Small car buyers baulk at Blaupunkt, Sony

The branded car audio players in India are yet to make their presence felt in the small cars segment, which is significant as every other car sold in the domestic market is a small car.

The Indian car audio market is estimated at Rs 600 crore (Rs 6 billion), 60 per cent of which is dominated by unorganised players and the grey market.

The remaining Rs 240-crore (Rs 2.4 billion) market is competed by major brand names like Kenwood, Blaupunkt and Sony among others.

Ajay Sahney, deputy general manager (sales, car multimedia), Motor Industries Co, says that the trend in the small car segment, which drives the growth of the passenger car in India, is consumers' demand for lowest prices and therefore additional features are cut down to make it affordable.

Sahney points out that the excise duty on radio is 16 per cent while it scales up by 8 per cent to 24 per cent if it is in-built. This is a compelling reason for the lack of demand for branded car audio market from this segment.

He says that the excise duty was as steep as 40 per cent three years ago. Society of Indian Automobile Manufacturers pegged the domestic sale of passenger cars at 8.19 lakh of which the mini and small car sale accounted for 4.96 lakh as on March 2005. The price of car audio starts from Rs 8,000 to over Rs 1.25 crore.

Bose Corporation has exclusive arrangement with Mercedes Benz, Porsche and Audi for car audio systems. Ratish Pandey, general manager, Bose Corporation, says that the company's presence is only confined to the luxury car segment internationally.

Though Blaupunkt's presence in India spans close to a decade, it is just a year ago that the company started franchised outlets to create awareness about its products among the public.

Eighty per cent turnover of Blaupunkt International, a wholly-owned subsidiary of Bosch Group, comes from its tie-up with automobile companies.

In contrast, its Indian operations generated a turnover of a mere Rs 45 crore (Rs 450 million) in 2004. Of this, Rs 35 crore (Rs 350 million) was from sales to retail customers with the remaining Rs 5 crore (Rs 50 million) coming from its tie-up with automobile makers such as Tata Motors, Hyundai Motors India, Ford India and Mahindra & Mahindra.

Sahney says that to create its brand awareness among public, Blaupunkt plans to establish 30 showrooms across the country in the next two years.  Sahney sees bright days for branded audio systems in the small car segment once the excise duty comes down.