The automotive space saw a number of crucial developments during 2019. This included the rollout of FAME – II scheme and mandatory crash test norms by the government. Multiple launches also punctuated the year regularly. But there were some that proved to have an even bigger headline impact. Here is the list of five such developments.
Production of Tata Nano stopped Tata Motors’ famed mini car Nano, which was set to transform the company’s truck-making image to a production powerhouse, bid a final goodbye when the last unit rolled out from the production lines in Gujarat at the start of 2019.
The event also marked the end of a long-drawn struggle by Tata Motors of making the Nano a success after having failed to position the car as an aspirational product. The Nano was widely known to be ‘a four-wheeled alternative to a two-wheeler’ that struggled to find its way to the first time car buyer's list.
Unveiled first at the 2008 Auto Expo, with a price tag of Rs 1 lakh (ex-showroom), people’s excitement towards the Nano was short-lived. Sales began its downward journey from late 2012 despite the company introducing a variety of measures product-related solutions and promotional schemes.
The management also refused to invest in upgrading the mini car to meet crash test norms and BS-VI standards, leading to the Nano’s natural death. Only one unit of the Nano has been sold in 2019 – a far cry for a model that was allotted on a lottery system basis at the time of booking due to an overwhelming consumer response.
Kia grabs 5% market share In less than four months since its entry into India, Korean car brand Kia Motors has managed to grab five percent market share of the Indian passenger vehicle market. This is noteworthy for two reasons.
One. Kia, which is a sister concern of Hyundai, managed to achieve this through just one product Seltos. This was achieved without Kia tapping into any of Hyundai’s India strengths such as product development or dealership reach. The company set up its own dealerships and developed its own product in the very segment that comprises one of Hyundai’s top-seller Creta.
Two. Renault and Nissan have been independently chasing the five percent market share target since their entry into India more than a decade ago. Despite a product portfolio comprising half a dozen models each, the two companies (along with Datsun brand) have failed to reach the mark.
The Franco-Japanese companies have already pushed the market share target date more than once. Other companies like Ford, Fiat, General Motors and Volkswagen too have tried but fell well short of their targets. Kia is readying more product rollouts in the coming years including electric vehicles.
Jaguar, Land Rover record biggest loss in history Jaguar-Land Rover recorded its biggest loss ever at 3.65 billion pounds after China market and diesel vehicle demand sputtered, followed by a massive write-down by parent Tata Motors.
A non-cash charge of about 3.1 billion pounds was taken after JLR believed that previous investments in machinery and property were valued more than actual. Also, contributable to it was goodwill impairments.
Global sales fell by 5.8 percent year-on-year to 578,915 units as China remained the problem child for the two luxury brands. Mercedes, Audi and BMW, the rivals to JLR, clocked a better performance in comparison.
JLR’s retail performance during the first half of the current financial year has been disappointing so far. During April-September, the two brands saw a 6.5 percent YoY decline in world-wide retail volumes at 257,600.
Fiat exits India Italian car brand Fiat called it a day in India after having struggled to make it big since the mid-1990s. Though brand Fiat, which saw the launches of models like Uno, Palio, Adventure, Sienna, Punto, Linea, Avventura and Urban Cross over the years, has made a quiet exit from India, its upmarket brand Chrysler is still pushing ahead under the Jeep brand.
This is the second exit from India by a major car maker after General Motors. The latter stopped selling cars in India by 2017-end after spending more than 21 years manufacturing in the country and retailing over one dozen models.
Fiat’s Italy-based headquarters decided to push ahead with Jeep, which has a premium positioning, and is more focused on its SUV-only approach compared to Fiat. The latter also suffers from low brand recall value than other auto brands in India due to its poor service record.
Fiat’s US rival Ford found itself in similar circumstances in India. However, the maker of Ecosport decided to join hands with tractor major Mahindra & Mahindra. Ford moved most of its assets to a new company where M&M holds 51 percent stake. New products will be developed by this company, which will be sold under the Ford badge.
Bajaj Auto enters electric segment Bajaj Auto, the country’s third biggest two-wheeler maker, unveiled its first fully-electric two-wheeler in November. The electric Chetak, which is set to go on sale in January, marks the beginning of the entry of large two-wheeler volume players like Bajaj Auto into the electric vehicle segment.
The event was also the rebirth of the famous Chetak brand, whose scooters single-handedly drove profits at Bajaj Auto during the trying days of the Permit Raj. Chetak downhill ride began after the mid-1990s after cheaper and fuel-efficient Japanese models made their way to showrooms. The geared model was eventually phased out by Bajaj Auto only to be replaced by gearless scooters, which also got phased out.
The management promises to have multiple electric products in the coming future at various price points. The company will join forces with KTM to expand the electric bike product range. Hero, Honda, TVS Motor, Suzuki among other are also planning to enter the e-two-wheeler market in the near future.
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