Prime car models on phase-out mode

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Lower demand, cannibalising sales of newer models main reasons

MARUTI ZEN ... on it's way out?
MARUTI ZEN ... on it's way out?

Neha Kaushik

New Delhi, April 2

The current year is not only set to see a slew of car launches, it will also see a number of popular automobile models being phased out.

Prime among them are the Opel Corsa and the Maruti Zen, and the market is abuzz with rumours of the Hyundai Accent also being on the phase-out trail.

Industry analysts point out that the phasing-out trend may become more prevalent as companies juggle their product portfolio to ensure optimal efficiencies in production and of course sales.

"Companies usually phase out models when they see no more life left in them and if it is cannibalising sales of newer models," said Mr Pradeep Saxena, Senior Vice-President, TNS Automotive.

For instance, take the case of the Maruti Zen, which has been around for a decade and has sold more than 5.7 lakh units.

Decline in sales

Industry sources point out that sales of the Zen saw a steady decline after the launch of the Swift, probably affecting the growth of models such as the Wagon R and Alto. Further, since Maruti already had three other models addressing the compact car segment, it would make sense to phase out the Zen.

Similarly, General Motors (GM), having received a good response to vehicles under the Chevrolet brand, has decided to phase out the Opel brand, consisting primarily of the Opel Corsa, from the country.

While GM has sold 47,500 Opel vehicles in India till date, the sales had halved over the past couple of years. For instance, while Opel sales in 2004 stood at 8,369 units, sales dipped to 4,883 units in 2005. In contrast, sales of vehicles under the Chevrolet brand stood at 25,954 units in 2005. Further, GM has just launched the Chevrolet Aveo addressing the mid-size segment. Market analysts, however, are watching with interest as to what strategy Hyundai adopts for the Accent, which despite seeing a dip in sales still has "life left."

Accent's future

According to sources, Hyundai would be introducing the Verna later this year, which would eventually replace the Accent. Sources said the launch of the Verna may be advanced from the earlier planned September to as early as May. "It would be bad strategy on Hyundai's part to phase out the Accent now as the model still enjoys significant volumes. The company may, however, decide to adopt the production-on-demand strategy for the model," said a marketing analyst.

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(This article was published in the Business Line print edition dated April 3, 2006)
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