Loaded car variants catch consumer fancy

The Indian consumer is clearly veering towards premium variants, instead of stripped-down economy versions of car brands. Industry numbers reveal a shift in consumer preference for premium variants as opposed to economy version of car brands.

For instance, Hyundai Motor India has seen up to 22.4 per cent sale of Santro Xing come from the higher variant 'XO' in 2005. And the economy 'XK' variant contributed only 10.3 per cent to sale in 2005. And in terms of numbers, the company claims to have sold only 11,028 of 'XK' in 2005, while it sold 24,068 of 'XO' variant Xings.

The story continues to be repeated across segments. For instance, Toyota Kirloskar Motor saw its consumers rushing in with demand for higher variant of its Innova brand.

According to the company, the sale of Innova for its top-end variants V and G3 account for 50 per cent of the total sale. The vehicle was launched in March 2005 and has five variants in all.

As of December 2005, it sold 32,000 vehicles. Meanwhile, for Corolla that has five variants, the company has also noticed a better offtake of its variants vis a vis the economy model. The top variant, H5, accounts for 25 per cent sale, while H2 accounts for 52 per cent.

Rajesh Jejurikar, executive VP, marketing & sales, Mahindra & Mahindra, says the company has noticed consumers reaching out to the higher priced CRDi version of Scorpio, which has started accounting for 95 per cent of sales volume.

This, the company claims, has caught it by surprise as it thought that the demand for CRDi version would come only from the top 13 metros (where vehicles were required to conform to the latest emission norms). It expected smaller towns to opt for the lower priced BS2 model of Scorpio that costs at least Rs 30,000 less.

"However, we are amazed to see that even smaller towns demand the higher priced variant. Of course, the lesson to be learnt is that that people are certainly price sensitive, but are willing to invest more for better technology and better value deals. Also with easy financing options, consumers do not find much difference in their EMIs," said Jejurikar. The company sells 2,500 Scorpios every month and the higher variants have consistently moved up in sale, he said.

Similarly, Honda Siel has also noticed the higher end variant Gxi of its City brand clock better sales than the lower-end EXi. According to the company: "Customers now want more in their cars than a few years ago.

What was considered a luxury about five years ago, has now become a necessity." Month after month, since April to Dec 2005, the company has consistently recorded higher sale for its top variant.

Meanwhile, according to market sources, Tata Motors has seen 50 per cent sale for Indigo come from its higher variant rather than the economy version of the brand.

Maruti Suzuki has also consistently seen a trend where the top variants of its A2 and A3 segment (i.e Alto and Wagon R) have clocked booming sale. And for those rushing in to suggest that people with money are willing to stretch more, then it is not so.

According to industry observers, the domestic car market is evolving and moving towards a buying pattern where consumers see value in investing on loaded mid segments cars, rather than paying for stripped-down higher segment, or for that matter going in for lower segment's economy variants.