The automobile industry has registered an awful performance in sales in the last few months. Almost all mainstream players in the commercial vehicle sector- Maruti Suzuki India, Hyundai, M&M, Tata Motors and Honda reported double-digit fall in sales in August, as compared to the same month in last year.
The demand for SUVs priced between 12 lakh-18 lakh like Kia Seltos, Tata Harrier, Hyundai Creta, Renault Kaptur and Nissan Kicks is at an all-time low. However, amid this general trend, there is one exception- the Hector by MG Motor. The United Kingdom based SUV manufacturer which entered in India with their new brand- the Hector has sold 3,526 units in a period of just two months. The company has to put a temporary halt at advanced booking as 28,000 units have already been booked.
MG Motor has put 11,000 customers in the priority list, as a thousand others have to wait to get their dream car. “We are extremely overwhelmed with the response that the MG Hector has received. We remain strongly focused on fulfilling the 28,000 bookings, as part of our commitment to ensure customer satisfaction. The strong momentum for the Hector has continued with over 11,000 additional customers registered on our priority waitlist after bookings were temporarily halted in July this year because of the huge response,” said Gaurav Gupta, chief commercial officer, MG Motor India.
MG Hector is being loved because it has many features of the luxury vehicle including a 360-degree camera, front parking sensors, internet, AI-based online navigation and voice recognition, TPMS. According to an article by News18, “Other attractive features include LED headlights, remote car operation, a 10.4-inch touch screen system, panoramic sunroof etc. Safety features like front and rear disc brakes, ESP, TCS, hill-hold control and vehicle stability management are standard across all variants.”
Fuelled with high demand, the company is aiming to ramp up the production at its Halol plant in Gujarat. The company now aims to produce 3,000 units per month. “The Hector has received an overwhelming response and we are unable to cater to such high initial demand. We are, therefore, closing bookings temporarily as this will help ensure timely and orderly deliveries for our customers who have shown tremendous confidence in MG. We are also working with our component suppliers to ramp up production in a gradual manner without any compromise on quality,” said Rajeev Chaba, President and Managing Director at MG Motor India.
The huge demand for Hector tells us something about the consumer sentiment and market condition in India. Despite the sluggish consumption trend, the customers are not hesitating to buy a product if they love it. This means, the middle class in the country possess the ‘purchasing power’, but is not willing to spend unless they get a good product.
The automobile sector under the Modi government had grown very fast in the first four years, especially in domestic sales due to growth in the economy. The rising disposable income due to the cut down in the prices of basic goods and services has allowed the people to enjoy the vehicle rides. The overall domestic automobiles sales increased at 7.01 per cent combined annual growth rate (CAGR) between FY13-18 with 24.97 million vehicles getting sold in FY18. The overall automobile exports from India grew at 6.86 per cent CAGR between FY13-18.
But in FY 19, the demand registered a substantial decline. The slowdown continued in the first five months of FY 20, the reason behind this being that entry-level demand has saturated in the last four years. Almost every middle-class household which needed a car, already have it, and therefore the demand for mainstream commercial vehicles dampened. Now unique products like the Hector by MG Motor could force the consumer to spend money.