the launch of its Zest model, will pick up further.

In the first eight months of the current financial year, the company’s passenger car sales dropped 14% to 63,095 units.

Meanwhile, Renault India will be taking another shot at the competitive small car market. Expected to be priced at below 4 lakh, the car is expected to be launched in mid-2015, Mint reported on 25 June. This will be Renault’s second offering in the mass car market. It already sells the rebadged Micra, called the Pulse, in India, although the model has seen limited success.

With a glut of new models, the competition in the market will intensify in a big way, said Hormazd Sorabjee, editor at Autocar India magazine. “The days of long waiting period is over, whoever has a waiting on their model, it is because of production related issues and not because of a demand pull," said Sorabjee.

Meanwhile, luxury car makers, too, have aggressive model launches lined up for 2015. The local arm of German luxury car maker Audi AG plans to launch 10 new models, the Press Trust of India reported on 11 December, quoting Joe King, head of Audi India Pvt. Ltd, which leads the market.

Mercedes-Benz India Pvt. Ltd “plans to continue on the growth path it embarked upon in the current year. We have big plans for the new year," said a company official, declining to be identified. He declined to comment further.

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Published: 23 Dec 2014, 12:31 AM IST
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