Small is Big in 2014!

Friday, 31 January 2014 - 11:05am IST | Place: Mumbai | Agency: DNA
Going small seems to be the new mantra.
  • Pic: Kunal Khadse

The Indian automobile industry is going through one of its worst patches in recent years, and what started as a negative sentiment in 2012 has resulted in a lackluster performance in 2013, despite the advent of new models across categories. No doubt, the underlying reason isn’t the product mix available but the prevailing macro-economic situation driven by inflation, high interest rates and spiralling fuel prices which has led to a severe drop in sales as customers have stayed away from making such large investments. Such is the case that the Society of Automobile Manufactures (SIAM) had to revise their projections for 2015 from five million units to four million.

Going small seems to be the new mantra across the industry. Small cars and small engines to be more precise. With high product costs and spiralling fuel prices, it only makes sense that such products will sustain themselves in a market like this.  The Suzuki Celerio, Datsun Go, and new Ford Figo are testament to this line of thought. Small cars remain a popular choice as they are cheaper to purchase, and rather fuel efficient. Further to this, these cars are being built not just as stripped down cheap versions, but fully loaded comfortable cars with loads of features but just in a small package. It is a new line of thought that has other manufacturers warming up to the idea and entering this space as well.  Adding to this smart technology such as Suzuki’s intelligent actuator control that does away with the clutch, or even Honda’s upmarket looking touchscreen air condition controls. It’s got a lot to do with packaging and styling as well.

Moreover, manufacturers are also looking at addressing the petrol-diesel predicament that customers face. In 2013, even diesel car numbers slipped and with the price difference between the two fuels getting lower, manufacturers have turned to technological solutions to refine petrol engines and enhance their ability to offer the joys of driving while remaining rather fuel efficient. Small capacity engines that have been turbocharged are cropping up and while we have seen the advent of engines such as the 1 litre EcoBoost from Ford or the smartly packaged K10B in the Celerio, Tata has also showcased their next-gen Revotron engine series for small vehicles which boasts of being turbocharged. Other smart technologies are also coming to the fore; a prime example being Suzuki’s intelligent actuator control that does away with the clutch offering you a hassle free drive experience in the city while offering you the same mileage as its manual transmission counterpart.

The small theme has also been extended to the SUV space and while we have seen vehicles like the Duster, Terrano and EcoSport debut in the country, in the near future this segment is also expected to grow considerably. Tata is readying the Jump, while Mahindra is working on a compact SUV as well. GM is also toying with the idea of introducing a compact SUV and Honda has already previewed their compact concept known as the Vezel. This is definitely an emerging segment in the market and it holds the possibility to drive the numbers up in a big way. Surprisingly, the idea of downsizing the SUV isn’t just limited to the entry level segment, as premium manufacturers are also playing the game. Audi did it with the Q3 and BMW has the X1. Mercedes-Benz is now gearing up to introduce the GLA which also follows the same line of thought, albeit with the added benefits that only a Mercedes-Benz can offer.

While the product mix is set to change, thanks to the ever changing dynamics of the market, manufacturers are also looking at innovative ways to take their product to market. The consumer has evolved and has a plethora of choice so manufacturers are now looking at more than just mere marketing gimmicks to draw them in. It is now the generation of experiential marketing and this is definitely the need of the hour. An educated customer needs to experience the product right from the time of purchase and throughout the product lifecycle including the very important yet often not talked about quality of periodical service. The brand needs to come across at all the levels, and this is something that will definitely have a positive effect on consumer sentiment.

It is just the beginning of 2014 and while the current outlook isn’t upbeat, there is scope to usher in a revival and bring back a little optimism in the market thanks to the advent of new products that are more suited for such an economic environment.


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