Business Today

Gear up for change

Kushan Mitra | Print Edition: March 18, 2012

The new iteration of Maruti Suzuki's best-selling entry level sedan, the Swift Dzire, has a four-speed automatic transmission (AT) variant. You no longer have to keep changing gears to match the car's speed while driving. The vehicle does so on its own - with just one (or two) forward options on the gear stick as well as a reverse and neutral option. It is the first Maruti Suzuki offering with automatic transmission since the AX variant of the Wagon R, launched years ago.

That variant did not find too many takers, but the situation is different now. "There is increasing demand for automatic vehicles in India," says Mayank Pareek, Managing Executive Officer for Marketing and Sales at Maruti Suzuki. However, since all the ATs fitted in Indian cars are imported, the AT variants are always more expensive than those with manual transmission. In the case of Swift Dzire, the VXi AT costs Rs 6.55 lakh (exshowroom in Delhi), which is Rs 1.22 lakh more than the manual model.

Small cars with automatic transmission are still a niche segment. Pareek estimates they will account for only five per cent of Swift Dzire's sales, but this is still better than before when they were virtually ignored. "The price difference is quite large, but it is a small one to pay for those who want the convenience of automatic cars," he adds. Running costs are almost the same: the AT variant consumes only marginally more fuel.

Automatics outnumber manual variants overseas and Pareek feels that with increasing numbers of Indians having travelled abroad and driven them, such cars are bound to get more popular in India. "Automatics are 90 per cent of the car fleet in the United States," he says. "I think people who return from there will drive sales," He also expects automatics to get cheaper as sales increase.

Hyundai has been selling AT variants of its i10 and i20 cars for years now. At Rs 5.11 lakh, its i10 Sportz AT is the cheapest automatic car in India. (Its manual variant costs around Rs 4.5 lakh.) But Arvind Saxena, Director, Sales and Marketing, Hyundai India, is sceptical.

"Yes, people who go abroad get used to driving automatics," he says, "But are they so used to them that they will pay 20 to 25 per cent more?" At present, in Hyundai's small car segment, automatics account for only four per cent of sales. It is a different story with bigger and more costly cars. Since the cost of an automatic is much the same for all cars, the more expensive the model, the narrower the cost difference between the AT and the regular variant. The automatics variant of Hyundai's mid-level sedan, Verna, for instance, accounts for six per cent of the model's sales.

With luxury cars, the situation is the reverse: it is manual transmission models that are the rarity. Audi, BMW and Mercedes-Benz only provide manual transmission options in their high-end models. "Many customers for these cars also buy smaller cars. Once they have driven an automatic in India, they find it difficult to drive a vehicle with manual transmission again," says Pareek.

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