Tata Aria, India's first four-wheel drive crossover, has witnessed dwindling sales as its high price is keeping buyers at bay. The top model Aria is priced at above Rs 16 lakh and buyers find this to be too expensive a car for the brand value it offers.
Tata Motors entered the luxury car segment with the Tata Aria, blend of a sedan and a sports utility vehicle ( SUV), in October 2010.
Jaguar Land Rover has added lot of respectability to Tata's reputation and Aria is a step in this direction for the Indian market. Considering the growing purchasing power of Indian buyers, the car was expected to do well.
However, according to market information its monthly sales have come down to around 100, despite the car offering superior luxury and technology. Between January and April this year, around 800 Arias might have hit the Indian roads, including over 300 in January, 2011. In March, the sales volume came down to below 100, according to market information.
"It is a good car. But people are not willing to pay so much for a Tata. Had it been a Toyota or Honda the matter could have been different," said an auto analyst asking not to be named.
"There is a mismatch in the pricing and brand, as Tata is yet to establish itself as a luxury car maker. If they cut the price to Rs 10 lakh, sales would pick up," the analyst added.
Tata Motors did not reveal the number of Arias sold per month and denied that the product has failed in the market.
"It (Tata Aria) is doing exactly the way it was expected to do. Sales are steadily growing. It will grow over a period of year," said a Tata Motors spokesperson, while strongly defending the company's prized offering.
According to some analysts, the positioning has gone wrong, reflecting the poor sales, but Tata Motors feel otherwise and has no plans to reposition the car.
"It is too early to say that the vehicle is not doing well. Any new automobile needs time to reach the desired volume. We should give some time before reaching any conclusion," said Abdul Majeed, auto practice leader at PricewaterhouseCoopers.
Though Tata Aria is in a class of its own, some analysts compare it with Toyota Innova, which is selling around 5,000 units a month and M& M's Scorpio and Xylo which are selling 3,600 and 2,700 units a month, respectively.
The top-of- the-line
Innova is priced at Rs 12.6 lakh, while the costliest Scorpio and Xylo are priced at Rs 12.5 lakh and Rs 9.4 lakh, respectively.
Courtesy: Mail Today
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