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Originally Posted by carwatcher Maruti has 'been there, done that' already. They have launched so many hatchbacks which are cannibalising their own sales but Maruti is actually appreciating it 'as long as the customer remains with their product.'
I don't think Maruti (or any manufacturer for that matter) will be bothered too much if the sales figures of say model A reduces to 8000 from 10000 after the launch of their own model B provided the combined sales figure of model A plus B is well above 10000 and either the sales figures of their competitors have reduced after the launch or the total sales of that segment is increased. For eg. Compact SUVs, Compact Sedans. |
Well, they have been doing this for a while, but this time, it isn't the same case. Till date, they have had the Ritz against the Swift; the A-Star, Estilo, and later Celerio against the WagonR; and the K10 agaisnt the Alto.
The A-Star and Estilo were both major flops, and didn't make any impact on the warhorse WagonR. The Ritz was also no showstopper initially, but as it began to pop its head out of the water thanks to waiting periods on the Swift, it was deliberately killed by Maruti to protect the Swift. Dealers took off cars from display, and began redirecting the people towards the Swift. As for the K10, it is in fact an Alto variant itself. So no question of rivalry there.
The Celerio I believe, is more than a product, a testing track for their new technology. It was the first car to get the AMT, then the 800cc diesel. (In fact I was slightly surprised it didn't get the SHVS first too.)
And despite all the above cars in the scene, in no case were the original cash cows affected too much.
But in this case, it is a more delicate matter for Maruti. More than sales, or the actual car (Maruti need not worry about sales at all actually) it is a matter of the brand. The Swift brand has been their face in India for the last decade now. As I said earlier, it has had a position very few cars have enjoyed to have in the eyes of the people here. Ideally, I would've expected the Swift brand to evolve into a bigger and better hatch to rival the i20 and Jazz, but it still stays the same old Swift for now. And just as it starts getting old and losing its sheen, an entirely new car appears and makes it look decidedly inferior, and threatens to put its position in jeopardy. Hence, even if the total number doesn't get affected, the loss in brand value is something Maruti will have to think about. And this loss won't get compensated till the new Swift comes along.
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Thanks for confirming my hunch.
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You could've as well 'thank'ed the original post buddy!
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Originally Posted by adimicra It is certain that Baleno will cannibalize the sales of the Swift and Dzire but what about the S-cross? The Baleno has most of the features the S-cross has and then some additional ones like Carplay, has similar boot space and looks way better and will cost much less. I am not sure about the interior space but the Baleno seems roomy inside as well. Also, Baleno being so light can definitely match the S-cross 1.3 in performance. Now, we can argue that S-cross is a crossover and all but we know that in this price range, all sorts of cross shopping across segments do happen. S-cross is already looking like a market flop and the launch of the Baleno might kill it, particularly it being sold alongside in the same Nexa showroom. |
Well, I would only use two words for my reply: "Badi Gaadi"!! Any person on the road will tell you, the Baleno is just a 'chhoti gaadi', and the S-Cross is a 'Jeep-type gaadi'
Anyways, jokes apart, I don't quite think the S-Cross will be affected too much by the Baleno, because the S-Cross doesn't have anything to lose in the first place. Also, the S-Cross is not exactly a car that would appeal to anyone and everyone like the Creta. It has its own appeal, of quality, reliability and understated class, and hence a unique specific target customer. And this customer base would prefer to buy the S-Cross over anything else out there. Rather, they would be out in the market specifically for the S-Cross. It's like the CR-V. It always had its own little customer base. And no diesel, or rising prices or third row could take them away from it. Even their own Accord couldn't eat from the CR-V's pie. I think it would be a similar story for the S-Cross as well.
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Originally Posted by hybridpetrol Serious threat? I don't think so! Not so soon. Below are my reasons:
a) Top end Swift comes at about 7L OTR for petrol, and the low end can be bought at as cheap as 5L OTR. Add another 50K, you will have the Dzire. I do not think Baleno will be placed anywhere closer to this.
My opinion: Dzire will be the new no 1 and Swift probably will be the new no 2. However, consider also the fact that the number of places the Baleno will be available will be much less. Many cities wont even see Baleno. Fact is even Omni will beat Baleno in sales numbers due to this one reason.
After Baleno launch, Maruti will again regain the top spot for B2 space (Swift -18K + Ritz-1K + Baleno-6K = 25K!)
Maruti, will not probably worry about product cannibalization, as long as customer stays within the showroom. |
Fortunately you have been proved wrong by Maruti, and how! The Baleno is priced right in the Swift-Dzire ballpark, and though not so near the base Swifts, could really eat into Dzire sales. In fact, I don't see why most urban people would pick the Dzire over the Baleno. The Baleno is world-class, is a fresh product, looks miles better, performs better, has lots of room as well. And the Nexa buying experience offers that touch of excluivity too. Also, only the purchase occurs from Nexa. The service will be carried out in the existing MS service centres only. So just making one trip to the nearby Nexa showroom to get the car home shouldn't be a very big deal if people really like the car. And it is not meant for smaller towns and remote villages anyway, where you aren't likely to find these Nexa showrooms.
The Dzire on the other hand is the same old ugly duckling Dzire, which one can see hundreds of on any given day. Okay there's not much else to fault it with, but unless someone is really desperate to own a sedan or get 'luxury' beige interiors, they would surely pick the Baleno.
And with this pricing, I see another 8-10k seller for Maruti here. Forget the Omni, this should overtake the Creta as well. One thing I definitely agree to, this car would certainly bring more numbers to the B-Segment.
Apart from the volumes question though, the best part I think about these new premium hatches (i20, Jazz, Baleno, etc.) is that they are bringinng new and world-class cars to the budget end of the market, rather than these fake sedans based on cars a segment below, which would be very much unacceptable anywhere else in the world. And the company to thank for this refresh in trend would be Hyundai, who launched an 'elite' small car with incredible quality at a somewhat risky price, in a period when compact sedans was the rage, and many people were busy getting robbed with 'prestige'.
And the huge plus side is that our people have shown great taste and maturity, in the sense that the response to these cars is overall overwhelmigly good, despite the somewhat high prices. Most people don't think, 'why buy a small car when I could get a "sedan" for the money?' as was becoming the trend earlier. So, actually our people have learnt to love their cars, rather than just being proud of them.
And now that Maruti has joined the bandwagon, with full safety kit and cutting edge infotainment in tow, only expect the trend to grow. And as the volumes covered by this segment are very large, the change in outlook would also be really widespread.
Overall, it is a really exciting trend coming up. I would really love to see our roads filled with global class cars of quality; not ugly and unsafe boxes of prestige.
{PS: The safety of the Indian variants of these world class hatches is still questionable, though I think it can be safely assumed to be a notch better than most India-specific cars. But at least it's a change in approach for the good, and genuine attempt in the right direction. With time, expect the actual safety standards to grow considerably as well.}