Saturday, 16 April 2011

The Changing Motoring Scenario in India

Year 2011. Could be just another year in history of India or it could be the most important. A lot of scams were unearthed. A whole nation rose to support a cause which was started by one single person and shook the government. Government(s) started new initiatives to bring huge investments into their states (Vibrant Gujrat). A natural disaster, on verge of becoming a nuclear calamity in Japan. Revolutions in middle east. The list goes on. While many issues affect millions and billions in the world, a few things happened in India which would affect few who have millions and billions. India saw launch of super exclusive cars and bikes in this very year. Gone are the days when we had just two cars – Premier Padmini and Ambassador to choose from. Today there are hundreds of car models out there, suiting every budget. Not only we have several sub 10 lakh rupee cars, we have several crore plus cars and several Rs 10 lakh + bikes. While the nation’s billion strong workforce moves on 100 cc commuters, a few, who have billions can now choose between a Ducati Diavel and VYRUS it they want a really fast motorcycle. TATA got international recognition to India’s car industry by launching most affordable car they also bought British luxury marquee JLR. Traffic Jams are becoming a common place in most Indian metros thanks to about 23% growth in car sales. While most of the people would be stuck in the jam in their alto’s and i10’s, there would be few who would be sitting behind the wheels of super luxury or super cars. Let us take a look at super exclusive cars which were launched recently in India:

-          Buggati Veyrone – Ex-showroom price about Rs 16 crores

-          Koenigsegg Agera – Ex –showroom price Rs 12 crores

-          Aston Martin one-77 – Ex-showroom price Rs 20 crores (besides other Aston Martin cars)

These are ‘super exclusive’ cars which hold show-off value even for ultra rich. Then there are the ‘usual’ cars for the rich – Maserati  (their entire range), Ferrari (to be launched soon), Audi R8 spyder, Lamborghini and Porsche line up. I am not even talking about luxury sedans from Bentley, Rolls Royce, BMW, Audi, Mercedes. The list if long.

Let us take a look at the bikes now. Indians buy about 1 million (10 lakh) bikes every month. Yes every month! But we also get several bikes which cost in excess of 10 lakh rupees. Ducati has recently launched their latest Diavel besides having their whole range of motorcycles in the country, Yamaha has the R1 (my favorite), the FZ1 (relatively cheap at Rs 8.5 Lakhs), Vmax and MT01. Suzuki has their Hayabusa, the GSX 1000R. I think they might be the only company in India who sell more super bikes than their ‘normal’ sedate bikes. J Kawasaki has launched the mini-superbike Ninja 250 an planning to bring more. Honda has let almost every auto journalist ride their super bikes across the country. It only shows their seriousness in that niche market. They have their VFR in India. Harley Davidson must be having the biggest line-up of bikes in India after Bajaj (someone do the math and let me know if I am wrong – I will correct it).

Now let’s come to the point. (Being a consultant, I tend to throw out a lot of data before talking anything sense). Why are they being launched in India when the numbers sold would only be a very very small fraction of total market? Also, number of luxury cars sold in India is a fraction of manufacturer’s global sales. BMW sells more 3 series in Germany than Maruti sells Swifts in India. The answer to the first question is  -  even than small fraction is a huge number. Answer to the second question is dwindling domestic markets for manufactures and growing market in India. They are not looking at sales in next 1-2 years, they are looking at having a mega share in Indian market 10-15 years down the line. They do not want to be late entrants. Audi’s and BMW’s would’ve established their names pretty well in India by next decade when Indians might be buying more more of their cars than Germans.

I have another concern though. While we get really expensive cars in India, we do not get affordable ‘fun’ cars. I would love to have a 1.6 litre, 120 bhp rear-wheel driven hatchback. I would love to have something like KLR 650 from Kawasaki for off-road touring. But I know such bikes/cars would not be launched in India. Why? We Indians go for ‘looks’, ‘brand image’, ‘show-off’ value. I have seen several of my non auto-freak friends pose in front of cars and bikes because they looked good. I have heard so many tell me – “You should’ve bought the i20, it looks so much better and then its Hyndai – better resale” blah this blah that. “Driving pleasure”, the most important thing for me takes a back seat for majority of car buyers. They talk about ‘re-sale’ before they talk about ride quality. Yeah, I want to discuss about divorce even before I am married.

Plus we tend to over analyze. I have seen several rants by so called ‘biking enthusiasts’ about the pricing of Ninja 250 and several rants about ‘not enough bike for that money’ for CBR 250. See, if you cannot afford it, stop cribbing, go out there and make more money. How does it make you any different than the mass of people buying bikes for practicality rather than love of them. Love is blind. It does not look for explanation. Yes, we need to have lower duties for bikes or policies in place to bring in manufacturers to make India a base for manufacturing their bikes and exporting them. But then as long as that does not happen, stop complaining.

Also, the fuel is pretty expensive considering PPP. So, while a 1.6 ltr hatchback might cost less than Rs 7 lakh, the mileage it would offer, a person might find difficult to afford the petrol everyday to go to office. Also, even several enthusiasts might not be able to afford one car for fun and one for commuting.

In the end, I am pretty happy with the things where they are headed in India. We are getting more conscious of our rights, are working hard to sustain a high GDP growth, Indian farmers are making record food productions so that the other workforce is well fed. While we commute to work to sustain India’s growth, we can atleast be stuck in a Jam in a really nice car/bike or just see it next to us and be motivated to work hard enough to be able to afford it.