Market Magic

FROM OMNI TO INNOVA: A LONG JOURNEY

Have you ever wondered why fleet and family cars are not in same lane despite the two segments operating on same basics of cost and efficiency factors?

BARUN JHA

Once upon a time, there was Maruti Omni. The van was reigning almost unchallenged in the family car segment. To be precise, it was lack of challenge that helped the erstwhile Maruti van rule over the roost. But nothing is permanent in this fragile world and so came a battery of new wannabe rulers gunning for the top slot.
Tatas tried quite successfully to dislodge the Indo-Japanese leader with their Sumo. The new incumbent was a perfect match for its name when it came to power and looks. However, the power went awry when it was time to defend the throne. After all, a fort once invaded becomes prone to new attacks and new kings.

Since then we have seen Qualis, Tavera, Scorpio and Innova among others vying for the top slot. Among all the new entrants, Qualis has been the most successful one and has enjoyed one of the longest periods at the top. In fact, one can see this vehicle still in service despite having been aborted by its parents. Incidentally, Qualis takes its name from Quality and Service.

After the small personal cars, utility vehicle segment is one of the most cherished-for markets in India for the car manufacturers. The reasons can be varied – large families, ever-growing BPO sector etc.

Indians have been always known for large enough families that can’t be always contained within a Maruti 800 or its new brothers Alto, Santro, Swift etc. Even if it is small family with one or two children or a DINK one (Double Income No Kids), one quite often wishes company of friends or relatives when it comes to outings – be it movies, picnics or small holidays. The economic reforms have also boosted the appetite of a whole class of consumers who no more want to rely on car rental services for their group of family outings, even if it comes out to be just once or twice a year.

The evolution of BPO sector has further fueled the demand for utility vehicles that can easily accommodate 6-8 persons. After all, the basic founding principle of the sector is based on cost reduction. It is always better to go for eight persons in a single vehicle rather than carry three each in three different ones. The power factor also comes to fore when we compare a delicate small box, ala Maruti 800, and a ruff-n-tuff Qualis or Scorpio.

The power and economy factors apply to both the family and office market segments alike. These two issues have been instrumental in the evolution of the segment from Maruti Omni to Innova. Omni was certainly most economical car on the block in this segment. We can still lots of Omnis running in small cities and even in some of the metros. However, they have remained confined to the work of ferrying children to small colony schools or can be seen running as taxis. The car failed to withstand the pressure of doing four to five rounds a day and a night when it came to the call centres. The families also started ditching the van when they were presented with new and better options.

POWER PLAY TO THE TOP

Sumo came at a right time when the demand was robust for a powerful and economical utility vehicle. It was a runaway hit when launched in 1994 and was considered as the best MUV around the time. However, it lagged behind when it came to defending its position by evolving as per the demand cycle. The big car had become synonymic with the call centres in the teen-days of the sector. People used to instantly know that if it is a Sumo there must be some call-centre executives inside. However, the car was loved both as the fleet vehicles and as the family cars in its heydays. However, Sumo was soon sidelined in the personal car segment with the advent of Qualis and Tavera. Tata tried to recapture the market with its Sumo Victa version, which was presented as a true lifestyle vehicle. However, the consumers could not differentiate the new model from the old brethren.

There were common factors that worked both in favour of and against Sumo. The car was loved for being a simple and rugged workhorse in the fleet vehicle market segment. However, the very commercial-vehicle feel that it presented worked against the powerhouse when it came to family cars. Tata tried to reinvent the interiors in its Sumo Victa model with a non-commercial look and a luxury car-like feel. But, the repackaging was rather late and fell pale in comparison to new entrants on the block.
The one factor that always worked for Sumo was its economical aspect. The car presented an attractive value by offering lifestyle SUV features at the price of an MUV. This worked really when in the commercial markets, but it demands much more than price value in the family car segment.

HERE COMES THE KING

Times were changing fast and so were the tastes and requirements of the car users. Toyota read the opportunities right and came up with its ideal offering of quality and service, Qualis. The car reached the new peaks never scaled before. It was not call centres-and-Sumo any more. Qualis became the mouthpiece of the BPO sector. The car provided both comfort and power required in this segment. It was a natural hit has a fleet vehicle. However, when it came to the family car segment, the bouquets were not many, especially in the metro centres. In small centres where there were no BPO firms, the car somehow managed to hit the eyeball with the families.
Toyota presented Qualis as a multi-purpose vehicle (MPV), rather than calling it MUV or SUV. The vehicle has been a leader in the fleet segment ever since its introduction in 2000, even after having been phased out by the company. Qualis grabbed nearly 35% market share in the MPV segment in its first year itself and expanded its share to more than 40% in the second year. However, the entry of new competitors partly dented Qualis’ market share in 2003. Again the culprit was the ever-evolving family car segment. Qualis always delivered on quality, service and performance fronts, which are the most sought-after factors for fleet vehicles. However, these were again not enough to fill the appetite of families.

ALONG CAME TAVERA

The quest for better comfort levels has been one of the biggest drivers in the evolution of the car market. In addition, to families, there trends started to surface in the BPO sector as well, where firms were trying their best to provide best of benefits to their employees. This time around, General Motors (GM) read the lines correct and then came calling Chevrolet Tavera.

While launching Tavera, GM focused on reliability, fuel economy and value-for-money as key drivers for the fast-growing MUV segment in India. When it came to a stylish look, the car left Qualis miles behind. GM made Tavera longer than Qualis and other utility vehicles on the block. The concept hit the right chord with Indians, who have traditionally been fascinated with the length of a car ever since the British era.

Kewal Krishna Pahwa, who owns a chain of cyber cafes in Delhi, says, “I bought a Tavera late last year. The car is much better both in looks and handling that the Toyota Qualis.” Pahwa adds that his Tavera offers excellent fuel efficiency with a mileage of around 13-14 kmpl.

The long Tavera, along with its eight, nine and ten-seater models also worked well with fleet operators. However, the car somehow failed to generate much interest at lower end of the market segment due to its high-end pricing and maintenance costs.
Mann Singh of Delhi-based Kuldeep Tours and Travels, who operates vehicle fleets for a number of MNCs and BPO firms, says, “Tavera became an excellent proposition for out bigger clients who were willing to spend some extra money for better comforts.” Singh adds that some of their BPO clients projected their Tavera fleet as a differentiating metric in providing better comforts to their employees.

A NEW INNOVATION

Tavera was loved for its luxury car-like looks and features, but Qualis was still ruling over the roost. However, Toyota took serious note of declining market share of Qualis, though still small. The company announced a surprising departure of Qualis when it was still at peak. Toyota bounced back with a bang with Innova.
The verdict is still divided when it comes to Innova or Tavera. To add to the competition, there are others like Scorpio too vying for their piece of cake. However, ask an Innova owner and he would swear that the car is miles ahead when compared to Qualis or Tavera.

Both Qualis and Innova came from Toyota’s global IMV (Innovative Multi-Purpose Vehicle) project. While Qualis was third-generation IMV from the Toyota stable, Innova was projected as a fifth-generation IMV.

Samir Padukone, a technical-support associate with a leading BPO firm and a self-acclaimed car lover, says, “Just a plain look and Innova is ages ahead of Qualis.” Padukone says that Qualis was an ugly duckling that knew its work well. “But Innova and Tavera both score much better than Qualis both in work and looks,” he adds.
The huge success of Qualis can be mainly attributed to its fleet vehicle avatar, while Innova is more of a lifestyle vehicle. Not surprisingly, one of the most-loved features of Innova is its better air-conditioning capabilities when compared to Qualis. Toyota has tried its best to make Innova much more stylish that Qualis and Tavera. On size metrics, Innova is 4,555mm x 1,770mm x 1,755mm, while the Tavera is 4,435mm x 1,680mm x 1,765mm.

The car has been so far quite successful in attracting eyeballs in both the family and fleet segments. The one thing that is not working in favour of Innova is its higher price tag when compared to Tavera and Scorpio. However, Toyota is trying its best to retain the glory of Qualis in the fleet segment, while attracting new markets from the lifestyle segment. The company has even roped in Aamir Khan as a brand ambassador for its new Innova.

SCORPIO: A SILENT SUCCESS

Scorpio has been there since long and that also quite successfully. However, one feels to forget its existence whenever a debate erupts related to the SUV market. However, Scorpio is the only SUV that realty looks like a sports vehicle. While Qualis was more of a fleet vehicle, Innova and Tavera are predominantly lifestyle vehicles.

Navin Aggrawal, a Delhi-based advocate and a holiday-freak who has owned a Scorpio since 2001, says, “I quite often go on weekend holidays to nearby places and Scorpio has been my companion ever since I bought it.” Aggrawal says that Scorpio is the only true SUV available in its price-range and its market segment.

Aggrawal adds, “Qualis is certainly a better option if you are a fleet operator, but Scorpio is the personal utility vehicle that you would prefer to be seen inside.”
“The difference between a Scorpio and other utility vehicles is the fact that in one you are in driving seat and in others you are on driver’s seat,” says Ankur Mohanti, a senior executive with a BPO firm who is planning to buy a Scorpio. Besides looks and performance, Scorpio beats Qualis and other rivals by a wide margin also on the pricing front, Mohanti adds.

FLEET & FAMILIES - POLES APART

Fleet vehicle operators have been one of the biggest beneficiaries of the BPO boom in the country. Given the 24-hour work shifts being observed in the BPO firms, the pickup and drop facilities are necessities rather than extra benefits. This sector has been a major force behind driving the utility vehicle market to current highs. Both the fleet vehicle and family car segments are driven by broadly similar factors of economy and value-for-money. However, the two segments have not gone hands-in-hands when it comes to choice of vehicles.

Maruti Omni was love of families, but Sumo was more of a commercial vehicle. Qualis became an instant hit as a fleet vehicle and was lapped up instantly by fleet operators. However, families remained mostly away from Qualis and Sumo, notwithstanding repeated attempts by Toyota and Tata to attract the attention of families with new and better models. The fact that both Sumo and Qualis provided good resale values also helped the families to switch over to other models like Tavera. The used cars, especially Qualis, were lapped up by smaller fleet operators.
Gulshan Rai Makkar, a retired police officer and owner of a travel agency, says, “We started the agency with a fleet of used vehicles. Qualis and Sumo are the best options in the used MUV segment.” Makkar adds, besides the cost factor, Tavera and other newer models are not always preferred by the fleet operators, due to extra maintenance efforts required for these vehicles.

The travel agency operator clarifies, “Drivers keep on changing for out vehicles and moreover we can not expect these drivers to take care of the cars as their own, unlike the family cars. Therefore, maintenance is a major reason why we would still prefer a Qualis, despite the new and better facilities present in the newer models.”
The fences had been clearly drawn in the utility vehicle segment until the advent of Tavera and Innova. Omni was always a family car, Sumo was a commercial vehicle and Qualis was a true fleet vehicle. Scorpio has always remained focused on the family car segment. However, Toyota and GM are trying their best to hit two birds simultaneously with their new offerings. The problem is Qualis is still refusing to leave the front in fleet segment and there are new competitors always being churned out of the factories for the already-crowded family car market.

posted by Arhaan @ 4:08 AM