|
BUSINESS:
AUTOMOBILES
Easy
Riders
With
three launches in the past three months-and newer models in the pipeline—MUVs
have become the hottest big thing on Indian roads
By Ninad
D. Sheth
It's
not just a family car, it's a joint family car. It's not only for city
driving, it's for suburban driving as well. It doesn't mind bumpy roads,
it can "make its own road". And it's the hottest big thing among
carmakers in India. It's called-rather vaguely-the multi-utility vehicle
(MUV). Slouching under stagnant sales and an overcrowded market auto majors
are falling head over heels in offering this new variant of the car. Maruti
Udyog launched the Baleno Altura, and Fiat India the Weekend, in September.
Two months before that Mahindra and Mahindra had unveiled the Bolero.
Toyota, of course, had entered India with an MUV-the Qualis-in January
1999. Maruti claims its WagonR-launched in December 1999-is really an
MUV.
 With
the sudden bumper-to-bumper rush in the MUV market, carmakers are targeting
everybody from the gentleman farmer to the corporate chieftain as potential
buyers. "The outdoor family car concept is the next big shift in
the Indian car market," declares Toyota Motors (India) Managing Director
S. Yamasaki. Adds Maruti Udyog Managing Director Jagdish Khattar: "We
believe that this is a growth area in our portfolio."
 The
MUV is not a uniform product that lends itself to a precise description.
It is built to endure the rough and tumble of off-the-road driving. Yet
comfort and luxury are its core values. Standard features include air-conditioning
and power windows. Music systems add zing to the long drive on the weekend
holiday. Five doors allow easy loading and unloading of luggage. Pack
in eight-10 people into the commodious interiors and you still have space
left for luggage. The powerful engine means that the vehicle can cruise
at speeds of up to 160 kmph. The extra-high chassis and sturdy suspension
can take the ups and downs of the country road without a whimper, the
power steering makes it easy to manoeuvre and the four-wheel drive comes
in handy when the landscape is undulating.
Not every
MUV sold in India has all these features. In fact, the MUV is a quieter,
more subdued Indian cousin of the sports utility vehicle (SUV) which have
been popular in the US for years. Mitsubishi's Pajero, Chrysler's Grand
Cherokee, Nissan's Pathfinder and Toyota's Landcruiser are among the popular
SUVs in the US. In India, however, sport and holiday driving take the
backseat. The usage pattern in the Indian context is a mix of both: the
MUV is used both as a passenger car and a weekend vehicle, the owner's
economic status and profession deciding how it is used. So, its all-encompassing
classification as a multi-utility vehicle fits in very well.
To be sure,
MUV -type vehicles have been on Indian roads for some time now. There
are Telco's Sierra and Safari, for instance. It's only that the current
rush has created a profusion of choice. And the deluge hasn't ended yet.
Hyundai Motors India is likely to launch its MUV, the Sportage, in another
six months. Telco too is rumoured to launch an estate version of the Indica
in a year's time. Although the Altura and the Weekend hatchbacks do not
strictly fall into the same league as the Qualis or the Bolero, they are
aimed at the same consumer segment-large families living in suburbs, businessmen
who travel a lot and semi-urban users.
The current
rush for the MUV market is largely due to the stagnation in other segments.
The small-car market is already overcrowded with too many players. Ditto
for the mid-size car segment, where inventories are piling up. So the
only way to grow is to open up a new segment. According to the Mumbai-based
Centre for Monitoring Indian Economy, sales of passenger cars grew by
just 0.9 per cent between April and August 2000 over April and August
1999. During the same period, sales of utility vehicles rose by 8.3 per
cent.
Is the Indian
market ready for MUVs? Indeed, the five-day week corporate culture and
geographical expansion of cities have created the need for such cars.
"We are opening a whole new segment in the upper end of the car market,"
says Fiat India Managing Director G. Ravina. Other manufacturers are less
optimistic. "In India the challenge is to find volumes in the Rs
7 lakh-plus price range," cautions B.V.R. Subbu, director (marketing
and sales), Hyundai Motors India. Indeed, except for the basic model of
the Qualis which is priced at Rs 5.5 lakh, most MUV sport a price tag
of more than Rs 7 lakh.
However,
analysts feel that the MUV segment is not very price sensitive. The cars
are positioned for households with a monthly income of over Rs 30,000.
Besides, low interest rates have made car finance easier. Says Veeresh
Malik of cybersteering.com, an auto guide on the web: "The MUV or
estate car is really a fourth car. The market is a premium one."
That's true. The Safari, with a Rs 9 lakh price tag, still manages to
sell 200 units every month. The monthly sales figures of the Qualis have
now touched 2,000.
The Pajero,
which costs about Rs 26 lakh after custom duties, too is in demand despite
the prohibitive price. An estimated 100 units are imported every year.
Says Nalin Mehta, Mitsubishi's general manager (marketing): "The
outlook for muvs is very good in India given that disposable incomes are
rising. Besides, the Pajero has an additional draw of making a personality
statement." The company expects sales to rise up to 200 units by
2003.
The response
has encouraged other carmakers to jack up their projections. Maruti expects
to sell 800 Alturas till March 2001, Fiat India projects a sale of up
to 1,000 Weekends, and experts estimate that Mahindra & Mahindra will
be able to sell 1,500 Boleros.
Clearly,
the new auto mantra is: if you can't change the customer, change the car.
Top
|
CII’s
conference on Friday on corporate governance is called Independent Directors:
Why, How and Who. Why Not, How Not and Who Not, would have been better,
says INDIA TODAY Associate Editor, V Shankar Aiyar