The automotive industry is going through a slowdown, according to the received wisdom. However, the WhatsApp-Twitter-Facebook University is telling me that there is no slowdown. The drop in sales is just because the Indian customer has started buying vehicles like the bestselling GLAs from Mercedes and no longer wants Altos.

Or something like that!

In all the forwards and re-shares, the consistent message I get is that some newly launched products – Hyundai Venue, Kia Seltos, MG Hector, Tata Harrier – have been runaway successes. Most have thousands of bookings and have sold out their entire year’s production in just 27 minutes. Next bookings will open in 2023 and you would have to have a PhD in satellite telemetry to be allowed to book one.

Or something like that!

To add to this are the numerous media reports that every brand delivered record number of units on Dhanteras, many more than they had done any time in the last decade.

While I discount most of the above as carefully crafted media hype and PR managers justifying their roles, there is no smoke without a fire – somewhere. It does tell me that there are customers and probably they are seeking exciting new products and not what is being offered in the market currently.

The Seltos is a compelling argument and Hyundai-Kia has timed it beautifully. The Seltos hits the market even as the Creta starts getting old and sales start to wane. Now, Seltos will take the sales mantle from Creta, handing it back in three years when the Seltos hits mid-life and there is a new Creta on the horizon.

But do a few thousand bookings make a success? While a full order book is impressive, bookings are just that -- bookings. Often customers cancel, as they buy something else in a hurry. Often, word of mouth from the very early customers reaches those at the end of the line fast and they cancel.

And many-a-time the manufacturer has issues at their end and difficulty in delivering on promises, like what happened to the Fiat Uno in 1995. The company had received 290,000 fully-paid bookings in 1995 but labour problems, plant shutdowns, supplier issues and an alleged behind-the-scenes campaign by a politically active rival, killed all but a handful of bookings.

Fiat never recovered.

The same story is being played out with Jawa. The Mahindra-promoted brand received adulation from the media and fan community alike when it launched the arguably good-looking motorcycles a few months back. An acceptable price and not much competition in the segment meant that there was an immediate rush for bookings. However, the common question nowadays in the biker community is: “Where are the bikes?” The company is lagging many months behind in its delivery schedule and customer confidence along with the number of bookings is dwindling, as I write.

Getting the initial bookings is easy – a strong media campaign, PR outreach and heavy junkets are enough to get content writers across media singing paeans to the product. Apart from the top enthusiast media outlets, most lack a technical understanding to do a deep analysis of a product. As a result, what’s peddled as a review is a poor, idolised mash-up of the press release.

The coming weeks see hundreds of complimentary reviews hit the stands/Internet and mini-euphoria is created around the product.

The bookings start with a bang and the fence-sitter/prospective new car buyer is sucked in.

But for an automotive product, the real test comes a few months after the launch. The initial euphoria has died down by then and a new animal is rearing its head.

Word of mouth

This is the most serious review that customers seek before making a big-ticket purchase. It often comes from relatives, friends, office colleagues or neighbours and is further amplified by the dealers. A positive or negative word of mouth can make or break the sales after week eight of the launch period. It may happen sometime later, sometimes a bit earlier, but it always strikes.

So, which of the three new SUVs – Venue, Seltos and Hector – do I think deserve to be called a success?

The Venue is my favourite – it comes from Hyundai’s well-oiled, efficient machinery. It’s hitting the market just as its main-rival, Maruti-Suzuki’s Brezza, is hitting mid-life. The feature list and specs are rich and Hyundai specially harps upon the connectivity features on the small SUV.

The deliveries have been consistent too – the Venue started in May with 7,049 units shipped to dealers. Since then, it has touched a peak of 9,585 units in July and ended September with dispatches of 7,942 units. This is a fairly consistent sales pattern without any massive spikes or dips.

The same cannot be said of the Tata Harrier. The brand’s premium SUV offering sits one segment higher than the Venue and volumes are automatically lower. However, it’s the steady fall in despatches over the last six months that makes a statement on the fragile nature of “success”. Tata dispatched 2,075 Harriers in April and fell, fast and steady, to 635 units by August.

Holding on to sales momentum is a problem for Tata’s new launches and the small SUV Nexon is another example. While it does far better than its Harrier stable-mate, the Venue still leaves it in the shade. The Nexon started the year with dispatches of 5,095 units in January and dropped to 2,245 units by August.

This retaining sales momentum is the biggest characteristic that differentiates successful brands from the lesser ones. In comparison to the Nexon and the Harrier, the much older Vitara Brezza maintains its sales momentum much more efficiently. In January, Maruti’s small SUV had dispatches of 13,172 units, falling to 10,362 units in September. While a 20 per cent-plus decline may sound big, one has to remember that the Brezza was launched three years back.

That’s almost the entire lifetime for an executive sedan like the Honda Civic. Launched in March this year, the Civic dispatches hit a peak of 369 units in April and a bottom of 144 units in August.

Coming back to the recent launches, the MG Hector is the one that I’m least confident about. A new brand and new product, launched by an old team with a chequered past does make me nervous, despite the stellar product attributes on paper. The Hector is too new for me to analyse any numbers and a high number of initial bookings mean that all MG has to do is to manage the production.

In fact, I don't expect a dip in despatches in the first 12 months. Post that, MG would have to deal with the word-of-mouth factor and that will determine how fast the Hector fades over the next five years of its lifecycle.

And then that brings me back to the original question – when should we call a product a success? My rule of thumb is that if it’s from an established and successful brand like Maruti or Hyundai, I would look at the first six-12 months’ dispatches. If it’s from a marginal brand, it’s better to wait 12-24 months and look at how sales have fared to declare it a success or failure