Bookings for the new Honda SUV, Elevate, have crossed 650 units at dealerships run by Landmark Cars, one of Honda’s largest dealer partners in India. The company is expecting to be sold out for 3-4 months by the planned launch of Elevate in early September.
“The new Elevate is showing all signs of being a blockbuster,” said Executive Chairman Sanjay Thakker of Landmark Cars Ltd, one of India’s largest car dealers, on the company’s first-quarter earnings call recently. Landmark operates Honda dealerships across Mumbai, Pune and other major cities in Maharashtra.
“The cars have started reaching the dealerships and the deliveries will start in the first week of September…The dispatches have already begun, the wholesales have already started, the cars are coming to the showrooms but the deliveries will start from September,” he added.
He said Honda had seen a substantial decline in sales in the first quarter of this year (Apr-Jun) when the industry was growing. “So, we are hoping that the Honda volumes will more than double from the current levels from September onward,” he noted.
The new Elevate will be Honda’s first entry into the mid-size SUV segment, where it will compete with the likes of Hyundai Creta, Kia Seltos, MG Astor and Volkswagen Taigun. Industry experts have pegged the starting price of Elevate at around Rs 10 lakhs.
For Landmark Cars, Honda volumes had dropped significantly due to discontinuation of Honda Jazz, WRV and other diesel models.
The Indian SUV market has seen tremendous growth in recent years, overtaking sedans and hatchbacks.
Strong pre-launch bookings indicate that Honda might have a winner on its hands with the Elevate. The SUV will be launched around the upcoming festive season, which generally sees a spike in automotive sales.
Mercedes Benz to Pick Up
Thakkar also said that he expects sales of Mercedes Benz cars to accelerate after a slower start this year.
Thakker said that while Mercedes Benz grew by 8% in Q1, the company has guided for strong double-digit growth for the full fiscal year.
Mercedes Benz sales in India have been impacted over the last 2 years due to supply chain disruptions stemming from the pandemic and lockdowns in China. However, the situation has improved now with production and shipments getting back on track.
Among the highlights of the line-up is new Mercedes GLC SUV. Landmark Cars revealed that bookings for the new GLC have crossed 1,500 units across India, translating to over Rs. 1100 crores of ex-showroom sales value. As per industry estimates, the company has around 16% market share of Mercedes Benz sales in India, so over 1,500 bookings reflects the strong demand.
Thakker added that the waiting period continues for high-end Mercedes models like the S-Class, GLS and Maybach. The supplies of these models are expected to improve in the coming quarters, which bodes well for overall sales and profitability. Mercedes’ share in India’s 30,000 units per year luxury car market stands at around 40%.
The company had seen its revenues impacted last quarter due to lower Mercedes volumes. But the demand momentum makes dealers like Landmark optimistic of Mercedes outpacing the industry growth rate going forward.
MG Motor Ops Start
Thakker also said that his company has commenced dealership operations for MG Motor in Madhya Pradesh, within just 50 days of receiving the letter of intent. The company is already exploring further expansion with MG Motor across India, he said.
Landmark Cars announced the MG Motor dealership at launch events in Indore and Bhopal last month. The company has taken over facilities earlier operated by Hriday Cars in these cities.
MG Motor, owned by China’s SAIC, has been expanding its presence in India after initial success with SUVs like Hector and Astor. The company is now gearing up for further investments in India in collaboration with local partners.
Landmark Cars is hoping to benefit from MG’s growth plans by adding more dealerships in other regions. Sanjay Thakker, Executive Chairman of Landmark Cars, revealed during an earnings call that the company is actively engaged with MG Motor for evaluating new locations.
Thakker indicated that the expansion plans will speed up once MG Motor’s partnership with a local conglomerate like Jindal Group fructifies as anticipated. MG is reportedly in discussions with Jindal Steel and Power (JSPL) for an electric vehicle manufacturing joint venture.
MG Motor registered 40% growth in July 2022, making it the fastest growing car brand in India. Industry experts predict that MG’s volumes could more than double with new model launches and expanding distribution network.
Renault Pause
Landmark Cars Limited has strategically reduced its dealership count for the struggling Renault brand, while securing significant financial support from Renault India to sustain operations, the management indicated in the call.
Landmark is waiting for new models arrive in the Indian market.
Renault India has faced declining sales volumes and market share in recent years, falling behind rivals like Kia and Skoda in the mid-size sedan space. This has forced dealers like Landmark Cars to cut losses by reducing outlet count.
Renault is supporting dealers with incentive packages and waivers to ease the revenue decline until turnaround plans materialize. Renault had announced a new strategy for India last year, with plans to launch multiple new models starting 2025. This includes electric vehicles being developed by partner Nissan for the joint venture.
Industry observers note that reducing operating costs and retail footprint will be key for Renault dealers over the next two years before the promised product blitz. Landmark Cars runs Renault outlets in Delhi, Mumbai, Gujarat and Rajasthan.
Volkswagen
Thakker also pointed out that his company has opened 6 new low-cost sales outlets for Volkswagen in various parts of Gujarat. The new stores have been opened in Anand, Bardoli and other towns by investing low capital and operating costs.
This is part of Volkswagen’s strategy to improve its sales and market share in India by tapping potential demand in smaller cities and rural areas. The company also runs Volkswagen outlets in major metros like Mumbai, Pune and Delhi.