Last year, Alto pipped Volkswagen Golf and Fiat Punto to become the largest selling compact car globally.
Come next week, Maruti Suzuki is set to face a tough challenge as producer of the world’s largest-selling small car, Alto. Korean auto major Hyundai Motor India Limited (HMIL) is gearing up to launch its compact car on the domestic shores. Its name: Eon.
MSIL, as India’s biggest passenger car company, registers nearly half of its sales from the mini segment, Alto alone contributed to a fourth of its models sold in the last financial year.
The Eon, the smallest car developed by Seoul-headquartered Hyundai Motor Company (HMC) globally, is expected to be tagged upwards of Rs 2.5 lakh (ex-showroom). The Alto offers two-engine configurations of 800cc and 998cc. While the standard 800 cc engine powered car is priced between Rs 2.32 lakh and Rs 3.31 lakh, The 998cc K10 comes for Rs 3.04 lakh and Rs 3.20 lakh (ex-showroom, Delhi). Maruti Suzuki registers 60 per cent sales of from the 800cc variants. The remaining numbers come for the K-series versions that were introduced in August last year.
The original plan was to launch Eon in India in early 2012, but the Indian subsidiary of HMC would now launch the vehicle exclusively in the country on October 13.
The car comes equipped with a three-cylinder 814cc engine, and is wider and taller than the Alto. The Eon is said to have fuel efficiency of 21.1 kmpl, as compared to 19.73 kmpl from the Alto. All said and done, will Eon be able to end Alto’s seven-year dominance as the best-selling car in the country?
Yes, believes H W Park, president and chief executive officer, HMIL. “Eon will set a new benchmark in the Indian market with regard to styling, performance, safety and convenience,” he says. “The car will provide the best-in-class design, quality and technology to its customers.”
The Eon is targeted at first-time buyers. The car has been conceived, designed and developed over four years, keeping the Indian consumer’s preferences in mind. Chennai-based HMIL’s research and development team in Hyderabad worked in coordination with HMC’s R&D engineers in Korea to develop the Eon exclusively for the market in India. It sports the ‘Fluidic’ design characteristics of the refurbished Verna, which has thrown a serious challenge to the likes of Honda City and Volkswagen Vento in the midsize sedan market.
According to the Society of Indian Automobile Manufacturers (Siam), 244,880 cars were sold in the mini segment (cars with a length of less than 3,600 mm and having engine displacement up to 1 litre) between April and August this year. The 1981-founded MSIL, with M800, Alto, A-Star and WagonR, has 81 per cent share in the segment, whereas the 1996-incorporated HMIL (Hyundai Santro) and General Motors (Chevrolet Beat) have a percentage market share of 14 and 5.3, respectively.
Industry observers say grabbing market share from a company (MSIL) which has held sway over the small car segment in the country for nearly three decades, may not be as easy. Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers, notes the competition is going to stiffen in the segment with the Eon. “Maruti Suzuki has always read the market accurately and done things different in terms of product pricing and new launches. While the segment will expand, it will not be easy to make a dent in their market share.”
Last year, Alto tipped global bestsellers such as Volkswagen Golf in Germany and the Fiat Punto and Volkswagen Gol in Brazil to become the largest selling compact car globally. In 2010, MSIL sold 300,956 units, making the Alto , the first car to outsell global best sellers.
Maruti Suzuki hawked as many as 347,000 units of the car in the last financial year – an increase of 48 per cent as compared to the 235,000 units sold the previous year. The company sells on an average 32,000 units of the Alto every month. According to Siam data, HMIL sold 34,286 units of small car Santro in the first five months of the year.
Shashank Srivastava, chief general manager (sales & marketing), MSIL, says, “Eon does add to the competition in the segment, but Maruti is known for making small cars. Our cars have low cost of ownership and higher resale value.”
We have to see what package Eon offers.”
It was in September 2000 that Maruti Suzuki launched Alto in India. Over the past decade, the Delhi-hadquartered company has sold 1.67 million units of the car. Alto is the first car to have sold 100,000 units in a record time of 150 days.