New Passenger Vehicle Launches Provide Limited Respite to OEMs: Ind-Ra
Amidst declining volumes of passenger vehicles, new model launches would provide only limited, short-term respite to original equipment manufacturers (OEMs), while increased vehicle launches along with the entry of new players in the utility vehicles (UVs) segment, would intensify competition, leading to a gradual change in the market share of incumbent OEMs over the medium-to-long term, says a research note.
 
In the report, India Ratings and Research (Ind-Ra) says, demand for new launches typically drops after two-to-three months thus broad-based revival remains elusive. 
 
"The initial pick-up in volumes could be the result of launch offers and/or customers’ penchant to migrate to the latest optimal choice in the market. The subsequent fall in sales suggests that the demand arises from a small segment of the consumer base, and it loses momentum with time, reaffirming our view that the sector is yet to witness broad-based revival. Unless the sector recovers, upcoming launches would be only marginally beneficial for OEMs and would not result in any meaningful improvement in the overall sales volumes," it added.
 
 
From the beginning of 2019, OEMs have launched approximately 25 new models under different categories such as utility vehicles (UV), sedan, and hatchback with an average of two models launched each month. 
 
Ind-Ra’s study shows that the sales of these new vehicles were strong in the initial two-to-three months post the launch, but declined in the subsequent months. For example, the volumes of TATA Harrier, launched in March 2019, have declined on an average by 24% on a month-on-month basis.  A similar trend was observed in the case of Honda Civic (2019), Mahindra Alturas G4 and Hyundai Venue.
 
According to the ratings agency, new launches could help OEMs remain competitive in the market. It says, "The multiple vehicle launches by OEMs could be partly attributed to the considerable investments made by these companies in previous two-to-three years in the designing and commercial development of these cars. We believe that, amidst a slowdown in the sales volumes, the new launches could enable OEMs to remain competitive and also monetise their investments to some extent."
 
Ind-Ra study also reveals that increased number of customers are preferring UVs, where competition is intensifying. 
 
Since the beginning of 2019, the UV segment has displayed greater resilience to de-growth compared to passenger cars, signalling growing customer preference for the former. Out of the 25 new launches in YTD 2019, 61% were UVs and 14% were crossovers. According to industry sources, over the remaining portion of 2019 till 2021, OEMs plan to launch over hundred new models, more than half of which would be UVs. 
 
Earlier, only few OEMs such as Toyota, Mahindra & Mahindra and Tata Motors had UV models. However, Ind-Ra says, since 2016, OEMs such as Hyundai, Maruti Suzuki and foreign players such as Jeep, MG Hector, and Kia have also entered this space. Therefore, competition in the segment has increased multi-fold, while the life-cycle of UVs has shortened. 
 
“Hence, we believe the market shares of OEMs in the UV segment are likely to change in the medium-to-long term, especially in case of incumbents. For instance, during April-August 2019, the market share of Maruti Suzuki, Honda Cars, Toyoto, Mahindra & Mahindra and Tata Motors declined by an average of 1.47% yoy, while that of Hyundai Motors increased by 7%," it concluded. 
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    Tomy Anto

    1 month ago

    have been working with talwalkars past 2years 7months as Asst. Vice president. After i joined, my boss - Operations head asked me to take care of 2clubs in north india. Even though i am not familiar with hindi language or people there still i agreed to go there and take care of the two stores given to me. Later i come to know that no one wants to go to this regions and work there or even incharges doest visit there. They sit in mumbai and operates only through phone and doent respect the staff.
    I have taken this offer as positively and gone there. I have noticed that this stores were highly potential in terms of sales but in the past whoever sr.Managers handled this stores were not visited this clubs and operated from mumbai and do not have any idea of the stores. Instead staff is making good pocket money and their income is more than the sr.manager salary. My first day when i visited one of the store in the city outskirts found that house keeping guy is sitting on the customer area and reading the paper without bothering anyone, no managers, no front desk team member... no one found. When i went freely inside the floor noticed that customers were shouting and no staff on the gym floor and instead few of the trainers are sitting in the pantry and chit chatting. Gym floors and toilets are stincking like a public toilet. People are desperately looking for job and discussing on money making ideas. No one is interested on jobs. I am not glorifying me i stationed at this city and started entering in to club at 6am and after few months of my hard work i could able to tune both stores and make a great team. Eventhough i am from south india still I stationed in the northern city and started focussing on team and customers. Sales started to come and complaints are reduced or solved immediately. Staff started to come to the gym on time and placed on their tasks. House keeping staff changed and put a new agency and clealiness improved. Same time my boss told me to take another 2 more stores in the surrounding cities. So I have taken the incharge for total 4 clubs. I have 2 zonal managers for this 4stores. Which my boss placed and they stay in mumbai. Every month they visit the stores and up and down their airfee, hotel charges, local transportation.. etc. come around 60k for both of them. Which means 7.2L pa. End of the day the club does not get any advantages for their visits andinstead it was a monthly picnic for them . I have requested my boss to shift one of them to north and stay over there or forget it.. i dont require the zonals and i can operate them instead of spending lots money for their travel. But those my advise or requests never taken or heard instead unwanted expediture went on high and did not take any actions on it. Stores were doing good sales, but no profit. service improved, i have made good team with sales & customer service focused, Maint. Issues were addressed timely. I have terminated many people who made money from years together at this 4clubs. This made me lots risk for my life.But sales were improved in a big way. I made My visibility at the clubs always. After 1year 6months my boss shifted me to Andhra,
    Tamilnadu for handling 7 stores. I started working with this 7 stores and i was sure i can do great achievement with this set team but within 5 months my boss shifted me to kerala market and the same story like north india. Pathetic stores, No sales, staff doesnt even listen to the Sr. Managers due to the unaccomplished promises, same model of head office style operating styles, big gaps between store team and Sr. managers. None of the stores are making profits. Eventhough i know malayalam languages and trying to mingle with the staff they said.... we hear this types of several gyans from mumbai managers and they never help us or support us. After my several teas and indivitual lunch with them i could able to gain the trust with them. Addressed lots of clealiness, maintenance issues, staff issues, sales, marketing ideas, customer issues.... etc. From december month to march that is 4 months out of 3 stores all 3 stores done the best ever sales from the day one the store was opened that is 6 years time. So kerala stores were highlated across the regions. My boss shifted me from kerala again and did not given any stores from april to october 2018 that is seven months ( till when i left the company) i did not operated any stores. 7months company paid me freely without giving me any responsibilities....
    when ever i asked he said i am working on it..My question is that which operator does this type of cheap politics to an employee...?? There was big politics between old employees and new employees the company made 2 reporting division and after that division also the politics seen within the new employee levels. People from out side mumbai were treated like slaves and our words doesnt get any voice. I understood the fact that the head of operation was a guy who can only talk and he doesnt have any guts on execution. His secratary or the executive was a decision maker for him and she became the vice president from executive levels without knowing any ideas of the clubs or at least one club running succesful. She eassily picked up kerala market from me / My boss given her the market to safe guard her job since it was got highlated and now that maeketic is come back to the old stage with agony. During my experience at talwalkars i noticed that the company and its directors or stake holders are too good. They respect staff, they are polite but the new set management was played an advantage with them. I remember when we call for meeting at Mumbai in the early hours... people from out station come to the head office at 8am and waiting.... managers from mumbai doesnt even come at 11am. If the meeting is suppose to happen at 9am.... it starts at 2pm. It is not once or twice time happened... several times. Every meeting should have some agenda but here what i have seen was only some chit chatting and arguments or ego parade.

    This type of gloomy leadership how can an organization can grow.
    Talks, Gyans and mails can give certain time covetage. Apart from this politics and gang making for unwanted and purpose or immaturity actions doesnt get mileage and that will slowly kill the organization... that was exactly happened here.

    Still this company can grow provided hire good Leader who has a good vision and respect staff and provide the promises. Create zero politics and follow one leader who in to customer, people, sales, profit front level priority.

    Because of few scrap people this company lost lot many good people who are performers. I write this just because i worked for this company sincerely with result driven but due to the politics i have been thrown out like curry leaves. It should not happen to any employees in any organizations.

    REPLY

    Maniti Pundhary

    In Reply to Tomy Anto 1 month ago

    How much will you fake yourself? You hardly visited the stores and your attendance were marked by front desk executive. That guy was scared of getting kicked out that's why he managed to follow your instructions. You have been the most careless and silent AVP. You have mostly been out of the stores and you did nothing to help the clubs growth. So fake.. U couldn't justified your salary.

    Jio Ups the Ante Against TRAI: To Charge 6 Paisa Per Minute For Calls to Rivals
    Reliance Jio Infocomm Ltd (Jio) while intensifying its agitation against Telecom Regulatory Authority of India (TRAI), has decided to charge 6 paisa per minute from all users who will call any other operator. Jio, however, says, since it will be providing equivalent data for the value of this top up voucher, there would be no increase for its subscribers. 
     
    In a statement, Jio says, "...for all recharges done by Jio customers starting Wednesday, calls made to other mobile operators will be charged at the prevailing interconnect usage charge (IUC) rate of 6 paise per minute through IUC top-up vouchers till such time that TRAI moves to zero termination charge regime. Presently, this date is 1 January 2020."
     
    There, however, will be no 6 paise per minute charge on all Jio to Jio calls; all incoming calls; calls made from Jio to landline calls; and calls made using WhatsApp or FaceTime and similar platforms, the company added.
     
     
    (*Equivalent minutes with IUC charged at 6 paise per minute, with additional charge for GST and processing fee, and duration of each call rounded up to nearest minute.)
     
    IUC is a cost paid by one mobile telecom operator to another, when its customers make outgoing mobile calls to the other operator's customers. These calls between two different networks are known as mobile off-net calls. IUC charges are fixed by TRAI and are currently at 6 paise per minute. 
     
    Jio says since 2011, TRAI has repeatedly affirmed its stand that the IUC charges should be brought done to zero. However, after bringing down the IUC charges to 6 paisa per minute from 14 paise per minute from 1 October 2017, and promising to make it zero, the regulator has not done anything, Jio alleges.
     
    It says, "Relying on the repeated stance of TRAI and the amendment already made to the regulations reducing the IUC to Zero, Jio continued to pay IUC from its own resources to Airtel and Vodafone-Idea among others while offering free voice to its customers. So far, in the last three years Jio has paid nearly Rs13,500 crore as NET IUC charges to the other operators."
     
    "Unfortunately, after the above order in 2017, while the incumbent operators reduced voice tariffs for their 4G customers, they continued to charge exorbitant tariffs to their 35 - 40 crore 2G customers, and in fact increased the tariffs for voice calls to around Rs1.50 per minute. They also charge a minimum of Rs500 per GB for data from their 2G customers," Jio added.
     
    According to the Reliance group company, the price differential of free voice on Jio network and exorbitantly high tariffs on 2G networks causes the 35 - 40 crore 2G customers of Airtel and Vodafone-Idea to give missed calls to Jio customers and its network receives 25 to 30 crore missed calls on a daily basis.
     
    "This huge missed call phenomena converts the incoming calls to Jio into outgoing calls from Jio to other operators. The 25 to 30 crore missed calls per day should have resulted in 65 to 75 crore minutes of incoming traffic to Jio. Instead, the call back made by the Jio customers results in 65 to 75 crore minutes of outgoing traffic. But for the effects of the tariff differential, especially the missed call phenomenon, the off-net voice traffic is already symmetrical now for Jio. It is being made asymmetric by the other operators by keeping their 2G voice tariffs high," it says.
     
    While levying 6 paisa per minute from its subscribers for making calls to other operator, Jio says it will provide additional data entitlement of equivalent value based on IUC top-up voucher consumption to ensure no increase in tariff for customers.
     
    "Post-paid customers will be billed at 6 paise per minute for off-net outgoing calls with increase in free data entitlement to the extent mentioned above," it added.
     
    You may also want to read…
     
     
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    COMMENTS

    P M Ravindran

    1 month ago

    For once my sympathies are with Reliance. Given that the missed call phenomenon is almost exclusively Indian, the the IUC is irrational and even biased in favour of the incompetent. But I am wondering why is the regulator not bothered about the poor service at high cost that the Airtel and Vodafone-Idea operators are providing to their 2G consumers vis a vis their own 4G consumers. Shouldn't the regulator intervene to neutralise this disparity/discrimination?

    Deepak Narain

    1 month ago

    Difficult to understand implications. Should be written in common man's language.

    SpiceJet allowed to self-handle cargo, private firms fume
    The Civil Aviation Ministry has allowed Ajay Singh-led SpiceJet to carry out self-handing of cargo from "off-airport facilities", causing heartburn among private airport operators.
     
    The order has been issued in accordance with ground-handling regulations (GHA), 2018 but has left some of the private airport operators miffed as this means loss of revenue for them.
     
    The private airport operators want all the cargo to move through the designated handlers at the airport and argue non-adherence of this may create safety issues.
     
    In its order, the nodal Ministry has said that SpiceJet would self-handle their cargo subject to required clearance from aviation security watchdog, Bureau of Civil Aviation Security (BCAS).
     
    "The matter has been examined in this Ministry in the light of GHA regulations and permission of BCAS to SpiceJet Pvt Ltd to self-handle its own cargo and it has been decided that necessary instructions be issued to airport operators to comply with above directions and facilitates all domestic airlines for self-handling of their own cargo from off-airport facilities in a seamless manner and ensure that no hurdle is faced by the domestic airlines by the airport operators in the matter," the Aviation Ministry wrote to BCAS.
     
    SpiceJet operates a dedicated air cargo service under the brand name SpiceXpress with a fleet of B737 aircraft. As in case of passengers, the airline has aggressively expanded its cargo operations on both domestic and international routes.
     
    SpiceJet has fast expanded its passenger operations, adding new planes to its fleet.
     
    Following Jet Airways shutdown last April, the government had waived a mandatory customs requirement to send the grounded airline's aircraft first to the lessor and then bring it back to India. SpiceJet had benefitted the most from the move as it allowed the carrier to swiftly take over the grounded aircraft of Jet Airways.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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