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When small is actually BIG!

March 24, 2017 15:58 IST

Tata now occupies the fourth slot with the incremental volumes from the Tiago

Smaller entities in the domestic car market are beginning to see a comparatively bigger ride.

In a trend reversal, the combined share of the top five companies has come down; the next five have gained share in an expanding market.

All the five occupying sixth to 10th position, led by Renault and its alliance partner, Nissan, have expanded their share.

The combined share of the top five - Maruti Suzuki, Hyundai, Mahindra & Mahindra, Honda and Tata Motors - is down from almost 85 per cent in FY16 to 82.6 per cent in the first 11 months of FY17, shows data from the Society of Indian Automobile Manufacturers.

Only Maruti and Tata have gained share. Japan’s Honda is the main loser and has also slipped to fifth position, from fourth in the previous year.

Tata now occupies the fourth slot, with incremental volumes from the Tiago, its small car.

The share of Hyundai, the second biggest, has seen a marginal decline, though it sold more vehicles. Rakesh Srivastava, senior vice-president at Hyundai, said the volume sold was in line with the calendar year plan.

M&M’s volume this year is not so different from last year, as demand has been hit in rural markets after the currency demonetisation in early November.

Toyota, Ford, Renault, Volkswagen and Nissan (sixth to 10th in market share for FY16) now have a combined 15.6 per cent in the domestic market, compared to 12.9 per cent in the previous financial year.

This translates to an additional 81,000 units for these smaller companies. The industry is poised to sell three million passenger vehicles in the domestic market this year.

The key gainer among the smaller ones has been French car maker Renault. From 2.57 per cent in FY16, it has come close to 4.5 per cent in the first 11 months of 2016-17.

The surge comes on the back of the approximately 100,000 units of the Kwid it sold in the domestic market this year. Its alliance partner, Nissan, has moved from 1.41 to 1.88 per cent, due to contribution from the rediGo.

Renault has added 65 outlets to its sales network in the 2016 calendar year. Another 50 will be added in 2017, taking the number to 320.

German auto major Volkswagen and American company Ford have also gained share, on the back of double-digit growth in volumes during the year.

Toyota, hit by a ban on big diesel vehicle sales in the Delhi region during the fourth quarter of FY16 and the first half of FY17, also saw a marginal increase in share due to demand for the new Innova Crysta and the new Fortuner.

“The Indian car market is dominated by the top three - Maruti, Hyundai and M&M; together, they command two-thirds. The small increases seen by those with tiny market share augur well for many new players waiting to enter the market,” said an analyst.

India, according to various estimates, would be the world’s third biggest car market by 2020, with annual volume of five million units.

Top global car makers such as GM, Ford, Toyota, Honda and Fiat have a base in this country but hold single-digit market share. SAIC (China’s top car maker), Korean company Kia and French company PSA are readying plans to enter India.

Ajay Modi in New Delhi
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