Latest launches like Kia Sonet set sales in motion
18 Oct 2020

Apart from pent-up demand, sales of passenger vehicles have been rising for the past two months on the back of new launches as well, like a Hyundai Creta (new variant) and Kia Sonet. For instance, in the July-September 2020 quarter, the new Creta sold 35,632 units, a growth of 85.3% over 19,227 (according to data by PGA Labs, the market research arm of Praxis Global Alliance). Analysts say the novelty factor is a major factor to drive people to showrooms. Sanjeev Garg, practice leader, automotive, Praxis Global Alliance, says this year saw a lot of new car launches, and “substantial sales are coming from models such as new Creta, Sonet, new Maruti Suzuki S-Cross and Tata Altroz”. Even a relatively lower selling car, the S-Cross, was able to get onto the novelty wave.

Launched on August 5, its sales grew a whopping 171% in August-September — to 4,625 units from 1,706 units a year ago (for comparison, in July the old model of the S-Cross sold merely 451 units). “There is a certain degree of affection towards new car models, because these represent the latest, cutting-edge technology, efficiency, power, safety and so on,” says Harish Bijoor, brand guru and founder of Harish Bijoor Consults. “This, in turn, elevates the brand value of a carmaker, pulling customers to showrooms or, in these times, digital purchases.”

Som Kapoor, partner, automotive sector, EY India, has a unique take on new models. He says models that provide a holistic in-cabin experience are doing well. “Successful cars this year have been those that are feature-rich, those that offer a lot of features on the dashboard,” he says. He argues that people are spending an increasing amount of time in traffic, so a feature-rich dashboard is becoming a major purchase reason, instead of, let’s say, engine power and size.

In fact, so strong is the pull of feature-rich new car models in India that these, at times, upstage the established models by a vast margin. For example, the Sonet, launched on September 18, sold 9,266 units in just 12 days (also because Kia had started the bookings on August 20), outselling the established models such as Maruti Suzuki Vitara Brezza (9,153 units) and Hyundai Venue (8,469 units). “Whenever a buyer enters a showroom or opens a website for digital purchase, her first glance goes to new models,” says Gaurav Vangaal, associate director, IHS Markit. “Most of the traction of pent-up demand after the lockdown has been taken by these models.”

He adds that carmakers such as Kia and even MG have gained because certain other carmakers couldn’t fully ‘ready’ their new models on time (because of the lockdown in India). Models whose launch got delayed include Nissan Magnite and Mahindra XUV500 and Thar. “Because South Korea and China were not as ‘locked’ as India was, companies such as Kia and MG were able to ready their new products on time, and thus were able to ride the pent-up demand wave for longer,” he adds. Forthcoming cars launches include the Magnite, XUV500, and then Tata Gravitas and HBX and Renault Kiger within this financial year, in addition to the new i20 (late-October).

Ready to talk?

I want to talk to your experts in:

We work with ambitious leaders and transformative clients who are defining the future. Together, we achieve extraordinary outcomes.

I have read the privacy policy and I agree to its terms.