Car buyers eye more bang for the buck

Airbags, power steering and ABS find their way into mid size cars

There is a sea change in the aspirations of the Indian car buyer. A few years back the Indian car buyer was reluctant to spend that extra lakh for a better car. Today, however he is willing to spend more for extra value.

With a galore of options to choose from, he is also willing to experiment with new cars. In the process, the possession time of a car has gone down substantially.

"A growing trend over the past few years has seen the Indian car buyer increasingly eye quality. From being a price-conscious customer to one who looks at value and is ready to pay for it. One of the reasons for this trend could be the lack of value-driven products in India till the past few years," said T Ino, marketing director, Toyota Kirloskar Motors (TKM).

According to Imran Hassen, managing director, Skoda India, better policy initiatives from the Centre have allowed car makers like Skoda, Toyota and Honda to introduce a variety of contemporary value-added cars, affording customers greater choice.

Arvind Mathew, managing director of Ford India said "The global launch of our next new model will be initiated from India. The model was designed keeping the Indian customer in mind and will have all the contemporary value additions-a testament of the choices of the Indian, which are aligning with those of the global car buyer."

At least three players-Toyota, Honda and Maruti-have either added value to their existing models with new design and better features or have come out with new products.

Toyota came out with Innova earlier in the year and discontinued Qualis-which was doing well in the Indian market. Maruti introduced Swift in May with a slew of new features that are unavailable with Zen and Alto, and Honda discontinued its old City for a more contemporary, modern and fuel-efficient New Honda City.

"Over the next couple of years features like power steering, sensors, air bags, anti-lock braking system (ABS)-available only in the top-end cars till now-will become commonplace in A and B segment cars," said Amit Dutta, vice-president, marketing and sales, General Motors India.

In Innova, Toyota combined the multi-utility vehicle(MUV) features of Qualis with more lifestyle features, which made it more contemporary, versatile and stylish. Innova also incorporates safety features like ABS, air bags, and traction control.

It is priced between Rs 6.7 lakh (base version, petrol) and Rs 10 lakh (top-end version, diesel)-enough to appeal to a host of car buyers. The average Toyota Qualis was priced Rs 1-2 lakh less than the Innova.

TKM sold 36,698 units of the Qualis between January and December 2004, registering a growth of 20 per cent over 2003. The company expects to sell 50,000 Innovas in 2005.

"We have received over 25,000 orders for the Innova since its launch, as against our production capacity of 4,500 units per month. We are have increased the production of high-end Innova since June," said Ino.

Swift from the Maruti stable has new features like collapsible steering, ventilated disc brakes, energy absorbing frames and remote keyless entry with alarm system, onboard computers, all aluminium 16-valve, 32-bit hypertech engine and rally-based suspension system. Many of the features are not available in the other products like Zen, and Alto.

"Normally you see these value-added features on high-end niche cars. The huge booking for Swift only proves that it is not the pricing but value that is important to them," said a senior Maruti official.

Currently, Maruti Udyog has a booking of about 25,000 Swift. Even before the launch of the Swift on May 25, the company had booking for 9,000 cars, which highlights the demand for value. Maruti Swift is priced at Rs 4-5 lakh, costlier by Rs 1-1.5 lakh compared to its Zen.

Honda's old City was discontinued even though it doing well. The new Honda City's sales grew by 29 per cent during Jan-May 2005 over the comparable period the previous year.

With Indian customers beginning to appreciate the value, the car makers are confident that many of the contemporary features will be visible even in the entry-level Maruti 800s and Altos.