Well-liked car models Maruti Swift, Swift Dzire and Honda Amaze declined for the first time in years in April. Though companies credited the fall in wholesale front to inventory correction and seasonality, analysts pointed to increasing competition from the likes of Hyundai Xcent and Grand.
In April, volumes of compact sedan Amaze slid 30.85% to 3,355 units while its rival Dzire fell 17.67% to 16,008 units. Swift hatchback volumes slipped 4% to 15,874 units.
Only during the strike in Maruti Suzuki factories did the sales of Swift and Dzire fall in the last five years.
According to Maruti and Suzuki spokesperson, a single month’s wholesale figure does not reflect the right picture and it is not a right indicator of demand. “These figures vary depending on the several factors including the short-term stock correction. The combined retail volumes for Swift and Swift Dzire are up 8% in April,” the person said.
As per Jnaneswar Sen, senior vice-president for sales and marketing at Honda Cars India, bookings for Amaze remained strong in April. He attributed the volume fall to seasonality.
“Of both the cars, Dzire is more capable to hold on to its turf because Maruti Suzuki can play the discounting game to spruce up its volumes and offering Automate Manual Transmission (AMT) technology in Dzire may further help the company. As for Amaze, it is facing internal competition from City, which has got off to a good start,” he said.
While it’s still early days for Hyundai Xcent, it has already exceed Amaze to become the second-largest selling compact sedan in April.
Hyundai Grand continues to do well in the compact segment, putting pressure on Swift.
According to Rakesh Srivastava, senior vice-president for sales and marketing at Hyundai Motor India, the company has so far sold more than 82,708 units of Grand at an average of 10,340 per month. “Xcent too has carried the momentum ahead. With its strong value propositions, we foresee Xcent becoming a strong performer in its segment,” he added.
Though the compact sedan space is growing, with the entry of more models, it is will be difficult for Maruti Suzuki and Honda to hold on to the market share in the segment.