Passenger Vehicle Product and Market Analysis

Currently, India is the fourth largest Passenger car market with 3 million vehicles; by its value is around 24 billion Euro, and is expected to be around 35 billion Euro by 2023. Germany, Japan, USA, and China are bigger markets than India. Last year’s trend showed that GAP between Indian and other bigger market is narrowing every year. India is having positive growth and on the other hand, Germany and Japan markets showed de-growth since these markets are already saturated.

If we see car density, India comes at number seventh position with 24%. It shows that there is tremendous growth potential in the country. We expect that by 2030, India will be second largest car market. Chasing German and Japanese market does not look difficult.

The market is expected to grow by 4 percent CAGR and it will touch around 8 percent CAGR by 2023. The market size of the passenger car segment may touch around 5 million units by 2023. In Indian PV segment, SUV will be the fastest growing segment, with expected registration in double-digit growth. Also, Sedan is expected to grow better than Hatchback segment.GDP size and growth is one of the key parameters to check the health of the country’s  economy. In 2016, India was contributing 7 percent in a global economy and by 2050, it is expected to contribute 15 percent.

Globally, compared with Germany, the gap was 2.2 million units in 2005 and was just 0.3 million units in 2016. If we compare with Japanese car market, in 2005 the gap was 3.6 million units which became just 1.1 million units in 2016.  Currently, US Car market is the second largest market but India will expect to overtake by 2030. In 2016, the gap is just 3.9million from 6.5 million in 2005.

GDP size and growth is one of the key parameters to check the health of the country’s  economy. In 2016, India was contributing 7 percent in the global economy and by 2050, it is expected to contribute 15 percent.

Even after entering of Top European players in India, Maruti is still increasing market share in PV segment. The company gained around 6 percent market share since 2011. Recently GM stops to sell cars in India due to its poor sales performance. One of the keys of the Maruti is continuously launching the new product in every segment. The company is presence almost 98 percent of the PV segment where Tata Motors just presence in 40 percent PV segment. Tata HEXA is game changer product for the company due to its value for money.

Hyundai, Honda, Renault, and Nissan only four players increased their market share in last 5 years.

All major OEMs are the presence in India and trying to position themselves with different product strategy. After tough competition from European players in Technology and Brand image, Maruti is still increasing market share in PV segment. The company gained around 6 percent market share since 2011. Recently GM stopped selling cars in India due to its poor sales performance in India. One of the key aspects of the Maruti is that it is continuously launching new products in every segment. Company’s presence is almost 98 percent in the PV segment whereas Tata Motors’ presence is just 40 percent. Tata HEXA is a game changer product and it will support to increase its market share and sales volume at least for next few years.

Hyundai, Honda, Renault, and Nissan are the only 4 players who have increased their market share in last 5 years.

Tata, Ford, Mahindra, Volkswagen, Skoda, and Fiat lost market share in 2016. With all mentioned OEMs, there are different issues which need to be addressed properly. Tata Motors is aggressive and expected to launch few game changer products like Tata HEXA. The company is focusing on style and design of the products. However, it is a not complete solution for the company. In Switzerland, Alfa Romeo is a famous brand because of customers like design and style of cars; so there is a good fit between product features and customer taste, but it is different in India.

French car maker Peugeot is trying third attempt to enter into Indian car market. Kia is another play coming to competitive Indian Car market.

The hatchback is the largest segment, Sedan is the second largest segment and SUV/MUV is the third largest and fastest growing segment in India. Hatchback car segment grew by 0.4, Sedan grew by 6, SUV by 25 and MUV by 4 percent CAGR from 2011 to 2016. SUV segment is expected to dominate PV segment due to its product value proposition and customer buyer’s changes.

B-Segment of cars is the largest segment with CAGR of 4 percent, C-Segment is the second largest with the CAGR of 3 percent. A and D segment is losing its grip in the market and showed de-growth if the same period.

B and C Segments are flourishing segments due to product features, price, increased purchase power of people and overall vehicle performance with customer choice. B and D segment registered -4 and -15 percent CAGR from 2011 to 2016.

The luxury segment showed 11 percent CAGR from 2011 t0 2016 and expected to show 43 percent CAGR by 2023.

Less than 4 meters length and up to 1,200cc car segment share shrunk but less than 4 meters and up to 1,500cc increased segment share.

Price wise, 11,500 to 21,000 Euro is the biggest car segment in India. This segment is having 22 percent market share.

Customer buying behavior:

Product Strategy- Product plans forecast and its impact on Industry:

Like other OEMs, Mahindra is also planning to launch the new product in SUV/MUV segment to regain some market share. Since the company is mainly in SUV/MUV segment, the new product shall not overlap with each other. Every segment and the segment share shall not move within the group.

After launching of XUV500, the market share of Scorpio drastically fall. XUV 500 market share fall in the same manner after launching of Duster.

Now, Chinese OEM like SAIC is expected to enter into MUV/SUV segment. Brand perception and the relation between India and China will also influence these products.  They are successful in East African market due to local market dynamics, pricing and political relation between China and African countries.

After Sales Analysis:

Now, Chinese OEM like SAIC is expected to enter into MUV/SUV segment. Brand perception and the relation between India and China will also influence sales of these products.  They are successful in East African market due to local market dynamics, pricing and political relation between China and African countries.

Connected car, autonomous car, and driverless cars are ready to enter into Indian market also. Connected cars facilitate connectivity on wheels and provide the best infotainment system, Safety, comfort, convenience, performance, and security combined with a well-connected network are the main features. This enables the driver and passengers to connect with all important authorities, businesses, and people. Changing market dynamics, the need for constant connectivity increased dependency on technology and the growing number of tech-savvy people account for the growth of this market.

Connected car market in a joint study with InnoEra Software Technology and Autobei Consulting Group. Digital apps and services will be part of the car industry by 2020. InnoEra already developed connected car software which can be integrated into any car. Other technology companies like Google is providing a directory of businesses of nearest locations. InnoEra not only provides business directory but also provides emergency services in Medical and panic situation. In a case of road accident also, it helps to get medical services on time along with location and description of the incident. If you would like to know about the city where you are going to visit, the famous place with routes, local market information, city representatives, medical facilities, etc. then all will be on your finger tip on a car dashboard.

Even you will get all important message from authorities, best business deal; participate in making a smart city and many other key features.

Digital After-sales Service: This App not only provides the Dealers or workshops location with their details but also describes the issues with vehicles and can send Audio/Video/Image of the vehicle issues. If your car is facing technical issue or breakdown somewhere on the highway or near the mountain, it is difficult to explain the vehicle issue to dealers and workshops.

This app gives complete solution and sends a clear communication with service providers. This connected car concept can be implemented in anywhere in the world by this InnoEdge Software.

(ACG Annual Subscribers can download the report by using given link)

Report Highlights:

– Trend and Forecast 2030 of Indian Passenger Vehicle Analysis

– Vehicle Pricing Analysis and Sub-segment Wise Market Analysis

– OEM Strategy Analysis

– Entry Strategy for New players

– Rural and Urban Sales Analysis

– Competitor Analysis

– Product strategy and planning

– Coming up product Analysis and Its Impact

– Connected Car future in India and how it will work