The demand for automatic gearbox cars has been steadily rising in the past few years compared to the manual ones as manufacturers have reduced prices along with offering more variants. From a mere 2-3% a few years ago, automatic gearbox cars now form about 20% of the market. Earlier, the automatic technologies available in the country were at least Rs 1 lakh more expensive than manual. Today, automatic manual transmission (AMT) is just Rs 45,000 costlier. Gaurav Vangaal, associate director, IHS Markit, says factors such as affordability, traffic congestion, and, above all, buyers valuing convenience features such as an automatic gearbox over flashy ones like a music system or alloy wheels are the reasons for this gradual shift. “This shift is now happening even in sub-Rs 10 lakh cars,” he says. “Because of traffic congestion in urban areas, driving convenience has emerged as a major buying factor, and an automatic car is more convenient to drive than a manual.
Also, we have seen that women buyers and senior citizens increasingly prefer automatic cars. Lastly, the penetration levels of automatic cars are so low in India that these have to increase.” What has helped is the number of gearbox options available in the market, giving buyers a choice. For example, Hyundai India offers five automatic options – AMT, 6AT, 8AT, IVT and DCT. But the major reason for this shift is affordability. Prior to 2014, the automatic technologies available in India (DCT, CVT and AT) were at least Rs 1 lakh more expensive than manual. While this worked for expensive cars, automatics could never find mass appeal.
In 2014, Maruti Suzuki launched the Celerio with AMT – the price gap was about Rs 45,000 – nudging the buyer towards trying out this technology. Today, Maruti Suzuki offers seven models with AMT – Alto K10, WagonR, Celerio, Swift, Ignis, S-Presso and Dzire. It also offers CVT (Baleno) and AT (Ciaz, Ertiga, XL6, S-Cross and Vitara Brezza). “In the Celerio, 25% sales are of the automatic, in the WagonR it is 17%, in the Ignis 29%, in the S-Presso 23%, and even in the Alto, which is a very price-conscious segment, sales of the AGS variant are about 15%,” says Shashank Srivastava, executive director, marketing & sales, Maruti Suzuki India.
The company has sold over five lakh automatic cars since 2014 at a CAGR of 58%; last year, it sold 1,32,000 automatic cars. “Affordability along with driving conditions (longer time spent in traffic), need for stress-free driving and increasing awareness amongst buyers are the factors responsible for the rising popularity of automatic cars,” Srivastava adds. Hyundai has taken the ‘choice’ route to popularise this technology. Tarun Garg, director, sales & marketing, Hyundai Motor India, says the company was quick to spot this opportunity early on, and today it offers five automatic options, in addition to a technology that falls somewhere between the automatic and the manual, ie the iMT (intelligent manual transmission). “We don’t want to limit the choice for the buyer, but have instead brought in all the technologies available globally,” Garg says. “While our automatic penetration is 25-30%, there are some customers who want to buy a manual but without the hassles involved, like the clutch, so we are also offering the iMT.”
For Hyundai, the sales share of automatic variants in CY19 was as follows: Santro 22%, Creta 17%, Verna 20%, and Nios 28%. While automatic percentage is rising in sub-Rs 10 lakh cars, it is already above 30% in cars costing more than Rs 10 lakh. For example, over 30% new Creta bookings have been of the automatic variant and 40% for the new Verna, and it is a high 54% for the Toyota Yaris. As prices rise, the automatic percentage also rises. Toyota’s premium models – the Innova Crysta and the Fortuner – have an automatic sales share of 29% and 61%, respectively. Naveen Soni, senior vice-president, sales & service, Toyota Kirloskar Motor, says the manual-to-automatic trend, in particular, is applicable to self-driven vehicles. “We see demand trend going up in the near future due to the convenience an automatic vehicle offers the driver.”