Manufacturers of new models struggle to expand production to keep up with a surge in bookings.
For the first time in a decade after it entered the Indian market, Ford has found it necessary to start a second shift at its Maraimalai Nagar factory in Chennai.
This is an attempt by the American motor company to bring down the huge backlog of orders for the Figo, the compact car whose record number of bookings has been only second to Maruti Maruti's Ritz. There have been over 15,000 bookings for the Figo during the past eight weeks. The company is asking its consumers to wait for five to six weeks for delivery.
Similarly, people have been queuing to book the Polo, the hatchback from the Volkswagen brand, positioned in the premium compact segment and dearer by about Rs 1 lakh than the Figo.
Volkswagen officials say due to limited supply of the car, half of whose components, including the engine, have to be imported, it has been forced to ask consumers to patiently wait for almost five months to get possession.
Toyota Kirloskar Motors, the Indian subsidiary company of Toyota Motor Corporation, was forced to turn down booking requests for its top-selling sports utility vehicle, Fortuner, due to inadequate availability of kits.
The company has not accepted any bookings for the SUV since February and does not intend to reopen the bookings before the end of next month. Officials say it has entertained only those requests (too few in number) which were on a priority basis and were too 'difficult' to turn away.
Newer options attract
Indian car buyers have swayed towards newer options offered by global car giants such as General Motors, Ford, Toyota and VW over the past couple of months, impacting sales of models which were once flagship ones.
WagonR, the second-largest selling brand of Maruti Suzuki, suffered a 27 per cent hit in March, when the company was able to sell just 11,084 units compared to 15,108 units sold in the same month last year, according to research firm JD Power and Associates.
Similarly, sales of Alto, the largest selling car brand in India, also declined by a whopping 30 per cent to 16,397 units as against 23,569 units in the same month last year. Tata Indica and the Honda CR-V also saw sales go down by 15 per cent and 77 per cent, respectively, in the reporting month.
Neeraj Garg of Volkswagen Group Sales India said, "Most people out there want a car which looks different than everybody else's. It is not necessary these days that you will buy the same brand your dad used to own. People want change and they are ready to pay the price for it."
While VW, General Motors and Ford are ramping up capacity, others such as Maruti Suzuki and Toyota are facing constraints in doing so. Demand for the low-cost van from Maruti, the Eeco, has gone through the roof, with monthly sales being close to 3,000 units.
Toyota is facing problems at its Bangalore-based factory, as the plant has only one production line which is used to manufacture three different vehicles. The company has to balance production so as to not hurt consumer demand or market share.
"We have doubled the production of the Fortuner to 950-1,000 units per month but even this is proving to be less. We will do a review in July," said Sandeep Singh, deputy managing director, sales and marketing, Toyota Kirloskar Motors.
With more cars lines due for launch, ranging from compact cars to mid-size sedans in the coming months, such as that of Nissan, Toyota, Renault, Honda and Ford, the market will see even more competition in future.