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Prospective car-buyers redefine basic car concept

Veeresh Malik in New Delhi

Slowly but surely, the Indian car buyer/owner is acquiring new tastes and shedding a few old ones as car-makers proliferate, offering this feature and that.

Take price for example. The Indian consumer has for long been motivated by the value-for-money (paisa vasool, as they say) concept. Yet, this has not deterred Hyundai Motor India Limited from increasing the price of the base model of the Santro by Rs 6,000 from today. Now, the ex-showroom price of the Santro in Delhi is a shade under Rs 300,000.

The base/standard model of the Santro (with air-conditioner, without stereo system, power windows, power steering) in solid colours has proved to be the most popular version. It has attracted almost 60 per cent of all Hyundai's sales so far. Other versions would be sold at old prices, but it is doubtful if prospective buyers in this segment will buy anything else than a basic car with air-conditioner.

The story is same at Maruti and Daewoo. Customers want the air-conditioned Maruti Zen LX and the Daewoo Matiz SD, both available at about Rs 300,000 in Delhi. Other higher and lower versions are not in demand comparatively.

According to industry analysts, for the value-pack seeking Indian car customer, an air-conditioner is no longer a luxury; a stereo, however, is something very personal, to be chosen with care and thought and retro-fitted after the car is bought.

Power windows and power steering are not perceived to be of much benefit. Expensive metallic shades are perceived to be costlier to maintain, thus avoidable.

Similarly, colour-coded bumpers have outlived their "value", and it is back to practical black. Upmarket upholstery, factory fitted, is also not something buyers are willing to pay for at the time of buying a new car.

A battle is on the cards for this evolving Rs 300,000 value-pack segment. Lengthening waiting lists for all the three cars (Santro, Zen and Matiz) indicate a price stability in the medium term.

The real price-war is, however, expected in the emerging (as different from evolving) lower end sedan three-box segment. It is said that new cars from Hyundai (LC) and Ford (Ikon) will have to find levels close to Rs 400,000 to take on the new Ambassador from Hindustan Motors.

With Daewoo offering a fully loaded version of their Cielo (Executive) at Rs 535,000, and the effective price of the Maruti Esteem dipping to below Rs 500,000, a major price-war in the so-called mid-size luxury segment is also imminent.

Analysts feel this may eventually lead to lower prices.

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