The Hindu : Kerala News : Snazzy cars rule the road

Online edition of India's National Newspaper
Monday, Feb 21, 2005

Kerala

Kerala

Snazzy cars rule the road

By T. Nandakumar

Kerala figures up there in the list of prime destinations of new players in the auto market. Every new model in the market has a marked presence in the State.

A car stockyard in Kochi. Photo: K.K. Mustafah

THIRUVANANTHAPURAM: From the sleek beauties and the mean machines that grace the stratospheric realms of the automobile world to the cute models aimed at the upwardly mobile and the no-frills contraptions designed for the mass market, Kerala's already overstretched road network is awash with a dazzling array of new-generation cars.

The Kerala consumer has never had it so good, what with new models with drop-dead looks, state-of-the-art technology and never-before features hitting the ramp every alternate month and marketing departments of car makers from near and far raising their sales pitch to irresistible levels.

As the burgeoning upper-middle class with disposable incomes increasingly turn to cars to announce their arrival, Kerala now figures up there in the list of prime destinations of new players in the auto market.

Today, almost every new model in the market has a marked presence in the State. The urban landscape in the State has been transformed by swanky automobile showrooms jostling for prime space, and the phenomenon has spilled over from major cities to small towns.

International brands, such as the Mercedes-Benz, Ford, Chevrolet, Skoda, Toyota, Honda and Suzuki, are churning up the automobile market in Kerala along with their Indian counterparts, such as the Tatas and Mahindras, as the dated models from the Ambassador and Premier stables are left to bite the dust.

Sedans score

According to dealers and automobile financiers, the market demand for cars in Kerala is slowly tilting away from small cars, such as the Maruti Zen, Hyundai Santro and Tata Indica, to mid-size sedans, such as the Ford Icon, Tata Indigo, Hyundai Accent and Honda City, signifying a major change in spending pattern. The executive or D-segment, comprising high-end models, such as the Toyota Corolla, Skoda Octavia and the Mercedes-Benz C-class, has also registered an impressive growth. Market observers point out that ownership of multiple cars in a family is fast catching up as a trend in Kerala. "For someone who owns a big luxury sedan costing Rs. 15 lakhs, it makes sense to buy a used compact car for the occasional run to the local supermarket or the gym. A third car, also a used one, will cater to the needs of the wife and kids," says an official at an automobile dealer.

Better fuel economy, emission control, driving comfort, attractive financing schemes and servicing standards have played a major role in fuelling the desire for new models.

Inducements for the prospective buyers also include enhanced acceleration, creature comforts, speed, control and a wide range of colours to choose from.

Old timers recall how limited a choice the car buyer had in terms of brand, colour or technical specifications up to the Seventies.

"You had black cars and white cars. Ambassador or Fiat. Both petrol-driven. If you wanted anything other than these, the only option was to import a foreign model at a hefty price," recollects Raman, a mechanic for Ambassador cars who has run out of business. While a few private garages have equipped themselves with mechanised equipment and trained personnel, those such as Raman's that could not afford the investment and found the technological barriers too high have simply folded up.

Car dealers say that there is a heightened awareness about the relative merits of advanced features, such as front-wheel drive, lightweight alloy engines, power steering, disc brakes and power windows.

Torque, power and speed are the new mantras; the more the better. And size does matter, as the growing popularity of SUVs (sports utility vehicle) in the State indicates. And to top it all, automobile jargon, such as multi-point electronic fuel injection (MPFI), turbo charging, electronic traction control, anti-lock braking systems and catalytic converters, have ceased to be the forte of motoring enthusiasts.

From a mere mode of transport, the automobile has evolved into an emphatic statement of wealth, which explains the sophistication and technological wizardry that go into a new-generation model.

Adding to the appeal

To add to the appeal, car manufacturers are tapping into B School lessons in packaging a product. The result: revised versions, high-end variants, anniversary specials and limited editions at the manufacturing end and test drives, hefty discounts and attractive financing options at the dealer end.

Automobile dealers are pulling out all stops in their bid to woo customers and boost sales. Professional marketing takes over right from the moment the customer steps in to a showroom to make an enquiry. Gone are the days when he was handed out a dog-eared brochure for a quick run-through before the man at the shabby desk insisted on having it back. A prospective buyer now steps into a glitzy showroom, complete with designer furniture, interior decoration, lighted displays and trained customer relations personnel who usher him to a chair and size up his demands before offering advice on the model to choose. "Showroom ambience helps draw a customer, but it plays a secondary role to customer care," says Sajan, sales manager, Popular Automobiles, dealer for Maruti vehicles. "It takes the coordinated effort of an entire team to ensure that an enquiry is converted into a sale," he says.

The qualitative improvement in service extends to automated workshops where gleaming, computerised gadgets and uniformed men have replaced greasy equipment and sweating, bare-bodied mechanics. Today, a guided tour of the company workshop is one of the favoured techniques employed by automobile dealers to impress a prospective client.

Faced with a range of bewildering options, buyers are increasingly relying on automobile journals and tapping into cyberspace for expert advice on selecting their dream machine.

Almost all the major automobile journals and their websites have dedicated their pages to helping out the confused buyer. Apart from road tests, car care and maintenance tips and comparative advantages of models, the pages also feature the best deals for buying or selling used cars and financing schemes that suit different customers. The boom in the sales of upmarket cars has also led to a spurt in the demand for automobile accessories.

Shops selling high-tech electronic security gadgets, hi-fi music systems, flashy brake lamps and extra spoilers have sprung up all over the State. Dealers say there are customers who buy a new car for Rs. 10 lakhs and spend about Rs. 4 lakhs on extra fittings.

Banks and financing institutions are luring customers with attractive loan schemes.

Most of the financiers have tied up with car dealers to offer flexible loans targeted at different sections.

While nationalised banks have fixed interest rates, private banks and finance institutions offer more flexible schemes to suit different income groups.

Attractions include 24-hour processing, 100 per cent financing and extended repayment tenure up to 10 years.

Some of the dealers also offer free insurance and road tax as additional inducement.

Privileged customers and professionals, such as doctors and chartered accountants, enjoy low rates of interest.

"Professionals constitute the easy-to-fund segment because the risk of default is virtually nil," says Sreekanth, team leader, ICICI Car Loans. "While A-segment cars such as the Maruti 800 generate the largest volume of units, it is the B-segment, comprising the Maruti Alto, Hyundai Santro and Fiat Palio, which has the highest contribution in terms of quantum of finance," he says.

Social scientists and psychologists feel that the booming automobile market has added another dimension to the consumer culture in Kerala.

Loans for the asking

Says the environmental activist R.V. G. Menon: "It is the easy availability of car loans that has fired this recent trend. While it is still a Herculean task to secure an industrial loan, automobile loans are thrust upon even unwilling customers, and that too at far more favourable rates of interest. Thus, we find the advertisement of a posh club, specifying that the aspiring members should possess `at least' a Maruti Esteem!"

The behavioural psychologist Krishna Prasad Sreedhar sees the automobile boom as the new face of the consumerist psychology sweeping the State. "Lured by a marketing blitz and easy loans, people are forced to splurge on cars, often beyond their means. The trend has come to stay, but it may prove costly in the long run. The mad rush to acquire an expensive car as a status symbol has the potential to push up the suicide rate in Kerala," he says.

The booming market for new models has spurred the demand for used cars as well. Auto consultants have mushroomed all over the State and classified columns in local dailies are crammed with used-car advertisements. With new cars that cost between Rs. 2.5 lakhs and Rs. 10 lakhs, the middle class have found it easier to go in for used cars.

Car brokers admit that the prices of used cars are steadily falling. Used Maruti cars that cost Rs. 1.15 lakhs a year ago are available for Rs. 75,000 today. Bank loans for purchase of used cars have made things easier.

Same old roads

The virtual invasion of new models of cars has not been matched by road expansion or better management of vehicular traffic. "By acquiring a technologically advanced car capable of achieving a top speed of over 200 kmph, a customer is condemning his vehicle to life-long underutilisation. With the chaotic road conditions worsening by the day, you can rarely engage the top gear or get a real feel of the car's power," says B.K. Kumar, a bank employee who owns a Maruti- 800.

Says Mr. R.V.G. Menon: "The Americans have an average of one car for 1.3 persons. The Chinese have one car for 125. Kerala has one car for 100 persons. If the two-wheeler figure is also taken into account, the ratio becomes one vehicle for every 18 persons. Yes, we are catching up. Our model for transportation development seems to be the same as that of the U.S.: if you want a reliable and comfortable means to get around, you better have your own vehicle. It is obvious that this is not a sustainable model, either for transportation or for development."

Consumption product

But with the car emerging as more of a conspicuous consumption product than a mode of transport, affordability and road conditions may be the last thing in the minds of the status-conscious urban customer. With several new models expected to flood the market in the near future, management of traffic on Kerala's roads could well turn out to be nightmarish. And the way it would hit public transport is another story.

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