Automakers eye small car resurgence in Covid era

Automakers eye small car resurgence in Covid era

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Kolkata: India’s leading automakers are looking at a resurgence in micro and small car sales following an expected surge in demand for personal transport options in the wake of the Covid pandemic.
Though companies like Maruti Suzuki, Hyundai and Nissan officially say it is still too early to ascertain a change in consumer preference, sources said the companies were internally strategizing to tweak their pre-Covid product mix to meet the post-Covid reality.
While all leading car makers in the country have a portfolio of small cars, the share of small cars in the overall sales pie had declined over the past decade following a shift in preference towards SUVs. But with urban families now looking for a second or third car to avoid public transport for city commute and health experts saying the novel coronavirus is here to stay, small cars sales are expected to zoom in the months and years ahead.
While hatchbacks comprised 47% of cars sold in 2019-20, they were 66% in 2001-02. The slide has been significant since 2011-12 when it drpped from 62% in the previous fiscal following the emergence of the SUV market. However, in terms of absolute numbers, sale of hatches increased from 4.45 lakh units in 2001-02 to 13.05 lakh units in 2019-20.
A report by Capgemini Research Institute that examined how automotive organizations can re-engage consumers and reignite demand during COVID-19, found that hygiene concerns will spur demand in the years ahead. Nearly 57% of Indian consumers surveyed indicated they are likely to purchase a new car later this year. An overhanging section of the prospective buyers are young. And industry experts expect a majority of them to go in for.small cars, both owing to its low cost of ownership and practicality of use in cities which will get more congested as the car count spirals.
Of the 5,000 bookings that Maruti Suzuki, the market leader, has received in the past 15 days, 65% are for small cars. Shashank Srivastava, the aales and marketing head of Maruti Suzuki, said early enquiries were in favour of small cars but clarified that it was still early to term it a trend.
“Yes, small cars should logically get a fillip. There are early indications but we have to wait a little while more to guage consumer behaviour,” he said, adding that Maruti Suzuki with a portfolio of seven hatchbacks was well positioned to cater to the demand spike in small cars. Marketshare of sedans that decreased from 23% nine years ago to 14% last year is expected to decline further.
The company has already resumed production at its Manesar plant and may resume the Gurgaon facility around May 18-19. The two units manufacture 15.5 lakh units per annum on two-shift operation.
Nissan Motor India Pvt Ltd managing director Rakesh Srivastava was more bullish about the resurgence of small cars. “We will experience change in customer dynamics, with a big shift on customers prioritising safety of health and hygiene in shared mobility. In line to this, customers will increasingly seek personalised solutions of their own too. We expect surge in demand for value for money offerings, and in this space, the hatchbacks and sub-4m SUVs will be the preferred choice. The key will be cost of ownership towards which flexible financial schemes and innovative purchase options will be the decider,” he said.
The company has already launched BS6 compliant Datsun Go and Go+ and is set to introduce a B-SUV later this year.
Apart from Maruti Suzuki and Nissan, Hyundai and Tata Motors have also resumed production. Hyundai Motor India Ltd MD & CEO SS Kim said the company had commenced operation from May 8 and had produced around 200 cars in the first day of shift operations.
Tata Motors CEO & MD Guenter Butschek, said the company was cautiously optimistic and saying agile to cater to evolving demand. “We are well positioned to redefine mobility with our new product portfolio, customised offerings and enhanced customer experience,” he said.



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