Luxury Cars Line up to Big Hearts

After the pin-up girl set afire the roads here, it's the turn of the emperor to enthrone itself in the hearts of car-crazy Hyderabadis.

Yes, we are talking about the increasing number of premium segment luxury cars that are being lined up by auto majors in the city that once entered the books of fame for recording the highest number of bookings for the Merc when it was introduced in India.

Turning the heads this time is Hyundai Sonata, which debuted here last week, after having hit Korea in January this year, and five major metros in India in July.

Despite the slowdown, the auto manufacturers and dealers alike are upbeat and enthused by the market. Not surprising considering that though the small car segment has remained stagnant over the last year, the luxury segment has seen a growth of 20 per cent in Hyderabad.

With improving roads/infrastructure, manufacturers are creating products for the luxury segment, and people are slowly graduating to premium cars. Manufacturers are buoyant about the market as commuting needs increase by the day and the spending power of people is on the rise, says Sunil Talwar, ex-president AP Motor Vehicles Dealers Association.

"People are willing to spend on lifestyle and making a statement. There is an exposure to the West and the quality of life in the city is improving and we are on the footsteps of becoming another Bangalore or Mumbai. There is a lot of prosperity around. Where did you find such beautiful showroom some years ago?" he asks.

The prosperity created by the IT has managed to sustain itself and we have lot of customers from GE, Microsoft, Satyam, Oracle and other software companies, as we have from Dr Reddy's Labs, from business communities like jewellers etc., he adds.

Not surprisingly, Hyderabad contributes to one of the highest share in the total industrial volumes, at 8 to 10 per cent of total sales.

In Hyderabad alone, the TIV in the luxury segment is around 400 cars a year, with 100 more in the state, as against a total of 6,000 to 7,000 countrywide. The TIV of cars in all segments in Hyderabad is also as impressive, with 17,000 - 18,000 a year as compared with five lakhs countrywide.

The response to the Sonata seems to prove this. In just two days of launch, there were 32 bookings in the city alone, and we aim to sell at least 25-30 a month, says Saral Talwar, director of Talwar Hyundai, dealing in Hyundai.

"The luxury segment is growing by 17-20 per cent countrywide, while in Hyderabad, it's growing at a higher rate of 25 to 30 per cent. We expect a lot of players to enter the segment of Rs 15 to 20 lakhs, including Skoda Octavia, Ford Mandao, and Opel Vectra, in the next few months," he says.

"Looks-wise, it's classy and sporty, resembling the Merc in the front, and Jaguar from certain angles. And the looks are attracting chunk of the customers. Also, there were no cars in the range between Hindustan Motors' Mitsubishi Lancer SFX of around Rs 9.5 lakhs and the Mercedes Benz of 21 lakhs. We fill that gap and expect to grab part of their market as well as create a new one," Saral says. Priced a wee bit lower than the Honda Vti MT which is approximately Rs 14.95 lakhs ex-showroom, Sonata is available in two variants -- Sonata GLS, priced Rs 11.86 lakhs, and Sonata Gold, priced at Rs 13.05 lakhs.

It's available in six colours -- exotic silver, celadon green, ebony black, noble white, prime beige and modern grey, and boasts of a Sirius-II 2.0 Litre, dual overhead camshaft, 16-valve engine that delivers a power of 133.8 ps at 6,000 rpm and a torque of 16.7 kgm at 4,5000 rpm.

Some of the unique features include the front hood top mark, chrome radiator grill, front fog lamps, head lamps with projection lamps, anti-lock braking systems, traction control system, full leather upholstery, leather steering wheel, 8-CD changer, auto AC, air purifier, trip computer, 15" alloy wheels, etc.

Hyundai claims it's the market leader in the premium category here with its semi-luxury car Accent garnering 35-40 per cent of marketshare. Hyderabad alone sold 90 vehicles in a single month in August, as compared with 65 in August last year. The pricing is not too high-end, with Accent GLS, the top-selling version priced at Rs 6.02 lakhs ex-showroom, and Accent GLX at Rs 6.58 lakhs.

The company would soon be introducing Elentra in the range of Rs 17 to 22 lakhs, or Kiaspotage, an MUV of Rs 7-12 lakhs," the dealer says, adding however that there are no plans to introduce Tiburon Turbulence and Grandeur showcased earlier this year. However, Mercedes Benz and Hindustan Motors-Mitsubishi are not worried about competition from the Sonata.

"Sonata can't be a competition for the Merc, which is a very powerful brand. It is a question of branding and personality. There is no comparison. The pricing and the bracket is entirely different," says an official at the sole Mercedes outlet in the state.

"The Merc will always be there. The Merc customers may go in for a Sonata as the second luxury vehicle in the house. We are still selling 7-8 Mercs C Class a month in Hyderabad, and 3-4 E class," he adds.

Agrees S Vasudevan, head of southern region, HM-Mitsubishi: "Am not too sure Sonata will compete with Lancer because in this segment, customers are owners of multiple brands. There will be no cannibalisation of market."

The Lancer experience has been extremely good capturing 47-48 percent of the marketshare here and 45 per cent countrywide, in this segment. We are selling 30 vehicles a month here since January 99 launch.

The luxury Lancer SFX, at Rs 9.5 lakhs ex-showroom, features coiler of Mitsubishi Motor Corporation, front and rear air dams, anti-skid pedal, fog lamps etc.

Despite drop in overall demand by 37 per cent in this category, with Lancer dropping by 21-22 per cent, due to the slowdown, in terms of volumes we have grown even in depressed demand situation, from 38 per cent to 45 per cent marketshare, he says.

With a new strategy, it aims at consolidating its position. "My Lancer" initiative is expected to boost sales. We have got 400 enquiries and 60-70 bookings in 4 weeks countrywide, with 60-70 enquiries and 10-11 bookings from Hyderabad alone, he adds.

Meanwhile, General Motors is too content with its performance of Opel Astra Club and Opel Corsa Royal. "The market for niche products to suit the lifestyles and tastes of Hyderabad is extremely good. The sales of luxury cars has been growing," says Mr Surender Singh Makhija of ASCO Mobiles, dealer of GM's Opel models. The response to Astra Club alone has far exceeded expectations, with an average sales of 8-9 cars a month in the city, and 28 in the year ending April 2001. We have sold 10 more since then. The car, introduced with a MID (multi-intelligent display) for the first time in India, and with a sun roof, is priced at Rs 9.5 lakhs ex-showroom.

"We sold a total of 69 cars from the Opel Astra stable. We have also sold 42 cars of the Opel Corsa Royal, also a luxury car priced in the range of Rs 7 lakhs since 7-8 months of its launch, he adds.

And with financing only playing a symbiotic role, both customers and manufacturers are equally happy.

"Though it is one of the highest cash-rich markets, with only an average of 70-75 per cent of the cars being financed (in other cities 90-95 per cent are financed), financing has made car buying easier. The interest rates between 9.5 to 13 per cent and pay back periods of 3-7 years have made life simpler and more comfortable," they add.