Maruti Ertiga shows the way

At least five new multi-utility vehicles will hit the Indian roads in the next few months as automakers try to replicate Maruti Ertiga's success. Ertiga, which Maruti advertises as a life utility vehicle, clocked 35% growth in sales to 10,174 units in the first two months of the current fiscal.

Chevrolet's Enjoy, Nissan's Evalia, Ashok Leyland's Stile, Hyundai's Hexa Space and Force Motors' MPV will hot up competition for Ertiga at the entry level and Toyota's Innova at the other end of the price band.

Analysts say the new products will be an ideal mix of price and utility, something that Indian buyers have been waiting for long.
"Customers had been looking for right upgrade from hatchbacks in terms of size and utility. Unlike Innova, Ertiga offers a perfect preposition of a personalised vehicle," said Abdul Majeed, partner, auto practice, at PricewaterhouseCoopers.

NEW ENTRANTS

"It seats seven passengers and can also be maneuvered easily," PricewaterhouseCoopers' Majeed said about Maruti's Ertiga, underlining the increasing room for MUVs that offer an easy crossover option to buyers. Growth in India's MUV segment has lagged that in other vehicle classes.

The entry-level vehicles Sumo, Rhino Rx and Xylo were available for long, while Tata Motors' Aria could not make a dent in the market primarily because of its higher pricing. In this scenario, the Ertiga, with at an entry price tag of Rs 5.9 lakh, is considered a good bargain.

Mayank Pareek, managing executive officer (marketing & sales) at Maruti, said, "Eritga's compact size and big interior makes it a good vehicle for multiple needs."

Ertiga's healthy sales volume could be a cue for companies looking to boost revenues in a country where the growth story appears to be faltering. India's GDP growth dropped to a nine-year low of 5.3% in the last quarter of 2011-12, according to official data released in May. First off the block among the new launches will be Nissan's Evalia. The Japanese carmaker, which will be starting Evalia's trial production soon, is expected to launch it in late August.

"We have finalised the vehicle and we are looking at introducing it around the festive period this year," said Takayaki Ishida, CEO and MD of Nissan Motor India.

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CAR SALES

Car sales in India, a gauge of economic activity in the country, were subdued last month, as rising fuel cost and higher excise duty hit demand. The government increased petrol prices by about 11% in May.

According to some senior executives, sales continue to be sluggish for most brands, except for Maruti's DZire and Ertiga, Honda's Brio, Hyundai's Verna, Skoda's Rapid, Mahindra's XUV500 and Toyota's Innova. Last month, Maruti posted a 4% dip in sales while Hyundai Motor said sales rose just 3%.