The entry level car segment is set to witness a new battle with French car maker Renault trying to dislodge Hyundai from its Number 2 position in the segment.
The new sub-Rs.4 lakh hatchback Renault Kwid has secured orders for more than 55,000 units in 6-7 weeks since the market rollout of the small car and the carmaker delivered about 5,000 units last month.
“Together with first time buyers, we are also seeing new consumer trends across urban and rural India,” said Sumit Sawhney, Country CEO and Managing Director, Renault India.
During April-October 2015, micro (Nano) and mini (Eon, Alto, WagonR and Kwid) segments reported combined sales of 310,883 units as against 309,999 units in the year-ago period. While segment leader Maruti’s sales grew seven per cent to 2.53 lakh units, second-ranked Hyundai sold only 38,053 units of Eon as against 63,589 units. Nano’s volumes zoomed from 8,019 units to 13,621 units.
The sub-Rs.4 lakh or entry level segment has been served by Maruti, Hyundai, Tata, Chevrolet and Nissan. But, this segment has been dominated by Maruti owing to its strong product portfolio, track record of low cost of maintenance and vast distribution network. These strengths have meant limited success for some of the new entrants.
ICRA’s senior analyst Shamsher Dewan points out that car makers have been focusing on high localisation levels to compete effectively in the entry segment. Kwid, which comes with 98 per cent localisation, has created a lot of interest with its value-for-money proposition, which will be an attractive point for first time buyers to justify investment in a sub-4 lakh car. Also, it has come at a right time when things have started looking up for first time car buyers with improving sentiment, fall in lending rates and lower fuel prices. Thus, Renault Kwid appears to be racing ahead to overtake Hyundai Eon’s numbers.
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