Wagon R fights solo towards fast-moving SUVs

At an ex-showroom beginning worth of 8.2 lakh, Brezza was manner past his price range. On street, the bottom variant would have price over 9 lakh.

“ my requirement and price range, the gross sales government urged Wagon R. I used to be not very enthused and needed one thing extra placing as my first new automotive (he had a pre-owned Maruti 800). Finally, the pinnacle prevailed over the center,” Sahu says.

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Graphic: Mint

As an insurance coverage agent, Sahu must journey lengthy distances round Kanpur and the upper mileage and decrease operating price of the compressed pure fuel (CNG) variant he purchased has resulted in fast financial savings.

Almost a 1,000km away, in Hooghly, lawyer Mahesh Chandra Das additionally purchased a Wagon R in January however for very totally different causes. He says having a automotive is a matter of status within the society. And he can cost a bit extra from his shoppers as charges!

“A automotive is an indicator that you’re doing nicely in life and reassures shoppers about my credentials,” Das says. “I needed a automotive which was not very costly to purchase or keep but in addition not entry-level, like Alto (additionally from Maruti) or Nano (Tata Motors), which appears like a compromise. Wagon R match the invoice completely.”

Up north in Moradabad, businessman Viraj Sandhu purchased the automated model of Wagon R final yr—the hatchback joined his fleet of a Toyota Fortuner, a Skoda Octavia and a pre-owned Mercedes E Class. Sandhu makes use of his Wagon R for each day runs, across the congested alleys of the town. He swears by its effectivity and compact dimension. “I hate to confess however I fairly prefer it. It’s low on frills and never very refined. However it will get me out and in of slim streets like no different automotive. Now, I can’t even think about driving the opposite automobiles within the metropolis,” he says.

The range in profile that Sahu, Das and Sandhu symbolize, highlights the just about common attraction of the automotive that first made its debut in India in 1999. Again then, it was Maruti attempting to play catch-up with Santro, a hatchback from South Korean carmaker Hyundai Motor India Ltd. Backed by a powerful advertising muscle, one which concerned actor Shah Rukh Khan, it had made its debut a yr earlier and took the market by storm.

Greater than 20 years later, Wagon R is witnessing a grand renaissance of kinds whereas most of its contemporaries have both exited the market—like Santro—or have fallen by the wayside.

In 2022-23, Wagon R was the most important promoting automotive within the nation for the second consecutive yr. Furthermore, its annual gross sales have been the very best ever, topping 200,000 models for the primary time. In a market infatuated with sports activities utility autos (SUVs), the automotive is an outlier.

“Am I shocked by the robust exhibiting of Wagon R in the previous few years? I can by no means conform to that. However within the context of how the others have fared, it’s outstanding,” says Shashank Srivastava, government director, advertising and gross sales, at Maruti Suzuki. “No less than, we now have at all times believed that small automobiles are essential for India and Wagon R is the right instance.”

Loss of life of the small

The marketplace for passenger autos in India is buoyant. In 2022-23, the phase grew almost 27% to a document excessive of three.89 million models. That is greater than 40% of the pre pandemic tally of 2019-20. However the progress just isn’t homogenous—it’s led largely by SUVs.

Within the final decade, sale of SUVs shot up, from simply 270,000 models in 2009-10 to over 2 million models in 2022-23. Throughout this time, the small automotive phase shrunk from 1.19 million models to 1.64 million models. In 2009-10, SUVs accounted for less than 14% of the general passenger car market whereas small automobiles held the lion’s share of 61%. Immediately, the tables have turned, with SUVs cornering 51.5% of the market; small automobiles are right down to 42%.

“The small automotive market, comprising of sub-four-meter sedans and hatches, is slowly de-growing. SUVs are rising,” says Niranjan Prabhu, founder, Cargraphical Analytics Options, an organization that gives automotive evaluation.

Most small automobiles in India are nicely off their peaks.

Very long time bestseller Alto, one among Wagon R’s most formidable rivals, is down over 48% at 179,698 models in 2022-23, from 346,840 models in 2010-11. Others like Maruti Swift, Celerio and Dzire are down 21%, 41.5% and 40.7%, respectively, off their peaks in 2018-19. The Hyundai Grand i10 is down 28% from its peak in 2017-18. The Renault Kwid, which had a dream begin with over 100,000-unit gross sales in its second yr in 2016-17, is now down over 80% at lower than 20,000 models. Final fiscal, Maruti S-Presso couldn’t even match its six-month gross sales numbers it recorded in 2019-20, its debut yr. Even the premium hatchback from Maruti, Baleno, a comparatively newer automotive, is 4% under its 2018-19 tally. Its rival from Hyundai, Elite i20, is down over 40%.

In the meantime, Wagon R’s contemporaries—other than Santro, there was Tata Indica—are all consigned to historical past. The outdated Santro was initially discontinued in 2014-15, just for the corporate to appreciate its mistake. The automotive was re-introduced in 2018-19 however it by no means took off and Hyundai pulled the plug once more final yr.

The Tata Tiago, launched in 2016, changed Indica as a direct competitor. At 77,428 models, Tiago can also be 16% under its peak of 2018-19.

There are a number of the explanation why most small automobiles are struggling. Rising price of entry-level automobiles, on account of modifications in laws like security and emissions, have coincided with decrease disposable incomes amongst a bit of middle-class shoppers. On the mid and premium ranges, the place affordability is much less of a problem, the onslaught of SUVs like Nexon (Tata), Brezza, Venue (Hyundai) and, extra lately, Punch (Tata) is being felt. But, none of it has impacted Wagon R, to date.

That’s much more spectacular contemplating that there’s not a lot distinction between the value of Wagon R and the entry-level worth of some smaller SUVs. The Wagon R’s worth ranges between 5.52 lakh and 7.43 lakh, ex showroom, in Delhi. As compared, the micro-SUV Punch begins at 5.99 lakh.

“It’s a money cow for Maruti. Their core competence in squeezing prices out of the system has ensured that each one different rivals are slowly however certainly dying,” says Prabhu of Cargraphical. “Much less choices imply it has consolidated its maintain within the small automotive phase,” he provides.

The jury is split on whether or not the SUV rush will ultimately impression Wagon R. To date, there may be little hostile impact. However extra SUVs are on their manner and the script can alter, going forward.

“The appearance of micro-SUVs, like Punch, and the upcoming Hyundai Casper (named Exter in India), might pose some competitors however Wagon R will have the ability to face up to it on account of its fame and model loyalty,” feels Ravi Bhatia, president, JATO Dynamics, a market analysis firm.

One thing for everyone

There are different elements behind the model’s overwhelming success. The provision of a number of choices—the automotive comes with two petrol and CNG powertrains; with handbook and automated gearboxes—means it caters to a wider set of shoppers. One in each three Wagon offered within the nation as we speak is a CNG, the very best for any model. It’s also the automotive of alternative for fleet and taxi operators that account for 13% of its gross sales, once more the very best for any model within the nation.

The updates have additionally helped. It was final overh
auled with a brand new platform in 2019, the second time in its 24-year lifespan. Extra options and a much bigger 1.2 litre engine, along with the prevailing 1 litre powertrain, gave a brand new lease of life to the model. Gross sales have rebounded and grown ever since.

“Greater than 40% of gross sales are from first-time patrons however the Wagon R buyer can also be very sticky. Repeat prospects account for one in each 4 automobiles which can be offered as we speak,” Srivastava says.

There’s one obtrusive omission although—the absence of an electrical model. As probably the most extensively used taxi automotive, there’s a ready-made marketplace for an electrical Wagon R.

“Wagon R is the ever-present metropolis taxi and if Maruti can deliver an electrical model, I would be the first within the queue with a ten,000-unit order,” says Anmol Singh Jaggi, co-founder and CEO of BluSmart Mobility, a experience sharing firm. “It’s going to considerably increase the marketplace for us.”

Although Maruti is retaining its playing cards near its chest—its first electrical automotive will hit the roads solely by 2025— Wagon R electrical just isn’t totally off the desk.

“It might positively add important volumes because the model recognition and belief that prospects have in WagonR would give it an edge over the competitors,” says Bhatia of JATO Dynamics.

Security howler

Nonetheless, Wagon R just isn’t excellent. In reality, there are query marks round security.

In a number of crash checks performed by the International New Automotive Evaluation Programme (NCAP), a challenge run by UK-based charity In direction of Zero Basis, Wagon R has at all times been discovered wanting. In latest checks performed solely final month, it scored only one star for grownup and 0 for little one security. When it was examined in 2019, the automotive scored two stars every for grownup and little one security. A rating of 5 stars implies higher security.

“Wagon R additionally provided weak chest safety for the motive force regardless of the enhancements within the restraint methods by Maruti Suzuki for the reason that earlier model of the mannequin was examined by International NCAP,” the group stated.

“Some automotive makers develop their automobiles to simply go a check; others to guard individuals. I feel Maruti Suzuki is simply aiming to go regulatory necessities and never aiming to essentially shield the passengers, which ultimately, are their prospects,” says Alejandro Furas, secretary normal of International NCAP.

Worse, the structural bodyshell integrity of Wagon R, which measures the power of the automotive to resist impacts, was rated unstable. It implies that even the addition of security options comparable to airbags won’t essentially make the automotive protected.

Maruti Suzuki has at all times rubbished these stories. “India’s crash security laws are virtually much like the requirements in Europe and all our fashions meet these laws and are duly examined and licensed by the federal government of India,” an organization spokesperson stated.

Throughout a media occasion in December lastt yr, chairman R.C. Bhargava performed down the outcomes of those crash checks. “NCAP is funded, to a big extent, by automotive part producers, like airbag producers. Anyone is selling the NCAP commonplace for some cause, please don’t get taken in by it…” he had stated. “I can say with full confidence that placing in NCAP requirements in automobiles may have no important impression on the variety of accidents,” he additional added.

Going by Wagon R’s gross sales efficiency, Indians maybe consider what Bhargava says. Or, the massive model loyalty the automotive enjoys merely overrides each different concern.

“I don’t find out about crash checks; it doesn’t really feel unsafe to me. No less than, it’s safer than a motorcycle,” says Satyapal Babbar, a Noida resident who drives an eight-year-old Wagon R.

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