While overall, the auto sector is slowing down, there are a pockets where the slowdown didn't seem to affect the sales. Newer, more technologically advanced cars seem to be beating whatever is happening in the auto market and coming out unscathed.
It's no secret that the auto sector in India has been slowing down with this year's numbers turning out to be the worst the sector has seen over the past few years.
Combined auto sales in the passenger segment was down 23.54 percent in the April-August period when compared to the same last year. Sales in the passenger vehicle segment fell by 29.41 percent while utility vehicles and vans declined by 6.27 percent and 34.04 percent respectively over the same period.
However, while overall, the auto sector is slowing down, there are pockets where the slowdown didn't seem to affect the sales. Newer, more technologically advanced cars seem to be beating whatever is happening in the auto market and coming out unscathed. This may not be true for the company as a whole itself, but it does show that there is some resilience somewhere in the market.
For example, the MG Hector which was launched in India on June 4, had already garnered up to 10,000 bookings by that time. Over the next few months, bookings soared to as much as 28,000 units with over 11,000 customers on priority waiting lists.
In July, MG managed to sell 1,508 units and in August alone, 2,018 units of the Hector were sold. Now, the company plans to speed up production to 3,000 units in September. Bookings are again set to resume in the month of October after MG closed bookings because of the low production capacity.
Another car that is beating the slowdown is the Kia Seltos. Its sales far outdo even that of the MG Hector. Launched only in August, the Kia Seltos had already racked up more than 32,000 bookings. The same month saw Kia selling 6,200 units. Of course, a substantially lower price point than the MG Hector did help with the Seltos' sales, but the car also falls in a slightly different class of SUV.
Then we have the Hyundai Venue. Clocking in over 9,000 units in both July and August, the sub-compact SUV was probably one of the primary reasons why Hyundai managed to grab a little over 19 percent of the market share despite their overall (domestic + export) 9.54 percent drop on a year-on-year basis.
These numbers may still not amount to much but where older cars seem to be losing traction, the demand for these cars does not really seem to be diminishing. This could be signalling an underlying trend that states the Indian consumer is probably ready to pay a slightly higher price for more premium cars. The fact that all of these cars come loaded with features and internet connectivity could also point to that trend.
All three of the above mentioned cars come with internet and safety features that allow for the use of a smartphone even from outside of the car. They are constantly connected to the internet by using an integrated simcard with 4G connectivity while the software itself is 5G-ready.
Perhaps it isn't time that car makers should start cutting prices. It may not be that people do not have the financial capability to buy new cars. Maybe people are just bored with what's available in the market right now, especially millennials. Ola and Uber probably have nothing to do with it.Manufacturers need to spruce up their offerings. Sure, the budget car will always be needed, but with the growing advancement in technology and the growing need for safety, it shouldn't be difficult to provide an excellent vehicle at a slightly higher price or maybe even at the same cost.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.