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GM India gets good numbers with Chevy Aveo

From Automonitor| January 30,2007

General Motors India, which has made the Chevrolet its key brand in India was hoping to garner higher marketshare in the mid size segment in India with the launch the Aveo in March this year.

But little did it realise that the Aveo would actually do much better than its offering in the mid-size sedan segment, Optra.

Though its Chevrolet Tavera has comfortably enhanced its grip on the MPV market earlier dominated by the Qualis, sales of its flagship model Optra has been dipping month on month.

Dealers attribute this to 'cannabalisation' of Optra sales by GM India's Aveo with customers preferring to opt for the latter due to its upmarket trim and interiors with similar engine without a premium price tag as opposed to Optra. GM India offers Chevrolet Aveo in 1.4 and 1.6 litre engine capacity with later being offered in Optra as well, leading to downward shift in demand.

"Aveo appears to be a better deal for a mid-size car buyer as it offers a value proposition with upmarket trim and interiors leading potential buyers away from the Optra. The buyers are just opting for the Aveo at a lower price point compared to the Optra," says a rival dealer.

Optra downtrend

The Aveo sales have been relatively steady at around 800 odd units a month since its launch early this year. Sales figures available from Society of Indian Automobile Manufacturers (SIAM) reveal a not –so-healthy sales figure for the Optra.

GM India sold just 240 units of Chevrolet Optra in October 2006 which is considered a busy festive season as compared to 652 Optra in the same month in 2005. Cumulative sales of Chevrolet Optra for April to October 2006 stood at 2,382 units of Chevrolet Optra down by around 35 percent from 3,643 units in the same period last year.

The trend of falling sales growth of the Optra has been visible since March this year after the launch of the Aveo when the company sold 520 units nearly 50 percent less than 1,101 units sold in March last year. Sales in April this year stood at 318 units as against 406 units in the same month last year. The declining trend has just been gathering pace ever since early this year.

A Mumbai based GM dealer when spoken to revealed that though increasing number of customers are upgrading their cars, it has not translated into better sales for Optra but Aveo sales have been holding steady since it was launched.

There is around two weeks waiting period for Optra CNG version and discounts ranging upto Rs 20,000 are being given on 1.6 Optra with expectation of a price increase by early next year, according to a Delhi based GM dealer. GM dealers in Delhi have been selling on average around 35 to 40 Optras a month.

GM India sold 3,506 units in September 2006 as against 3220 cars in the same month last year to recording a growth of nine percent, according to a company release. The September sales comprise 2,222 units of Chevrolet Tavera, 421 units of Chevrolet Optra and 863 units of Chevrolet Aveo. Chevrolet Tavera achieved its highest ever sales marking a 39 percent year on year growth over the same month last year when the company sold 1,600 units, according to the release.

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