A slowdown in market is should have generally, brought down all demand for cars in India. Instead, some car models, have become so popular that they have long booking lines. Some of them have waiting periods for more than two months. The Indian car market is seeing a surge in demand for both models of Maruti Suzuki Swift, Mahindra Xylo and Hyundai i20. The car market is showing signs of sheer strength, riding on the popularity of these cars. The demand has not slowed down at anytime since the downturn. The trend has taken the Indian car market by surprise. Dealerships continue to receive bookings in all states, and there is an overall consensus about the popularity of these cars.
The increase in demand for these vehicles which comprise small, sedan and SUVs suggests that the Indian car market is growing up form being a largely small car market. People want to try out new vehicle and are ready to invest to experiment of new vehicles. Manufacturers are struggling to narrow the difference in demand and supply.
Take the case of Maruti Suzuki Swift hatchback where the company is now rolling out 9,000 units per month across the country, but the demand continues to hover around 11,000 units per month. Swift hatchback is one of the most popular models in India and currently the demand for Swift diesel variant is higher than its other models. It high fuel efficiency is one of the merits that draw more buyers than any other model in its segment.
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Maruti Suzuki Swift Dzire Sedan has a waiting period of 3-4 months. The demand continues to high even after the company increased production to 7,000 units from the initial 3000 units. However, the company has bookings more than 10,000 units per month across India. Nearly, 65 percent of the demand for Dzire sedan is for the diesel variant. A look at the prices reveals that the diesel variant of Dzire sedan costs Rs 5.47 lakh as against Rs 4.61 lakh of petrol variants. Depsite the higher cost prices, consumers continue to go for diesel variants. The reasons for the trend is that diesel cars have lower running costs and low maintenance expenses. The Swift Dzire sedan was launched in March 2008, after Maruti Suzuki received tremendous response to the hatchback.
The Chairman of Maruti Suzuki Mr. RC Bhargava said that it is difficult to meet the demand fully due to limited production capacity. It is also difficult to spare capacities of other model for this purpose. Initially, the company was unable to meet the huge response due to shortage in engine, brought from Japan. But by the time the problem was resolved, the demand had increased even higher. The .
Mr mayank Pareek, executive officer 9sales and marketing) attributed the companys projection of Swift cars as a perfect product that could meet the aspiration of an Indian family as the reason for its growth in demand. Both Swifts promise loads of space in the cabin and a refined look.
The same goes for Mahindra Xylo MUV which has a waiting period of at least two months, The Xylo MUV was launched in January 2009. Many consumers, who were looking for other Mahindra products like Scorpio and Bolero, have chosen to go for a Xylo. Considering the market conditions, M&M increased prices of Xylo, but demand continued to come in for the SUV manufacturer. M&M upped the production from 120 units to 130-135 units per day. Xylo comes with a price tag of Rs 6.48 Lakh.
Huyndai i20 too continues to get more booking that it can meet.
Hyundai i20 bookings extend up to 2,200 units per month whereas the manufacturer is able to give meet 1500 units per month. This is despite the fact that Hyundai i20 is costlier than other models with a price tag of Rs 4.79 lakh.
All these models show that the rising income levels have spurred demand for quality products (to-end variants) even in bad times.
