The Hindu Business Line : Time for another car

To say that Ashok Kumar, a Bangalore-based promoter and builder, is fond of cars would be an understatement. His family has changed seven cars in three years and, personally, he has changed three. "I like to try out all the new launches," he says, reflecting the mood of the present-day consumer. Kumar prefers the `C' class of cars and presently drives a Hyundai Terracan.

Unlike old times when passion for cars meant owning and cherishing a single car for two decades or more, today's car lovers would rather own and drive the latest model off the block. This desire is also fanned by the fact that car manufacturers roll out new versions and models almost every month. According to industry experts, an average consumer in the country today changes cars every three years — after they have paid the last instalment of their car loan.

Navin Sarawgi, CEO of Bimal Auto Agency, a Maruti car dealer in Bangalore, says conventionally, people make their entry into the market with a used car. "Then they move to a new Alto or an 800." In terms of volumes or the number of cars sold, Bangalore comes third in the country after Delhi and Mumbai. The city's offtake is about 5,000 cars a month. "But Bangaloreans are among the most technically qualified customers in the country. They are an informed lot, they analyse their purchase well before they make it. They do not go just by an exterior evaluation of the car," says S.V.S. Gupta, Director, Advaith Motors, a Bangalore-based Hyundai car dealer. Agrees Shyam M.P., Director, Advaith Motors, "They come here after reading a lot on the Net and are highly knowledgeable."

But, when it comes to spending, he feels Bangaloreans are still conservative, compared to, say, Mumbai or Delhi. "It's just a hype that the IT city is indulging in luxurious cars. I find that Bangaloreans do not stretch beyond their budget." Statistics show that among car buyers, about 33 per cent are first-time buyers, another 33 per cent sell their existing cars and buy new ones, and the remaining 33 per cent are adding another car to their stable.

The two-car families in metros are an emerging trend now. "With both husband and wife earning, and public transport becoming unreliable in Bangalore, there is a growing market here," says Gupta. Gurjeet Singh, Managing Director of Dakshin Honda, a Honda car dealer in the city, says that though 70 per cent of the city's car sales comes from the small car segment (A1 and A2), there is a significant demand for higher-priced vehicles, like those in the B and C segments. "For instance, Honda sales are increasing every month," he says.

In July, Dakshin Honda sold nearly 250 cars out of which 50 per cent were fully loaded vehicles, 40 per cent came from the mid-segment and 10 per cent from the automatic segment. Gupta of Advaith says SUVs have become popular in Bangalore especially among politicians, businesspersons and software engineers who have turned wildlife enthusiasts. Says Punitha Jain, an IT-sector employee who has just moved from her four-year-old Hyundai Santro to a Honda City, "In Bangalore and in the IT sector, peer pressure plays a great role in the purchase of new cars. My colleagues, who change their cars every two years, were my greatest cheerleaders when I finally changed my car after four years."

Singh of Dakshin Honda explains the increasing role of women in the purchase of a new car. "In my opinion, women decide on the budget and the car segment. I also find that women are very aware of the technical aspects." Sarawgi agrees. "I find that kids too have started voicing their opinion in these decisions... especially, when it comes to colour and accessories."

He says people generally spend 3-4 per cent of the car value on accessories. Though accessories such as music systems, central locking, leather seat covers, paint protection systems, mobile chargers and alloy wheels have become the order of the day, there are quite a few customers who come looking for DVDs, sunroofs, multimedia systems, etc. Kumar P., Director, Methods Accessories, estimates the accessories market in the country at Rs 250 crore, with Bangalore contributing about eight per cent to this figure. He says people spend about Rs 10,000-15,000 on accessories soon after the car purchase. There are people who add fancy accessories later, such as getting sunroofs and multimedia systems.

Sunroofs, made from high-grade plastic and most of them imported, cost anywhere between Rs 35,000 and Rs 1 lakh. In fact, Methods fits about 100 sunroofs a month in Bangalore alone, says Kumar.

Though fancy accessories are very popular, the current demand is for performance-based systems to fit into cars. "Take, for instance, air filters. Cars fitted with these offer better horsepower, fuel economy and suspension. People are spending about Rs 4,000 on performance-related products. This starts with filling better fuel like Power or Speed," he says. Another burgeoning auto-related market is in the car care and maintenance category. For example, the security systems market is worth about Rs 100 crore in India. Methods is planning to bring an imported brand of roof carrier systems into the country that costs anywhere between Rs 10,000 and Rs 20,000. This could be a good investment for adventure tourists who like to carry their bikes or boats on their car-roofs, says Kumar, who's very upbeat about the market for this product.

And like Mohit Paranjpe, a finance executive says, "As we are spending longer and longer hours in cars, they are like our second homes. They have to be comfortable and reflect our personalities."

Picture by G.R.N. Somashekar

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